The Week in impact investing: Stakes

ImpactAlpha Editor

Roodgally Senatus

TGIF, Agents of Impact!

🗣 Taking a stake. A stake can be a marker, a source of support or a tether. Or something that you wager by taking a risk. The stakes, to say the least, are high in the upcoming U.S. midterm elections, as they have been in elections around the world. Progress on climate can be won or lost, along with our economic revival, as Morningstar’s Jon Hale says on this week’s Impact Briefing podcast. ImpactAlpha’s Amy Cortese laid out what’s at stake for impact, ESG and sustainable investors. Stakes are high as well in efforts to optimize the $4 trillion municipal bond markets for impact and racial equity, as Kimberlee Cornett and Zoila Jennings of the Robert Wood Johnson Foundation shared on an Agents of Impact podcast this week (learn more on the next Agents of Impact Call, “Optimizing muni bonds for racial justice”). Stakeholders – holders of stakes – in communities across the country are eyeing the Inflation Reduction Act as an opportunity for environmental justice, as Dalberg’s Lauren Olosky, Mallory Byrd and Jeff Berger previewed in a guest post. 

Impact fund managers should be staking their financial carry to progress on the impact of their portfolio companies, argues Oxford’s Aunnie Patton Power. ZeroSix, launched this week by ex- Shell executive Martijn Dekker, is staking carbon credits to shuttered oil and gas wells to “keep it in the ground,” as scooped by Cortese. Elemental Excelerator is staking out a new cohort of climate tech ventures with solutions for heavy emitting industries like shipping and construction. The seven fund managers on The Liist of impact funds raising capital in November – and the 21 others we’ve spotlighted to date – are staking out strategies for realizing impact alpha. We all have an ownership stake in shared efforts to build resilience, create opportunity and further justice. Take a position. The stakes are high. – Dennis Price

🎧 Impact Briefing. Morningstar’s Jon Hale joins host Monique Aiken to talk about what is at stake for impact investors in next week’s U.S. election. Plus, the headlines.

👋 Agents of Impact Call: Optimizing muni bonds for racial equity.Investors are pushing issuers for clarity around the impact and equity of municipal bonds. Issuers are delivering, with new tools and best practices. Market shapers are steering the $4 trillion bond market toward health equity and racial justice. Join Public Finance Initiative’s Lourdes Germán, Robert Wood Johnson Foundation’s Kimberlee Cornett and other Agents of Impact, Wednesday, Nov. 16 at 10am PT / 1pm ET / 6pm London. RSVP today.

The Week’s Agent of Impact

Mia Mottley: Barbados’ Prime Minister is shaping the global finance agenda. Barbados is an island nation of just 166 square miles and less than 300,000 inhabitants. But its leader, Mia Mottley, has emerged as a powerful voice for island nations and other countries on the front lines of climate change. Her message: The global financial system erected after World War II needs to reform for an era marked by cascading climate, food and energy crises. Mottley has called for more funding to be unlocked to help countries that have contributed little to global warming invest in climate resilience. As the COP27 climate summit kicks off in Egypt next week, low-, middle- and high-income nations alike are coalescing around Mottley’s Bridgetown Agenda to reform the World Bank, International Monetary Fund and other multilateral development finance institutions. Named after the capital of Barbados, the three-part plan could give nations like Barbados a fighting chance to recover from devastating storms without drowning them in debt. “Every dollar that we pay in interest is a dollar removed from helping to fight poverty,” Mottley saidon the sidelines of the World Bank’s recent meetings. 

Mottley, the first female prime minister of Barbados and the granddaughter of a Bridgetown mayor, was elected in a landslide in 2018. ​​Since then, the London School of Economics graduate has negotiated favorable deals for Barbados, which is still reeling from the Covid pandemic’s hit to Caribbean tourism. She championed a debt for nature swap and secured $183 million from a new IMF climate resilience trust. She has called for solidarity among African and Caribbean nations. And she has proposed a 1% tax on fossil fuel sales in countries that contributed most to climate change – to pay for climate-related loss and damages. “Failure to provide critical finance and that of loss and damage is measured in lives and livelihoods in our communities,” she said at last year’s COP in Glasgow. “This is immoral and unjust.” Her deep, no-nonsense voice may make Western leaders squirm. Perhaps that is exactly what’s needed.

The Week’s Dealflow

Deal spotlight: Nature-based solutions. Demand is surging for high-quality nature-based carbon offsets, and developers are scrambling to supply them. Houston-based ZeroSix, formed by a group of oil and gas veterans, is developing carbon credits backed by shuttered oil and gas wells. Wall Street is also getting in on the action. This week, T. Rowe Price subsidiary Oak Hill Advisors led a $1.8 billion acquisition of 1.7 million acres of forest. The previous owner generated 80% of revenues from the land from timber harvesting. Oak Hill and its partner Anew Climate will reduce those revenues to 20%. Anew claims the firm has become one the 10 largest timberland owners in the U.S. and the only one focused on forest carbon markets. 

