TGIF, Agents of Impact!
Impact Briefing. On this week’s podcast, host Brian Walsh speaks with ImpactAlpha‘s Dennis Price about “refugee lens” investing, and how Agents of Impact are prototyping investment approaches for mainstream investors and policymakers. John Kluge of the Refugee Investment Network and ImpactAlpha’s David Bank weigh in. And we’ll revisit the legacy of the late Tony Hsieh, the driving force behind both Zappos and Las Vegas’s Downtown Project – and this week’s Agent of Impact. Plus, the headlines. Tune in, share, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 7
1. Refugee investment blueprints. President-elect Joe Biden has signaled a Day-One reset on immigration. The network of investors, funds and companies driving affordable housing, healthcare, mobile banking and other solutions for migrants and refugees represents a set of blueprints and proof-points for the incoming administration. Says Refugee Investment Network’s John Kluge, “We’re starting to actually see a track record in the field.” Dig in.
2. Impact assets at cultural institutions. America’s art institutions have been slow to shift their $58 billion in endowment assets into ESG, impact and community-based investment strategies. That is changing, from Andy Warhol’s museum to the Louvre. In Baltimore, the Walter Art Museum is deploying more of its $170 million endowment to socially-responsible and impact investments. “To be a transformative force for good in the city, this is exactly the kind of work that we need to be doing,” says the museum’s Julia Marciari-Alexander. Get moving.
3. Climate financing is not keeping pace. New records were set in 2020 for land and sea temperatures, Arctic ice shrinkage, and acres lost to wildfires in the western U.S., according to the U.N.’s World Meteorological Organization. Financing for the low-carbon energy transition, however, is flat or falling. Climate Policy Initiative expects 2020 spending to fall from 2019, when public and private investment totaled just over $600 billion. Between $1.6 trillion to $3.8 trillion is needed each year in climate spending to stay within the global warming goals set by the Paris climate agreement. Read more.
4. Impact disclosure and accountability. Accountability mechanisms let people and communities negatively affected by development projects or impact investments raise issues with decision-makers. Accountability Counsel’s Margaux Day looked at 74 disclosure statements from impact fund managers under the International Finance Corp.’s Operating Principles for Impact Management – only three signatories report having accountability mechanisms in place. Such mechanisms are critical impact tools, Day writes, because they “provide investors with a way to learn of and address potential negative impacts before they drive an investment materially off course.” Onward.
5. Updating ‘exclusion lists’. Lists of no-go companies have for decades helped investors trying to keep their portfolios free of activities that impose a negative social toll or carry significant legal or regulatory risks. “An expansion of the lists to root out industries and business models that are counterproductive to impact will foster greater confidence in the investment industry as a tool for good,” writes ImpactAlpha contributing editor, Dmitriy Fotiyev. Read on.
6. Private prison risk. Candide Group and founding partner Morgan Simon called out private prison operator CoreCivic’s role in the separation of migrant families – drawing a defamation lawsuit from the Nashville-based company. A federal judge tossed the suit, ruling that CoreCivic did incarcerate migrants separated from their children, making Simon’s statements “true enough.” President-elect Biden has pledged to “stop corporations from profiteering from incarceration.” Keep reading.
7. Total vs. Neste Oyj. The latest Impak Battle in ImpactAlpha‘s series with impact ratings agency impak pits Finnish energy company Neste Oyj against French oil company Total. Spoiler alert: it’s not much of a duel. Neste Oyj began its shift towards renewable energy a decade ago; at Total, renewables represent just 1% of company activities. Check it out.
- More face-offs. Nestlé vs. Danone, Engie vs. Enel, Novartis vs. Sanofi and Crédit Agricole vs. BNP Paribas.
The Week’s Agent of Impact
Tony Hsieh, Zappos and Downtown Project (1973 – 2020). You could almost see the tumbleweeds blowing down the streets of downtown Las Vegas when Tony Hsieh launched The Downtown Project in 2012. After selling the shoe retailer Zappos to Amazon for $1.2 billion, Hsieh moved the company to downtown Las Vegas and poured $350 million into revitalizing the blighted area, far from the city’s glitzy Strip. The Downtown Project invested in 50 small businesses, from restaurants to toy stores, as well as 50 tech startups in the area, and seeded arts festivals, residential housing and an early education center. The project may have been overhyped, and was criticized for its over-reliance on real estate investments. Hsieh left the active management of the project in 2014. Much of the 45 downtown acres it acquired remain undeveloped.
Hsieh died this week, several weeks after being injured in a house fire. Social media lit up with paeans to the customer-obsessed culture Hsieh pioneered at Zappos. He was also an early mover in place-based investing. Hsieh created an opportunity zone before there were Opportunity Zones. When Steve Case launched his Rise of the Rest initiative to invest in “emerging communities” in 2014, Hsieh was already neck deep in one. Hsieh eschewed top-down master-planning and invited residents and businesses to co-create a community; “return on community” was a key metric of success. Natalie Young, a former chef on the Strip, opened the restaurants Eat and Old Soul after Hseih gave her a $225,000 interest-free loan. She now runs an internship program for at-risk youth and transitioning adults. “Tony was a sweet, gentle soul who marched to the beat of a different drummer, thank goodness,” Young said. “That man changed my life in the most profound, positive way possible.” – Amy Cortese
The Week’s Dealflow
Impact tech. Third Derivative aims to accelerate climate tech… Aphea.Bio secures €14 million to develop eco-crop treatments… Aurora Solar raises $50 million to digitize solar energy… Habitat for Humanity aims to accelerate shelter tech startups in emerging markets.
Basic needs. Inclusio seeks to anchor its social mission by going public… Texas foundations make emergency loans to strengthen community clinics for COVID… Ethical Housing raises £7.5 million for affordable housing in the U.K.
The Week’s Talent
ImpactAlpha contributing editor Monique Aiken, ex- of Mission Investors Exchange, joins The Investment Integration Project as managing director… Thierry Adant, formerly with Willis Towers Watson, is named chief investment officer at Newmarket Capital… Casey Family Programs’ Antoinette Malveaux and University of Washington’s Reggie Brown have been elected to the Beneficial State Bank board of directors… Taryn Goodman Gallery, former food and agriculture lead for TPG Rise Fund, joins Cultivian Sandbox as managing director.
Surdna Foundation’s Don Chen becomes co-chair, alongside Ford Foundation’s Darren Walker, of the Presidents’ Council on Impact Investing, a philanthropic leadership group… Agnes Dasewicz is named co-CEO of global impact fund SEAF, joining current CEO Bert van der Vaart. Dasewicz helped launch Kauffman Foundation’s Capital Access Lab and served as director of USAID… Irvin “PeDro” Cohen is the new executive director of the Jacksonville, Fla. arm of Local Initiatives Support Corp.
The Week’s Jobs
Impact Engine is looking for a senior associate in Chicago… The FAIRR Initiative seeks an investor outreach manager in London… The Coalition for Inclusive Capitalism is looking for an operations manager in New York… San Francisco-based Community Vision is recruiting a president… Quantified Ventures seeks summer associates in environmental finance and health and human services in Washington, D.C. or remote.
Thank you for reading.
– Dec. 4, 2020