TGIF, Agents of Impact!
What the G7 is for. In the way-before times, global leaders agreed on a positive agenda for peace and prosperity. As recently as 2015, they adopted, virtually unanimously, not only the Paris climate agreement and the 2030 Sustainable Development Goals, but the Addis Ababa Action Agenda to finance plans to end poverty, ensure universal access to education, energy and healthcare, and transition to a low-carbon economy. At this year’s more muted G7 meeting in Cornwall, U.K., success will be measured by the leaders’ ability to cobble together a plan to belatedly secure still-too-few COVID vaccines for low- and middle-income countries, and to make another run at securing the less-than-adequate $100 billion per year they have promised to developing countries for climate mitigation and adaptation. Failure on the first means a long siege of virus variants. Failure on the second could derail November’s COP26 climate summit in Glasgow and any chance of averting the full climate catastrophe. “I don’t see how you can engage in a global negotiation around climate change if the North will not share its vaccines,” the Fletcher School’s Rachel Kyte, a former climate negotiator, said this week. The shortcomings of the Gates Foundation’s global-access agreements for securing vaccine doses revealed the shortcomings of purely private solutions (see No. 2, below). Like COVID and climate, reimagining capitalism (see No. 1), requires global leadership and government action. – David Bank
🎧 Impact Briefing. Roundtable regulars Imogen Rose-Smith and David Bank are back on this week’s podcast with host Brian Walsh to reimagine capitalism, detail the pension fund strategies at stake in the New York City election, and dissect the Gates Foundation’s agreements for global access to vaccines and drugs. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you listen.
The Week’s Agents of Impact
Antony Bugg-Levine and Jed Emerson. Early leaders face a choice as movements grow: adapt their game or fade away. In the decade since Antony Bugg-Levine and Jed Emerson co-authored the 2011 book, Impact Investing, the investment approach has seen tremendous growth in assets under management, the maturation of impact measurement and management, the birth of new firms, and the conversion of legacy institutions. In the book, they cite Robert Kennedy: “Even tiny ripples, when they are multiplied and brought together, can become a powerful current that sweeps aside the established order.” That was the backdrop to the job changes that the two early movers announced, separately, this week.
South Africa-born Bugg-Levine worked for the country’s human rights commission and the African National Congress. He helped lead TechnoServe in Nairobi and then the impact investing program at Rockefeller Foundation, where he helped found the Global Impact Investing Network and other field infrastructure. As CEO of Nonprofit Finance Fund for the past decade, Bugg-Levine quintupled lending and secured an additional $43 million of unrestricted assets. He shared that he’s stepping down to make way for a (yet unnamed) “visionary, community-centered leader with lived expertise of the issues we work on.” Bugg-Levine hasn’t committed to his next gig, but says he will continue “to build better funding systems that advance justice and equity.”
Early in his career, Emerson played central roles at Larkin Street Services, Roberts Enterprise Development Fund, Pacific Community Ventures and Generation Investment Management. As his Twitter handle reminds, he developed “blended value” and other early impact investing concepts. More recently, he has advised funds and family offices including Annie Chen’s RS Group Asia. This week, he announced his full-time move to Tiedemann Advisors, which manages more than $25 billion in client assets, but only $3.5 billion with an impact focus. “This is a chance for me, having spent a lot of time on the outside as an advisor and provocateur, to come inside and put some of my rhetoric to practice,” Emerson told ImpactAlpha. As impact investing grows up to meet the moment, Emerson and Bugg-Levine will be among the many who help write its next chapter. “I’ve been preaching to the choir,” Emerson says. “It’s time to preach to the pew.” – Dennis Price
The Week’s Big 6
1. Capitalism reimagined (podcast). Rethinking capitalism is suddenly at the top of the public, and many private, agendas. Omidyar Network has refocused its mission to address the roots of structural challenges such as income inequality, climate change and systemic racism. “What we need to do is design markets to serve the well-being of society, and to stop designing our society around serving the well-being of markets,” Chris Jurgens says in a podcast conversation kicking off Omidyar Network’s partnership with ImpactAlpha to reimagine the ideas, rules and power dynamics of a new market-based system. Think bigger.
