The Week in impact investing: Mobilizing for transformative change



TGIF, Agents of Impact! 

This fall’s impact investing and sustainable finance conference circuit needs to justify its carbon footprint, not to mention the many thousands of talent-hours it consumes. If Climate Week in New York established the urgency and scale of the challenges, and the Global Impact Investing Network’s investor forum in Amsterdam suggested financial institutions are ready to move, next week’s SOCAP and COCAP gatherings in the Bay Area should be about mobilizing a broader movement for transformative change. Across sectors, stages, asset classes and geographies, Agents of Impact are hacking capitalism to make finance a cool tool for a new economy.

That means redistributing wealth, democratizing power and shifting economic control to long-marginalized communities, as Common Future’s Rodney Foxworth told us (see Agent of Impact, below). It means overcoming barriers to capital in low-income communities, as Enterprise Community Investments’ Julia Shin, Habitat for Humanity’s Daniel Gura and Sixup’s Sunwoo Hwang, will demonstrate in my Wednesday panel at SOCAP. It means harnessing the power of Silicon Valley to the rigor of impact investing, which I’ll explore Thursday with Future Ventures’ Maryanna Saenko and Fifty Years’ Seth Bannon. And it means digging into the future of financial innovation itself, which ImpactAlpha is proud to be doing in partnership with Adam ConnakerCarli Roth and the team at Rockefeller Foundation at several SOCAP events.

We’re also pleased to announce the winners of our SOCAP ticket giveaway: Empower Generation’s Anya Cherneff (@masterbonz on Instagram) and Tapan “Tops” Kataria (@tapankataria), director of Backstage Detroit, a partner at Venture Catalysts, and chief of staff of Detroit Startup Week. We look forward to meeting them, and many of you, next week.

–David Bank, Editor

The Week’s Agent of Impact

Agent of Impact: Rodney Foxworth, Common Future. Rodney Foxworth moved from Baltimore to Oakland, Calif. nearly two years ago to lead the Business Alliance for Local Living Economies, or BALLE. He was overtaken with numbness and heartache with this week’s death of his hometown Rep. Elijah Cummings. “Baltimore exemplifies the story of America in the 21st century,” Foxworth told ImpactAlpha. “My hometown is beset by post-industrialization, systemic anti-black racism, racialized mass incarceration, segregation, economic dislocation, and poverty, as are communities across the country.” In Oakland, Foxworth found many of the same challenges, but also gentrification, wealth, and inequality. “I was also entering the so-called hub of technology and innovation, including impact investing, an emerging field that continues to fall short of its vast potential to redress the most urgent challenges that affect society today, challenges that are deeply apparent in Baltimore, Oakland, and San Francisco.” BALLE’s new name reflects both that challenge and opportunity. “Stepping into Common Future allows us to really think a lot bigger than the organization has in the past,” he says.

In Baltimore, Foxworth spearheaded social and economic development initiatives, including co-founding Impact Hub Baltimore and launching Invested Impact, which advises investors interested in funding local changemakers. He is positioning Common Future as a platform for on-the-ground experts (BALLE’s network of local fellows) who can help investors effectively deploy their capital for impact, including in opportunity zones. Foxworth, a BALLE fellow himself, is keen to demonstrate that his fellow fellows’ disruptive ideas—from new funding models for entrepreneurs of color to rural economic development initiatives—are ready for scale. That’s a fitting tribute to Rep. Cummings. “He was defiant but diplomatic; bold but meticulous; visionary but grounded,” Foxworth says. “We need to bring these lessons in leadership to the world of impact investing, and remember to always speak truth to power.”

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  • Q&A. Rodney Foxworth talks with ImpactAlpha about building a Common Future. Go deeper.

The Week’s Big 6

1. Neil Gregory’s real talk about transparency in impact investing. The International Finance Corp. is concerned about impact washing as impact investing scales. The private sector arm of the World Bank introduced the Operating Principles for Impact Management earlier this year. As the original signatories prepare for their first public disclosures next April, Gregory hopes that the result will be a race to the top in impact integrity. “It’s not something you can just sign up to and worry about implementation later,” says Gregory, the IFC chief thought leadership officer. Get his take.

