We’re taking a Brief break on Monday for the U.S. holiday. We’ll be back in your inbox on Tuesday.
Memorial Day. The U.S. holiday honors those who have died in military service. This year, we’ll also be remembering the men and women murdered in the Tulsa Race Massacre 100 years ago, in one of the worst acts of racial violence in U.S history (see No. 1, below). “The neighborhood I fell asleep in that night was rich, not just in terms of wealth, but in culture… and heritage,” 107-year-old Viola Fletcher told the U.S. Congress last week. Black Wall Street, as the city’s Greenwood District was known, was the nation’s most prosperous Black community until Fletcher was seven years old. “My family had a beautiful home. We had great neighbors. I had friends to play with. I felt safe. I had everything a child could need. I had a bright future.” Within hours, she said, “all of that was gone.”
The Tulsa commemorations coincide with the one-year anniversary of George Floyd’s murder in Minneapolis. In that year, the racial reckoning has spurred changes, albeit still small, in capital allocations, due diligence practices, municipal bond ratings and more (No. 2). A new crop of fund managers are raising capital – this week it was Atlanta-based Collab – to invest in Black-led businesses (see Dealflow). An increasing number of wealthy families are committing catalytic capital to racial and climate justice and other areas that require flexible, patient or concessionary financing to deliver “impact first” (No. 5). The history of Tulsa, where generations of assets burned to the ground overnight, and many other places, helps explain persistent racial wealth gaps. Fletcher’s younger brother, 100 years old, fought in World War II. He testified alongside his sister and told Congress that he and other survivors have yet to receive justice back home. “Please do not let me leave this earth without justice.” – Dennis Price
🎧 Impact Briefing. On this week’s podcast, ImpactAlpha’s David Bank and Amy Cortese join host Brian Walsh to unpack the stunning news at ExxonMobil, Shell and Chevron – Big Oil’s big reckoning. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
Hitting pause. Clubhouse conversationalists, please note that we won’t be on the audio app today. We’ll pick up the conversation next Friday with a drop-in session designed for Agents of Impact. Stay tuned.
The Week’s Agent of Impact
Charlie Penner, Engine No. 1. He was a driver on the little engine that could. This week, Engine No. 1, a tiny, five-month old activist hedge fund, prevailed where legions of environmental activists and investors had fallen short: shaking up ExxonMobil and forcing the company to take seriously the existential threat of climate change. After a highly contested campaign, Engine got at least two of its four candidates elected to Exxon’s board; a third may win a seat when final votes are tallied. The insurgency stunned Exxon and thrust Charlie Penner, the architect of Engine’s “reenergize Exxon” campaign, into the spotlight. Penner kept a low-profile as he pressed his case through wonky papers and (virtual) meetings with investors. “It has to be the right argument that will resonate with investors,” Penner told ImpactAlpha. Before teaming with tech investor Chris James to start Engine, Penner led impact investing efforts at hedge fund JANA Partners, including a campaign to get Apple to make it easier for parents to limit their kids’ screen time. Engine No. 1 is expected to raise a fund this year; its victory at Exxon put it on the map.
Engine No. 1’s campaign buoyed investors already emboldened by the string of social and environmental wins across corporate America this proxy season. The sense is once you win at Exxon, you can win anywhere. Penner’s playbook: Target binding board elections rather than non-binding resolutions calling only for reports and policy reviews. All four of Penner’s candidates had solid energy and business transformation experience. Incoming Exxon board member Kaisa Hietala, for example, began her career in oil and gas exploration and later ran a fast-growing renewable products division at Neste. Penner secured support early on from influential investors such as CalSTRs and eventually lined up BlackRock and other asset managers historically deferential to management. The campaign tapped a well of investor frustration. New York State Common Retirement Fund, which had tried to engage Exxon for years without success, called Engine No. 1’s victory an historic breakthrough. “This sends a clear message to Exxon that it needs to change the way it does business and address climate risks,” said the fund’s Liz Gordon. Corporate climate laggards everywhere, be warned. – Amy Cortese
The Week’s Big 7
1. The Reconstruction: Legacy of Black Wall Street (podcast). On a special edition of The Reconstruction podcast, Tiffany Crutcher and Greg Robinson of Tulsa’s Met Cares Foundation join host Monique Aiken to reflect on the impact of the Tulsa Race Massacre on survivors and descendants – and how its legacy can shape a more just future. Read and listen.
