The Week in impact investing: Workers

The team at

ImpactAlpha

TGIF, Agents of Impact! 

🗣️ Reimagining labor. Before they became a scapegoat for inflation, U.S. workers were enjoying a long overdue revival. With demand strong and talent scarce, employers were competing, unions were organizing, and real wages were rising sharply – for the first time in decades. The rising prices eating away at those gains owe more to supply chains, Ukraine and oil markets than they do to pay raises. So this Labor Day, clink your cup to workers’ resilience. Employees of Starbucks, Amazon and Chipotle have unionized. California’s legislature has approved bargaining rights for fast food workers. Gallup reports that U.S. public approval of labor unions is at a 57-year high. An increasing number of enterprises have employee owners. “The American worker has already proven that it is the engine of productivity. It has not captured the profits from that productivity,” says Roy Swan of the Ford Foundation, who has built an investment strategy around quality jobs. For all the talk of “reimagining capitalism,” it is labor that creates value. One sure way to build popular support for ESG and impact investing: share the wealth. – David Bank

We’re taking a Brief break for the U.S. holiday weekend and will be back Tuesday, Sept. 6. Meanwhile, catch up on these pieces from The Week:

  • Parsing the ESG regulations. Strategies to speed the clean energy transition that come with attractive risk-adjusted returns need not call themselves “green,” ImpactAlpha contributing editor Imogen Rose-Smith writes in her latest Institutional Impact column. In states like West Virginia, Florida and Texas, they probably won’t.
  • Climate adaptation. Epic floods in Pakistan highlight a gap in climate funding for emerging markets, reports ImpactAlpha’s Amy Cortese.
  • Muni impact. Cities like Nashville, Las Vegas and St. Paul are covering or removing highways to reconnect communities, reports Andrea Riquier for ImpactAlpha.
  • Education innovation. Education funders can leverage innovative financing instruments to flip the odds in favor of students in the Global South, write guest authors Kusi Hornberger and Ines Charro from Dalberg and Nirav Khambhati of Kaizenvest.
  • Lived experience. “I am a Black fund manager,” writes Living Cities’ Thaddeus Fair, who shares the personal toll of deploying capital to redress racial wealth gaps. “I don’t have the luxury of putting on the racial equity suit when I come to do this work only to remove it once I clock out”… And founders who have faced challenges themselves offer fresh insight “into invaluable opportunities to drive incredible impact,” argue Taylor McLemore of Techstars and Angela Jackson of Kapor Center. 

👋 Agents of Impact Call: Mapping opportunities for catalytic climate capital. The floods in Pakistan shine a spotlight on the yawning gaps in climate-adaptation capital. BlocPower’s Donnel Baird, Shell Foundation’s Ashish Kumar, and Jonathan Phillips of Duke University’s Energy Access Program will join ImpactAlpha’s Amy Cortese and David Bank on our first Call of the season. We’ll explore effective strategies for bridging climate capital gaps in emerging markets, low-income communities, climate adaptation and climate justice.

  • Climate finance tracker. Vibrant Data Labs’ Eric Berlow will launch ImpactAlpha’s map of climate investments and trends.
  • Answer the Call, Wednesday, Sept. 14, at 10am PT / 1pm ET / 6pm London. RSVP today.

🎧 Impact Briefing. ImpactAlpha’s dealflow reporter Roodgally Senatus joins host Brian Walsh to track the startups and investors racing to develop low- or no-carbon concrete, one of the most stubborn obstacles to decarbonizing the built environment. Cement is responsible for up to one-tenth of all greenhouse gas emissions. Plus, the headlines.

The Week’s Chart: Oil Killers

The end of oil starts with electric bikes, tuk tuks and rickshaws. Electric cars get the glory. But it is electric two- and three-wheelers – from e-bikes in the U.S. to rickshaws in Mumbai – that are gutting emissions. EVs of all types are displacing about 1.5 million barrels of oil daily, or roughly 3% of road fuel demand, according to BloombergNEF’s Electric Vehicle Outlook 2022. The bulk of that displacement can be credited to the 280 million two- and three-wheel e-vehicles on the road today, not the roughly 20 million electric passenger cars. In India, electric three-wheelers make up almost 40% of the country’s vehicle fleet.