2. Soros spinout is helping Leyline de-risk the clean energy transition. Too much risk in the investment pipeline is slowing the shift to low-carbon energy sources. Leyline Renewable Capital is backing projects at the pre-development stage, where many investors fear to tread. Newlight Partners, a spinout of Soros Fund Management, invested $150 million to accelerate Leyline’s lending. “Environmentally, we’re running on borrowed time,” says Leyline founder Erik LenschDive in.

3. Catalyzing private capital for public good through philanthropy. Less co-investing. More willingness to take lead, early, junior and gap-filling positions that draw additional capital to solutions that matter. In a guest post for ImpactAlpha, Mission Driven Finance’s David Lynn argues that philanthropy’s goal shouldn’t be to co-invest with mainstream private equity players. “Foundations should instead be working to entice the SoftBanks of the world to invest where it will have the most impact.” Read on.

4. Climate-smart private equity investors take leadership in Africa. “We are in the midst of an innovation cycle where transformative and sustainable business models are gradually replacing their predecessors,” says Michelle Kathryn Essomé, CEO of African Private Equity and Venture Capital Association. In a guest post on ImpactAlpha, Essomé calls on Africa’s more than140 private equity firms to seize opportunities in renewable energy, climate-smart agriculture and climate-resilient infrastructure and lead in the fight against climate change. Hear her out.

5. More than two dozen new funds that are investing with a gender lens. Dozens of new funds worldwide are trying to widen women’s slice of the venture capital pie. Ahead of the annual Project Sage report, Catalyst At Large Suzanne Biegel offers a sneak peak of this year’s featured funds, including dating app Bumble, women’s empowerment organization Pro Mujer, and others. Check it out.

6. Is impact investing in New Zealand ready for takeoff? Just 1% of New Zealand’s $889 million in private assets are impact investments. But the appetite is there. Investors representing about 10% of New Zealand’s private assets say they plan to shift about $6 billion toward impact in the next five years, according to the country’s first in-depth impact investing survey. What could shift capital faster is a stronger deal pipeline and evidence of social and financial performance. Behind the numbers.

The Week’s Dealflow

Driving sustainability. PepsiCo issues $1 billion green bond to finance sustainable practices… ING issues sustainability-linked loan to Quadria Capital… BlackRock commits $20 million to circular economy fund.

M&A. French responsible investment firm Mirova completes acquisition of Althelia.

Financial inclusion. Gig economy insurer Verifly rebrands as Thimble and raises $22 million… True Balance closes $23 million to expand mobile payments to rural India…M&T Bank invests $5 million to support rural U.S. businesses.

Strengthening ties. Caribu secures $3 million for family learning app… Papa raises $10 million to help seniors combat loneliness.

Clean consumption. Future Meat and Wild Type raise Series A funding for lab-grown meats… HCAP invests in bamboo diaper subscription service DYPER.

Energy future. Clean Energy Ventures closes $110 million fund for energy innovation.

The Week’s Talent

Farewell to serial social entrepreneur, development critic and advocate for the poor Paul Polak, who died last week… Economists Abhijit Banerjee and Esther Duflo of MIT and Michael Kremer of Harvard University won the Nobel prize in economics for their “experimental approach” to fighting global poverty… Monica Edwards, former president of Bridge Impact Capital, is Oakland’s new chief Opportunity Zone officer… Stephanie DiMarco (Advent) and Jennifer Grancio (iShares) join Ethic’s board of directors… Mercy Corps appoints Beth deHamel as interim CEO as the organization wrestles with the fallout from a scandal involving its late co-founder.

The Week’s Jobs

The California Endowment is looking for an impact investing analyst and associate… In New York, The New Economy Project seeks two attorneys to join its legal team and Veris Wealth Partners is looking for an impact investment research intern… Rethink Impact is looking for an associate in San Francisco or New York… Pure Strategies is hiring a sustainability advisor in Gloucester, MA.

Thank you for reading. 

– Oct. 18, 2019

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