- Confronting income inequality. Excessive income inequality “slows economic growth, leads to more frequent and deeper recessions, limits upward mobility, aggravates social cohesion, and exacerbates political polarization,” The Investment Integration Project, or TIIP, writes in “Confronting Income Inequality,” which provides a framework for investors to take action. Onward.
- Compassionate capitalism. U.S. Representatives Chrissy Houlahan (D-Penn.) and Dean Phillips (D-Minn.) have formed the “compassionate capitalism caucus” in Congress. The lawmakers are launching the forum today with IMAGINE’s Paul Polman, U.S. Impact Investing Alliance’s Fran Seegull and Work Wisdom’s Kedren Crosby. Tune in to “Foundations of a Mission-Driven Economy,” today at 9am ET.
- The beat and The Call. Follow all of ImpactAlpha’s coverage of Capitalism Reimagined on our new landing page. And jump into the Capitalism Reimagined conversation with other Agents of Impact on Call No. 29, Tuesday June 29 at 10am PT / 1pm ET. RSVP today.
2. Gates Foundation’s ‘global access agreements’ come up short. When it came to securing affordable access to life-saving COVID vaccines for low- and middle-income countries, the foundation’s Global Access Agreements proved toothless. The foundation requires grantees and investees to provide low-income countries with affordable access to health innovations, but not, it seems, to COVID vaccines. Keep digging.
- Foundation response. “It would be incorrect to say that global access has ‘proven ineffective’ in the context of the pandemic when COVID-19 was not a target condition – and could not have been anticipated – at the time that we provided funding to companies that later produced COVID-19 vaccines and other COVID-19 products,” a foundation spokesperson told ImpactAlpha after we posted our article. “Our funding does not give the foundation global access rights to every product the company develops.”
- Further reading. Over at The Nation, journalist Tim Schwab dug up additional information about the Gates Foundation’s Global Access Agreements, including with CureVac, which has developed a COVID-19 vaccine that is now awaiting approval.
3. Catalyzing impact-first capital for early-stage climate tech. Venture capital investments in clean technologies grew more than 25-fold to more than $16 billion between 2013 and 2019. But there’s still a large funding gap at ventures’ earliest stages that philanthropic investment can bridge, argues David Kenney of VertueLab, which has raised more than $3 million for its early-stage Climate Impact Fund. Ante up.
- Risk tolerance. There are some surprising standouts among investors placing large bets on technologies to decarbonize industries: Singapore’s sovereign wealth fund Temasek, Hong Kong billionaire Li Ka-Shing’s venture fund Horizons Ventures, Valor Equity Partners, Box Group and GV, the $5 billion venture arm of Alphabet.
4. Tallying the financial risks of biodiversity loss. After the Task Force on Climate-related Financial Disclosures, or TCFD, comes a Task Force on Nature-related Financial Disclosures. Refinitiv’s David Craig, co-chair of the new TNFD, aims to create a framework by 2023 to help organizations report and act on nature-related risks. “Without urgent action, ongoing loss to biodiversity poses unprecedented risks for business, both now and in the future,” Craig says. Read on.
- Mandatory climate disclosure. A group of 180 investors with nearly $2.7 trillion in assets under management, along with more than 200 companies and nonprofits, is the latest to call for mandatory corporate reporting on climate risks. Also supporting such a move: the G7 group of nations. The Securities & Exchange Commission is accepting comments on the issue through Monday, June 14.
5. Taxing revenue-based finance. Investors and fund managers using revenue-based financing structures are wondering, “Are these deals equity or debt?” The tax implications are significant. Revenue-based structures should be considered “a third category that can have a mix of equity and debt risk-return characteristics,” writes Toniic’s John Berger. “Perhaps someday tax authorities will agree.” Read more.
6. Alt-financing tools for early impact enterprises. A growing set of “alt-finance” providers are developing creative capital tools to help founders launch, grow and retain control of their businesses and their impact. “It’s important for both founder and funders to make sure that alternative capital sources are mission-aligned,” Aunnie Patton Power writes in a guest post. Tool up.
The Week’s Dealflow
Climate finance. Germany’s OroraTech scores €5.8 million to provide wildfire detection and monitoring… Brazilian electric motorcycle startup Voltz snags $17.9 million from Creditas… Battery manufacturer Northvolt raises $2.8 billion to expand a gigafactory in Sweden… Germany’s Resourcify raises €3 million to help companies track and manage waste… Apollo Projects backs Terraformation to scale ecosystem restoration.
