TGIF, Agents of Impact!
Calling emerging market capital managers. In partnership with the Collaborative for Frontier Finance, ImpactAlpha is seeking feedback (by Monday) from local providers of debt and equity to better understand COVID relief and recovery challenges for the businesses they support. Take the survey. Background reading (and listening): “Needed: Responsive, aggregated and accessible capital for (once-) growing businesses in emerging markets (audio).”
Weekly Briefing. On ImpactAlpha’s weekly podcast, host Brian Walsh talks with Dennis Price about the surge in ‘social’ bonds and David Bank about Goldman Sachs’ John Goldstein, this week’s Agent of Impact. Listen to this week’s Impact Briefing, and follow us on Apple, Spotify or wherever you get your podcasts.
The Week’s Big 8
1. Impact principles. The International Finance Corp.’s principles for impact management may help investors distinguish between “impact” funds and… everything else. Case in point: as BlackRock debuted its new Global Impact Fund, it quietly re-categorized three other public-equity funds from ‘impact’ to ‘ESG.’ On ImpactAlpha’s Agents of Impact Call No. 15, Tideline rounded up findings from more than a dozen assessments of investors’ alignment with the operating principles. Come clean.
2. ‘Social bonds’ for COVID relief. Investors are snapping them up. With central banks running out of options and government relief funds quickly tapping out, the $100 trillion fixed-income markets may be a way for private capital to play a larger role in financing the COVID response and recovery. Tap in.
- Eastern and central Europe. On Agents of Impact Call No. 15 yesterday, Alan Rousso broke the news that the European Bank for Reconstruction and Development had boosted its quick-liquidity resilience fund for COVID relief by €3 billion ($3.2 billion), part of the EBRD’s two-year, €21 billion ‘pandemic solidarity package.’
3. Africa’s pandemic-tech. With the continent poised to become COVID-19’s next epicenter, startups such as Field Intelligence, Goodlife and DrugStoc are pivoting to support Africa’s response to the immediate crisis and its health systems more broadly. Explore.
4. Green swans. The COVID crisis is the kind of highly disruptive event that can enable radically new solutions and systems to emerge. ‘Green swans’ can “deliver exponential progress,” says sustainability pioneer John Elkington in an Earth Day conversation with ImpactAlpha. Some examples: Wind and solar. Electric vehicles. Artificial intelligence. And… Impact investing. Take a spin.
5. Gaps in small business relief. Hopes were high in community finance circles that the fresh round of federal small business relief funding would be better targeted at low-income and minority-owned businesses, which were largely locked out of the initial phase of the Paycheck Protection Program. The $310 billion replenishment passed by Congress doesn’t live up. Dig in.
- Rushing capital to rural lenders. Family offices Ceniarth, Candide Group and Money in Motion collectively committed up to $10 million in zero-interest loans and deposits to rural community development financial institutions and credit unions. They are aiming to accelerate lending and demonstrate how impact investors can help bridge gaps in the federal Paycheck Protection Program. Get inspired.
6. S is the new E. The COVID crisis raised the profile of the ‘S’ in ESG, for environmental, social and governance investing. Corporates, asset owners and asset managers are wrestling with questions about workforce, health and other societal issues, said Goldman Sachs’ John Goldstein in discussing the bank’s own efforts, including leading $18 billion in COVID bonds (see, Agent of Impact, below). More.
7. Oil’s epic crash. Plummeting oil prices had traders with oil contracts for May delivery this week willing to pay someone – anyone – to take the crude off their hands. A rebound in prices or a possible bailout can’t paper over the long-term structural decline of the industry, or the need for an orderly wind-down, says IEEFA’s Kathy Hipple. Drill down.
8. Catholic commitments. From an empty St. Peter’s Square, Pope Francis reminded Catholics that the COVID pandemic is an opportunity to attune lives and actions to injustice, the poor and “our ailing planet.” New signatories of the Catholic Impact Investing pledged to move $40 billion towards impact. Step up.
The Week’s Agent of Impact
John Goldstein, Goldman Sachs. Goldman Sachs is among the many financial institutions trying to get out in front of the COVID crisis with ‘social bonds’ and other forms of sustainable financing. The bank had a head start with its commitment last December of $750 billion, over 10 years, in financing for sustainable transportation, agriculture, ecosystem services and clean energy. Goldstein helped champion that announcement as head of Goldman’s sustainable finance group, and this week said the bank has underwritten $18 billion in social bonds so far this year, with perhaps multiples of that coming to help fund COVID relief and recovery.
Goldstein is a crossover figure in impact investing, an industry pioneer – his Twitter handle is @impactinvestor – who went to Wall Street to make more, uh, impact. He was a co-founder of Imprint Capital, a boutique impact investing advisory firm that managed about $550 million when Goldman acquired it in 2015. Now Goldstein is helping institutionalize impact and ESG investing (for environment, social and governance) across Goldman’s $1.5 trillion in assets under management. Simply introducing ESG datasets into Goldman’s corporate credit underwriting can help move tens of billions of dollars, he says. The same with social bonds, which are following the same trajectory as green bonds, which accounted for $258 billion in issuances last year. “Today’s innovation becomes tomorrow’s mainstream, that’s the basic cycle,” Goldstein said this week. “Those early transactions take more time, take more effort, take more work… But once it’s in the toolkit, it’s in the toolkit.”
The Week’s Dealflow
Returns on inclusion. Ureeka raises $8.6 million to connect underrepresented entrepreneurs with funding and mentors… Andela co-founder launches Future Africa Collective for Africa’s everyday investors… National Cooperative Bank tallies $352 million in low-income community commitments.
Impact M&A. Morningstar fully acquires ESG research firm Sustainalytics.
Impact tech. Asian Development Bank’s impact venture arm reaches $50 million fund target.
The Week’s Talent
Eivind Lorgen of Nordea Asset Management and Hans Op ’t Veld of PGGM were named chair and vice chair, respectively, of SASB’s investor advisory group… Project for Public Spaces appoints Kelly Verel and Nidhi Gulati as senior directors of programs and projects… Patrick Kay and Ryan Fraser join North Sky Capital as principal and vice president respectively.
Impact Capital Managers places eight first-year graduate student Mosaic Fellows with impact fund managers, including Community Investment Management, Ecosystem Integrity Fund and Arborview Capital.
The Week’s Jobs
The Beeck Center at Georgetown University launches the Impact Community Job Matching Platform to match students with open roles in the industry… Glenmede seeks an endowment and foundation impact investing marketing manager in Philadelphia… Common Impact seeks a chief program officer in Brooklyn, N.Y… New Island Capital is looking for an associate counsel in San Francisco… The United Nations Environment Programme Finance Initiative seeks a sustainable banking expert and principles for responsible banking review and support lead in Geneva.
New/Mode is recruiting a director of product in Vancouver…. Triodos Bank is hiring a managing director in Driebergen-Rijsenburg, Netherlands… Nordea’s Impact Private Equity group seeks a director of responsible investment in Stockholm… Bridges Fund Management is looking for an investment director of development impact bonds in London… Convergence is hiring a senior associate of market acceleration in Toronto.
Thank you for reading.
–Apr. 24, 2020