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The Week in impact investing: Sustainability disruption



TGIF, Agents of Impact!

The Week’s Agent of Impact

Leila Janah, Samasource, 1982-2020. Corporations outsourced. Leila Janah impact sourced. With global companies offshoring digital processes to trim costs and boost shareholder profits, Janah more than a decade ago seized the opportunity to grab some of that business to raise incomes for low-income workers. Janah didn’t invent what is now called “impact sourcing,” but she was a fierce advocate and effective promoter for the up-skilling of disadvantaged workers and dignified jobs. Samasource, founded in 2008, has connected thousands of such workers to companies like Google, Walmart and Ford to input data for machine learning and artificial intelligence applications. Next came Samaschool, a digital training center for low-income workers, and LXMI, a fair-wage luxury skincare company. “Often, we think that things are the way they are because of intelligent design,” Janah wrote for Aspen Ideas. “Actually, things are often the way they are because of an accident of history. So it is our duty to challenge things and to make them better than they were in our parents’ generation.”

Janah died on Jan. 23 from complications of epithelioid sarcoma. She has been part of making impact sourcing an established model, along with firms such as Laboratoria (Latin America) and Digital Divide Data (Africa, Asia and North America) that leverage corporate spending, distributed technology and overlooked talent to raise incomes and opportunities for thousands of families. Like Janah, Laboratoria tweeted, “We believe that talent is equally distributed, but opportunity is not.” Friends and colleagues remembered Janah’s will, spirit and vision. “Leila should be so proud that she reconfigured the world in her image just a little bit, and left so many people in love with her,” tweeted Sarah Cone of Social Impact Capital, where Janah was a venture partner. The New York Times’ Nicholas Kristof said Janah “used her brilliance, vision and tech skills to create opportunities for people all over the world.” Acumen’s Jacqueline Novogratz tweeted, “She deeply believed in change, never, ever gave up and will be missed for a very long time.” Shivani Garg Patel of Skoll Foundation wrote, “Leila challenged the status quo when it came to questions around who gets access to dignified work.” – Dennis Price

The Week’s Big 7

1. The ESG investing disruption (podcast). More than $20 billion flowed into ESG exchange-traded funds in 2019 as environmental, social and governance factors were taken up by hard-nosed pragmatists as well as aspirational visionaries. In the classic tech adoption model, “sustainability” may have crossed the chasm from early adopters to the early majority. The flurry of recent announcements reflects the sense of disruption ahead for asset managers and other financial firms. “When you see the disruptive force coming, you scramble,” suggests ImpactAlpha’s David Bank in the latest Returns on Investment podcast. Jump in

2. Climate pressure from pension funds. With global carbon dioxide levels expected to see their steepest annual rise ever, pension funds and other asset owners are cracking down on companies and asset managers not doing enough to transition to a low-carbon future. Mandates, not to mention the planet, are at stake. More.

  • Climate index. The Church of England is putting $780 million into the new FTSE TPI Climate Transition Index of companies aligned with the Paris climate agreement.

3. Alternative capital in Latin America. Softbank may grab the headlines. But Latin America’s fund managers offering flexible term sheets are landing deals that may well be of better value. “There are a lot of new funds coming to market that are more open to creative financial engineering,” Adobe Capital’s Rodrigo Villar. “Most of the really great deals are related to impact.” Check it out.

4. Spread the soil wealth. Soil health is the talk of the campaign trail in Iowa and on the slopes of Davos. But something’s really in the air, er, ground, when organic agriculture features in a Super Bowl beer commercial. Drink up.

5. Guarantee-ing community impact. Nine foundations, a health care system and a nonprofit lender committed $33 million to the Community Investment Guarantee Pool, a clearinghouse to demonstrate the utility of loan loss guarantees. The balance sheet backstop allows “more traditional capital to feel comfortable putting their dollars into community investments,” said Teri Lovelace of Locus Impact Investing, which will manage the guarantee pool. Dive in

6. Impact with cash. Tens of billions of dollars are sitting idle in impact investors’ portfolios. Tiedemann Advisors worked with StoneCastle Cash Management to create federally-insured cash accounts that allocate cash to “community banks that are serving the markets that need capital the most,” says Tiedemann’s Brad HarrisonGet activated.

7. More ways to reshape finance. Open-source compensation, long-term investment horizons, and support for emerging managers. Agents of Impact offered up dozens of ideas for retooling finance in response to ImpactAlpha’s What’s Next series with the Global Impact Investing NetworkSample them.

The Week’s Dealflow

Low-carbon economy. FinCo’s acquisition of GoodFuels gives Social Impact Ventures an exit… General Motors’ all-electric future includes Detroit plant… Software Motors Co. raises $25 million to build more efficient electric motors.

Creative economy. New York City’s WE Venture co-invests in Cosynd to help creatives get copyrights… Wyclef Jean scores $25 million to back geographically diverse musicians.

Alt-capital. Lighter Capital raises $100 million to accelerate revenue-based financing… IIX closes second Women’s Livelihoods Bond at $12 million.

Inclusive fintech. Village Capital to manage $3 million financial health fund for MetLife Foundation… SteadyPay raises £2.9 million to help gig workers weather variable wages.

Locavesting. Canada’s London Community Foundation adds $7 million to finance affordable housing… Fifth Third Bank commits $100 million to Opportunity Zone impact. 

2030 finance. Bamboo Capital scores first-loss funding for SDG500 investment platform. 

Education and jobs. Skills and workforce startups stand out in Techstars’ impact cohort.

Food and agtech. FMO and Rabobank commit $80 million to sustainable agriculture.

Impact tech. P2 Science scores $12 million for ‘green chemistry.’

The Week’s Talent

Conservation biologist Gretchen Daily and environmental economist Pavan Sukhdev win the 2020 Tyler Prize for Environmental Achievement for quantifying the value of the natural environment… New York City hires Meketa Investment Group to develop a fossil fuels divestment strategy for city pension funds… Sophie Robinson-Tillett is the new editor of Responsible Investor… Triodos Investment Management names William de Vries director of impact equities and bonds.

Carolyn Farley joins Arborview Capital as a principal… Susan Davis joins Brighter Investing as senior vice president… Valerie Shen joins Green Growth Fund spinoff, G2VP… Lighter Capital appoints Joe Silver as chief financial officer… Rafael Espinal is selected as executive director of Freelancers Union… Candice Morgan joins GV (formerly Google Ventures) as equity, diversity and inclusion partner… Chantel Rush is named managing director of the Kresge Foundation’s American Cities Program.

The Week’s Jobs

The Democracy Collaborative is seeking a project manager in Washington, D.C… VisionFund is hiring a director of capital markets and innovation finance in London… Capital Impact Partners has four internships in Oakland and the Washington, D.C. area… Tideline is hiring a director in Mumbai… Bridges Fund Management is looking for a head of impact management (to cover a maternity leave) in London.

ISF Advisors seeks a senior strategy associate and senior investment associate in New York, Washington D.C. or Nairobi… UBS is looking for an impact strategy engagement specialist in New York… Sistema.bio seeks a business development associate in Mexico City… Boundless Impact Investing is hiring several part-time interns in New York… The Catalytic Capital Consortium’s New Venture Fund seeks a grant-making program officer in Chicago… Access Ventures is hiring an investment associate and a digital marketing associate in Louisville, Ky.

Thank you for reading.

–Jan. 31, 2020

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