  • Blue carbon. Mangroves are even more effective carbon sinks than forests, having the ability to store up to 10 times more carbon (see, “Conservation of mangrove forests could get a boost from carbon credits”). This week, Respira International and Climate Impact X sold about 250,000 metric tons of carbon credits from the Delta Blue Carbon Project in Pakistan, one of the world’s largest mangrove restoration projects, at $27.80 per ton. Over its lifetime, the project is expected to sequester around 142 million tons of carbon.
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Impact tech. Floreo raised $10 million in a Series A funding round for virtual reality behavioral therapy for people with autism, ADHD, anxiety and other conditions… AiDash scored $10 million to forecast storm and wildfire outages and damages for utilities, energy companies and municipalities… Satgana raised funds for climate tech startups in Africa and Europe… AgroSpheres raised $22 million to commercialize its line of sustainable crop treatments.

Low-carbon transition. Elemental Excelerator stocked the climate tech pipeline for hard-to-decarbonize industries… MoEVing secured $2.5 million to provide electric vehicle charging, financing and management services for last-mile drivers and fleet operators in India… Joro scored $10 million in Series A funding to help consumers manage and offset their carbon emissions… Solugen raked in $200 million to expand zero-carbon chemical production.

Circular economy. Ascend Elements raked in $300 million in equity and debt funding to recycle lithium-ion batteries… Salish Environmental Group, which manages a composting and waste recycling business, raised $2.5 million from Raven Indigenous Capital Partners.

Clean energy. Indonesian solar startup Xurya scored $33 million in Series A financing… Neev Fund invested $25 million in Hygenco for a pipeline of green hydrogen projects in India… The Netherlands’ RIFT snagged $2 million to supply businesses with iron fuel for low-carbon heat.

Economic inclusion. DeHaat, which provides smallholder farmers in India with access to inputs, markets and financing, secured $46 million in a Series E round… Kinara Capital, which provides unsecured, no-collateral loans to micro and small businesses in India, secured $24.3 million in equity capital.

Fund news. KKR raised nearly $1.9 billion for its second Global Impact fund… BlackRock secured $4.5 billion for its fourth global infrastructure fund… Orchard Street’s Social and Environmental Impact Partnership fund secured£90 million.

Impact M&A. Equity crowdfunding platform StartEngine is acquiring rival SeedInvest after securing an undisclosed amount of capital from Circle… Bamboo Capital Partners exits Honduran microfinance institution Banco Popular.

Returns on inclusion. Collide Capital raised $66 million to back diverse founders… Baltimore’s Conscious Venture Partners raised $17 million to back purpose-driven startups.

The Week’s Talent

Adam Reinwill succeed CapShift cofounder Jacques Perold as CEO… Ali Abbasi, ex- of NRG, joins Perch Energy as chief strategy and analytics officer… Center Creek Capital Group promotesAkzahara McConaghy to director of operations for the Center Creek Housing Funds. Megan McNulty, ex- of The Promise Homes Company, joins the firm as director of portfolio management… Gareth Zahir-Bill, ex- of Shell Foundation, joins Green Climate Fund’s South Korea office.

Maggie Fried, ex- of New York-based nonprofit CREO, is joining Chicago-based S2G Ventures as vice president of corporate development in oceans and seafood… Christian Braneon, ex- of Columbia University’s Earth Institute, joins Carbon Direct as its first head of climate justice… Noelle Laingof Builders Initiative, Chuck Templeton of S2G Ventures, and Elevar Equity’s Amie Pateljoin Impact Engine’s newly formed advisory board to advise on impact investing, investment firm building, and more. 

Tehmina Haider, ex- of men’s personal care brand Harry’s, and Michael O’Leary, ex- of Engine No. 1, join private equity investment firm L Catterton as partners to lead its new impact fund… Chante Harris, ex- of Venture For ClimateTech and SecondMuse, joins Schmidt Futures for a residency program on climate finance innovation… Elizabeth Seeger, former managing director of sustainable investing at KKR, joins the International Sustainability Standards Board.

The Week’s Jobs

The Equality Fund, a Canadian women-led fund, is hiring a vice president for investment… The Global Development Incubator seeks a senior associate in Mumbai… Rally Assetsis looking for a public equities research associate in Toronto… Silicon Valley Community Foundation is hiring two philanthropy advisors and a director of donor engagement operations in Mountain View, Calif… Goldman Sachs Asset Managementis recruiting an associate for its sustainable investing group in New York. 

The Aspen Instituteis hiring a research associate in Washington, D.C… BerlinRosen is hiring a senior vice president of ESG, philanthropy and impact investing… BlackRock is looking for a vice president/director of corporate sustainability and an analyst on investment stewardship for Latin America… Neuberger Bermanseeks an ESG and impact investing associate… Bain Capital has an opening for an ESG manager of impact measurement and reporting… Tideline is hiring an impact investing analyst. 

Mill Cities Community Investments seeks a development and impact associate… CarbonDirectis hiring a hydrogen scientist in San Francisco… Mission Driven Finance is looking for a senior investment analyst and several other roles… The Drawdown Fundseeks an associate for its investment team in Park City, Utah… LISCis recruiting a manager of legal operations in New York… Boston Network for International Developmentis hiring a program associate in the greater Boston area.