The Week’s Dealflow

​​Deal spotlight: Impact upgrades. When the pandemic hit, concerns about single-use waste went out the window as people stocked up on disposable face masks, disinfecting wipes and plastic bottles of hand sanitizer. The pandemic’s plastic waste may total more than eight million tons, much of it from hospitals. Mexico-based MEDU is among the many startups seizing the opportunity to give established systems an impact upgrade. The company raised $4 million to get healthcare facilities using its surgical gowns, head coverings and other wearables, which can be used up to 50 times and then recycled, saving hospitals money, says MEDU’s Tamara Chayo

  • Sustainable modernization. This week, Denmark-based Blue World raised $37.2 million from Breakthrough Energy Ventures Europe and others to develop methanol-based fuel for the shipping industry. Its fuel cells can be retrofitted into existing shipping vessels. They also contain a CO2 capture mechanism that allows them to recycle the gas into more fuel. In Nigeria, fintech venture AjoMoney raised a pre-seed round to digitize traditional, offline savings circles in African communities.
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Green infrastructure. Dryad secured €10.5 million for ‘ultra-early’ wildfire detection… eSmart Systems secured €40 million to provide inspection and maintenance services to global utilities for critical energy infrastructure… Temasek and HSBC committed $150 million for green infrastructure in Southeast Asia… Rockefeller Foundation tapped satellites and AI to guide green infrastructure in Africa… U.K.-based Anaphite scored £4.1 million to incorporate low-cost graphene into lithium-ion batteries for faster charging.

Climate finance. Amp Energy secured $155 million for community solar and energy storage in New York and Massachusetts… Apple is accelerating Black, Latinx and Indigenous-owned suppliers to meet its climate goals… Carbon Counts raised $7 million to gamify climate change… Family Forest Carbon secured $4.8 million from Link Logistics… Merak Ventures is looking to raise $100 million to invest in seed-stage climate, insurance and enterprise tech startups in India.

Farmer finance. Harvesting Farmer Network secured $4 million from Social Capital to help smallholders in rural India access farm inputs and financial services… Mumbai-based impact fund Ankur Capital backed IBISA to make agri-insurance products more accessible and affordable for India’s smallholder farmers. 

Impact tech. Sea6 Energy raised $18.5 million to convert red seaweed into biofuel and other bio-renewable products to replace chemicals and plastics… Vive Crop Protection scored $26 million to help farmers improve crop quality sustainably.

Inclusive economy. Friends Provident Foundation will double its £1.5 million allocation to Snowball… A program backed by Access Ventures will provide $100,000 each to five organizations addressing barriers to employment in Louisville, Ky. and southern Indiana.

Investing in health. MedGenome, a Bangalore-based genetic testing company, secured $50 million in a round led by Novo Holdings… The Bill & Melinda Gates Foundation invested $5 million in Bactolife to reduce the risk of gut infections in humans and animals.

ESG. Metlife Investment Management will acquire Affirmative Investment Management, a London-based fixed-income fund manager that specializes in ESG impact.

Financial inclusion. EarlySalary raised $110 million for instant-cash loans to India’s young earners… Duplo raised $3.4 million in a seed round to digitize payments for African merchants.

Impact crowdfunding. Organic brand Coyuchi is looking to raise capital from the crowd.

The Week’s Talent

Tim Youmans, ex- of Federated Hermes’ EOS, joins Calvert Research and Management as executive director and corporate engagement strategist… Lisa Mensah is stepping down as Opportunity Finance Network’s president and CEO (see “Agent of Impact: Lisa Mensah”); Beth Lipson, a 25-year OFN veteran, takes over on an interim basis… Andy Jarvis, ex- of the Alliance of Diversity and CIAT, will join Bezos Earth Fund as director for the future of food… Ilmi Granoff, formerly of ClimateWorks Foundation, will be a visiting senior fellow at the London School of Economics’ Grantham Research Institute on Climate Change and the Environment.

The Week’s Jobs

The California Endowment is hiring an investment officer for mission related investments in Los Angeles, Sacramento, Oakland, Fresno or San Diego… Big Society Capital is looking for an ESG and equality, diversity and inclusion manager in London… LeapFrog Investments seeks a profit with purpose analyst in Mumbai or Singapore… The Bridgespan Group is hiring an editor in Multnomah County, Ore.

The Pew Charitable Trusts is looking for a principal associate for its Enduring Earth initiative in Washington, D.C… Also in D.C., Living Cities has several open positions… VCC Social Enterprises is recruiting a staff accountant in Christiansburg, Va… The Segal Family Foundation is hiring a partnerships officer in Warren, N.J… The Clinton Foundation is looking for a senior community manager for inclusive economic growth and recovery, based in New York… Elevar Equity is recruiting a Latin America office manager in Mexico City.

The World Economic Forum seeks a lead for financial innovation in New York… The Connecticut Green Bank is hiring a director of environmental infrastructure programs and a senior accountant in Hartford… Founders First Capital Partners is hiring a remote underwriting associate… Bamboo Capital seeks a senior subsidy manager… North Sky Capital seeks an associate for infrastructure investments in Boston.

That’s a wrap. Have a wonderful weekend. 

– Sept. 2, 2022