2. Seven ways the racial justice movement is changing finance. In the year since George Floyd’s murder, hundreds of institutions are integrating racial justice investment strategies. Ratings agencies are pricing cities’ fiscal-justice risk. Black and other non-white fund managers are shining. Collect the whole set.
3. Exxon’s endgame. The successful campaign to shake up ExxonMobil, and the accelerating momentum towards a net-zero carbon future, set up an epic strategic battle at the largest U.S. oil company. Dig in.
- Big Oil’s climate reckoning. Also taking a climate beating this week: Chevron, where a large majority of shareholders pressed for deep cuts in emissions; and Shell, which was ordered by a Dutch court to slash its emissions by 45% by 2030. “This is one of those days that will be seen in retrospect as a day when everything changed,” said Ceres’ Andrew Logan. Check it out.
4. Distributing power and profit in impact investing. In her latest Institutional Impact column, Imogen Rose-Smith calls out “toxic masculinity” in impact investing. “The rich white men who are among the most prominent voices in impact and sustainable investment may be upholding the status quo, rather than disrupting it,” she writes. Heal thyself.
- Catch up on all of Imogen’s Institutional Impact columns.
5. The Call No. 28: Mobilizing catalytic family capital. Hundreds of Agents of Impact joined Ceniarth’s Diane Isenberg, Sobrato Philanthropies’ Sheri Sobrato Brisson and Regan Pritzker of the Libra and Kataly foundations to explore strategies for moving family capital toward impact. “We have no constraints. We’re rich,” Isenberg said. “We’re delighted that we are able to have the flexibility to maximize impact to a sector or geography or community where there’s a dearth of it – because of our flexibility.” The cheat sheet.
- Impact-first capital preservation. Open Road Alliance in the last year deployed $11 million in low-interest emergency loans to 30 social enterprises in food and agriculture, energy, education and other vital sectors. Investors’ 2-4% returns from the fund “isn’t concessionary when it comes to capital preservation – it’s market-rate,” writes Open Road’s Maya Winkelstein. Onward.
6. Better impact measurement and management. Institutional investors with trillions of dollars in assets are demanding impact measurement standards, performance assurance and benchmarks. BlueMark’s “Practice Benchmark” differentiates between practice leaders and learners. The Global Impact Investment Network’s Compass offers a standardized methodology to compare impact across investments and funds. Keep digging.
7. Delivering impact to the last mile. Remote and low-income populations need access to solar lights, improved cooking solutions and agricultural inputs. Growing companies that are reaching them need working capital with appropriate terms, writes Global Distributors Collective’s Emma Colenbrander. Go deeper.
The Week’s Dealflow
Agrifood investing. Indonesia’s TaniHub raises $65.5 mill to expand its agtech platform for smallholder finance across the country… Invaio Sciences rakes in $88.9 million to improve crop health through agriculture science… ProducePay snags $43 million to build an inclusive supply chain for fresh produce farmers… Kula Bio scores $10 million to make sustainable nitrogen bio-fertilizer… Eat Just snags $170 million to scale its cell-based meat subsidiary, GOOD Meat.
Returns on inclusion. Canvas, formerly Jumpstart, scores $20 million to diversify recruitment for its customers… KKR invests $55 million in eSSENTIAL Accessibility to make online platforms and services accessible to people with disabilities… Initiative Ireland partners with Fairfield Real Estate Finance to lend €600 million to build social and affordable housing units in Ireland… Healthcare Georgia Foundation backs the ANDP Loan Fund to expand healthy and affordable housing in Atlanta and across Georgia.