Economic inclusion. Forward Financing secures a $250 million credit facility to provide revenue-based financing for underserved small businesses across the U.S… Uganda-based small business investor iungo capital inks 30th deal — and first exit… BlueOrchard extends a $15 million loan to Dhaka-based lender LankaBangla Finance… Urban Company secures $255 million for its gig marketplace in India.
Inclusive fintech. Abhi raises $2 million to help Pakistani workers access earned wages…Bangalore-based Refyne raises $16 million from DST Global and RTP Global to help workers access their earned wages… Victory Park Capital is using a SPAC to take public responsible banking app Dave… Brazilian fintech Nubank rakes in $1.2 billion for Latam expansion.
Fund news. Citi Impact Fund takes stakes in Greenwood, MoCaFi, Moving Analytics, OhmConnect and Sweeten… Media Development Investment Fund backs Volume to bolster independent media in South Africa… Woman-led ESG venture fund MPower Partners launches with commitments from Dai-ichi Life Insurance Co., Sompo Holdings and Sumitomo Mitsui Trust Group.
The Reconstruction. L.A.-based VamosVentures raises $50 million fund for early-stage tech companies led by Latino and other diverse founders… Georgia Power commits $75 million to advance racial equity and justice in Georgia… Harvard Business School students’ impact fund secures $200,000 to back BIPOC-led small businesses.
Access to… KKR Global Impact backs EQuest Education’s low-cost schools in Vietnam… India’s Pahal Financial Services secures $5 million in debt from WaterEquity… Aunt Bertha raises $27 million to connect people to social services.
Clean energy. Melbourne-based solar-plus-storage developer RayGen Resources raises $21 million… D.light secures $10 million from French development finance institution Proparco… Kenyan solar startup Pawame secures $2.5 million in grants and equity.
The Week’s Talent
Canadian asset manager Deetken Impact acquires Mexico City-based Adobe Capital from New Ventures Mexico. Adobe’s Erik Wallsten will join Deetken as a partner… Fiona Reynolds steps down as head of the U.N. Principles for Responsible Investment… Karen Wong, ex- of Mellon Investments Corporation, joins State Street Global Advisors as global head of ESG and sustainable investing… Brian Chase, ex- of BlackRock, joins Quinbrook Infrastructure Partners as managing director and global lead of capital formation and investor engagement… Osei Van Horne, ex- of Wells Fargo, is named managing partner and global head of sustainable growth-equity investing at JPMorgan Private Capital… Otho Kerr, ex- of Acumen, joins the New York Federal Reserve as director of strategic partnerships and community impact investing.
The Week’s Jobs
New Island Capital is looking for a managing director of private credit, a managing director of private equity, and a vice president of real estate in San Francisco… Inclusive Prosperity Capital is recruiting a chief investment officer in New York or Hartford, Conn… Illumen Capital is looking for a bias-reduction intern in Oakland… BlueMark seeks a business development associate… Tideline and BlueMark are looking for an executive assistant… Acumen seeks an investment associate and a partnerships associate in San Francisco… Sustainable Capital Advisors is hiring a senior analyst of ESG engagement in Washington, D.C.
Chloe Capital has openings in business development and marketing in Ithaca, N.Y… Tides is hiring a senior advisor of philanthropy… The Climate Corporation is recruiting a product manager of carbon and sustainability in San Francisco… Capital for Climate is looking for a head of climate funds research and evaluation… Prime Impact Coalition is accepting applications for a fall internship and from BIPOC candidates for its entrepreneur-in-residence fellowship.
Village Capital is hiring a vice president of partnerships in Washington, D.C… The LTSE (Long-term Stock Exchange) is looking for a head of business development… Morgan Stanley Wealth Management has openings for a vice president and an assistant vice president on its ‘investing with impact’ team in New York… Rippleworks Foundation seeks a U.S.-based talent partner for its expert network and a programs manager… Kresge Foundation is hiring a Detroit-based program officer.
That’s a wrap. Have a wonderful weekend.
– June 11, 2021