The Reconstruction. LISC closes $250 million to invest in Black-owned banks, organizations and businesses… Wells Fargo backs The Harbor Bank of Maryland and Industrial Bank as part of its $50 million commitment to Black-owned banks… Collab Capital closes $50 million Black innovation fund to in early-stage, Black-led businesses… Synchrony commits $15 million to venture capital funds led by Black, Latinx and female partners.
Clean energy. 60 Hertz Energy secures $1.3 million to help energy providers manage remote microgrid assets… Aurora Sola raises $250 million to solar installers plan installations… Gridware raises $5.3 million to monitor the power grid to prevent power failures and wildfires… Blackstone’s ClearGen commits $500 million to build minigrids for commercial users.
Climate finance. Micron secures $3.7 billion in sustainable linked-loans tied to its environmental performance… Climate tech venture NCX (formerly SilviaTerra) raises $20 million for a 1.2 million-acre forest carbon project.
Frontier finance. Flat6Labs raises $13.5 million to invest in early-stage startups in Egypt… Media Development Investment Fund launches MDIF Ventures to invest in independent media companies in countries with limited access to free and independent news.
Impact tech. Nigeria’s CribMD clinches $2.6 million for its subscription-based digital health services… London-based Cervest scores $30 million to predict climate risks for physical assets… Indigo Technologies raises an undisclosed amount of funding to develop electric vehicles for ride-hailing, delivery and other services.
The Week’s Talent
Carole Ferguson, ex- of CDP, will head up Industry Tracker, a research outfit being launched by Investor Watch Group that will report on carbon-intensive sectors… Anita Umarji, ex- of Bardin Hill Investment Partners, is named managing director/partner and head of investor relations and business development at Sandbox Industries… Danielle Harris is promoted to managing director of engagement and innovation at Elemental Excelerator.
Leland Richards, ex- of Churchill Asset Management, joins Adams Street as partner… Felecia Hatcher, ex- of Miami’s Center for Black Innovation, is named CEO of Black Ambition, a nonprofit launched by Pharrell Williams in December… Katherine Lynch, ex- of Kiva, joins Republic as director of partnerships and communities… Nabiha Saklayen, co-founder of Cambridge, Mass.-based Cellino, is the first recipient of the Tory Burch Fellowship at the Innovative Genomics Institute.
The Week’s Jobs
The Rockefeller Foundation seeks a director of innovation in New York… The U.S. International Development Finance Corp.’s Office of Development Policy is hiring a managing director of impact management and monitoring in Washington, D.C.… Social Venture Circle is looking for a manager of impact investor services, preferably in the Philadelphia area… Energy Innovation: Policy and Technology has an opening for a program officer, preferably in Washington, D.C. or San Francisco… JPMorgan Chase is looking for an associate for its Sustainability and ESG Strategies Growth Equity Fund in San Francisco… Vancity seeks an impact investment manager in Vancouver.
Acumen America is hiring a partnerships associate in the San Francisco Bay Area… The Kapor Center seeks a chief executive office for its Purpose Pipeline in Oakland… Synthesis Capital is hiring a senior associate… Mercy Corps Ventures is looking for a fintech innovation and operations lead… Arlan Hamilton’s ArlanWasHere is hiring a chief operating officer… Arctaris Impact Investors seeks a chief compliance officer in the Boston area… Climate Policy Initiative is looking for a U.K. associate director/director of climate finance… CNote is recruiting a director of impact evaluation.
Pacific Community Ventures has an opening for a lending portfolio director in Oakland… Greentown Labs is looking for an investor program manager in Somerville, Mass. or Houston… Good Jobs First is hiring a research analyst for its Covid Stimulus Watch project in Washington, D.C… Morgan Stanley Investment Management seeks a portfolio specialist/impact strategies vice president… Candide Group is looking for an operations and client services associate in the San Francisco Bay Area… The Global Steering Group for Impact Investment is hiring a knowledge and impact associate in London.
That’s a wrap. Have a wonderful weekend.
– May 28, 2021