Greetings, Agents of Impact!
- The Global Impact Investing Network’s “Next Normal Now” series reconvenes on climate action tomorrow, June 16. The agenda includes a keynote from Nuveen’s Jose Minaya, a chat with Cardinal Peter Turkson (see, “Agent of Impact”) and a presentation from Participant Media’s Holly Gordon. RSVP today.
- Agents of Impact Call: Capitalism Reimagined. Former Delaware Supreme Court Chief Justice Leo Strine joins ImpactAlpha and Omidyar Network for “Rewriting rules and designing policy for the stakeholder economy,” Tuesday, June 29 at 10am PT / 1pm ET. RSVP now.
Featured: Institutional Impact
Another election, another flurry of climate activity from New York City’s pension plans. It may seem like last November’s election only just happened (or, perhaps, never stopped happening). But in New York City it’s already election season again. Early voting is underway for next Tuesday’s Democratic primary for mayor, comptroller and other local races. A surefire sign an election is going on: the announcement in March that the $253 billion New York City pension system would increase its investments in climate-change solutions from the $4 billion goal set in 2018 to $6 billion by the end of this year. “Even $6 billion of assets invested in renewable energy and climate solutions over an eight-year period for a $253 billion pension system is nothing,” ImpactAlpha contributing editor Imogen Rose-Smith writes in her latest Institutional Impact column. The new pledge hardly “meets the climate crisis with everything we’ve got,” as Scott Stringer, the current comptroller and mayoral candidate, says is urgently needed.
“When it comes to climate investing, our public pensions are stuck in neutral, or rather, stuck in socially-responsible investment,” Rose-Smith argues. Sustainable investing is not yet the responsibility of the investment office; climate change solutions or ESG mandates are rarely baked into asset allocations. “Instead we have pledges,” she says, leaving little room for educating pension plan trustees or investment staff that investing in renewable and clean energy solutions is actually a good idea. “New Yorkers have the opportunity to exert democratic control over the way their pension systems are managed,” Rose-Smith writes. “They should ask candidates to make the case for climate investing on economic, not political, grounds. And they should make them work with the investment office to shift capital soon, not eight years from now.”
Keep reading, “Another election, another flurry of climate activity from New York City’s pension plans,” by Imogen Rose-Smith on ImpactAlpha. Catch up on all of Imogen’s Institutional Impact columns.
Dealflow: Small Businesses
Sky.Garden raises $4 million to help Kenya’s small businesses go digital. A hot tech trend: helping digitize micro and small businesses in emerging markets (see, “African tech startups are peddling pandemic resilience”). The thousands of small businesses on Sky.Garden’s e-commerce platform also get help navigating formal and informal delivery channels. The Nairobi-based company raised its Series A round from German-backed SANAD Fund for MSME, Aavishkaar, Uncovered Fund and KSK Angel Fund.
- E-commerce for everyone. Aavishkaar’s Ashish Patel said the pandemic underscored the mission of Sky.Garden’s Danish founders to democratize access to e-commerce in Kenya. SANAD, which invests in social enterprises supporting micro and small businesses in Africa and the Middle East, noted Sky.Garden’s commitment to “expanding access to the benefits of e-commerce to the locally-owned businesses that drive the engine of the economy.”
- Digital Indonesia. Separately, Valar Ventures led BukuWarung’s $60 million Series A round to help digitize the country’s micro and small businesses.
- Check it out.
Women-led Hello Alice scores $21 million to support small business owners. The Houston-based platform helps 500,000 small business owners around the world access capital and resources. Its COVID-19 Business Resource Center raised and deployed $20 million in grants and resources, targeting minority and women-led businesses.
- Inclusive economy. Hello Alice will launch a mobile app and expand services for small business owners as they recover from the pandemic. The Series B investment round was led by QED Investors, with participation from Backstage Capital, Green Book Ventures, Harbert Growth Partners and How Women Investors.
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SupPlant raises $10 million for affordable irrigation for smallholder farmers. The Israeli agtech platform collects real-time data on plants, soil and climate conditions to help farmers make precise irrigation decisions. The technology, which can help farmers save water, reduce costs and improve yield, is for “smallholders that can’t afford access to hardware-intense technology and unique knowledge,” said SupPlant’s Ori Ben Ner. The company is aiming to reach 500,000 farmers in Kenya this year. Its latest round was backed by Boresight Capital, Menomadin Foundation, Smart-Agro Fund and Mivtach Shamir. Dig in.
Dealflow overflow. Other investment news crossing our desks:
- The U.S. International Development Finance Corp. approves $873 million in COVID-recovery and development investments, including a $217 million loan for renewable power in Sierra Leone and $50 million in equity for early-stage fund managers Openspace Ventures and Chiratae Advisors.
- Square completes its $100 million commitment to minority and underserved communities with investments in LISC’s Entrepreneurs of Color Fund and The Bitcoin Endowment, which promotes bitcoin adoption “in historically under-resourced communities across the globe.”
- South Africa’s WhereIsMyTransport secures $14.5 million to help commuters plan transport across formal and informal public transit systems (see, “WhereIsMyTransport maps transit in emerging market cities”).
- Malaysia’s Naluri Hidup raises $5 million to expand digital diabetes care services in Singapore, Indonesia, Thailand and the Philippines,
Signals: Sustainable Investing
Legislation aims to boost sustainable investing options in pension plans. U.S. Senators Tina Smith and Patty Murray and Congresswoman Suzan DelBene introduced the “Financial Factors in Selecting Retirement Plan Investments Act” last month to clarify that pension plan fiduciaries may again consider environmental, social, governance and similar factors in investment decisions (see, “Trump administration seeks to turn back the ESG tide”). The legislation alone will not address issues that are likely to “continue to restrict short-to-intermediate-term progress toward the adoption of sustainable investment,” Henry Shilling of Sustainable Research and Analysis writes for ImpactAlpha. Those issues include the limited number of sustainable fund options with track records of at least three to five years. Go deeper.
- Mixed performance for sustainable funds. In May, sustainable fund equity indices compiled by Sustainable Research and Analysis lagged the S&P 500. The research group’s sustainable bond fund index outperformed the broader bond market for the 14th straight month. Of the underlying funds tracked by the indices, out-performers included Pioneer Fund A (up 1.93%), Morgan Stanley Institutional Core Plus Fixed Income Institutional Fund (up 0.46%) and GMO International Equity Allocation Fund III (up 3.95%). The full analysis.
Legal & General wields stewardship stick. Legal & General Investment Management has divested shares of four U.S. and Chinese companies for failing to address climate risk under a more muscular stewardship approach introduced last year (see, “Legal & General burnishes ‘stewardship’ credentials with push for aggressive climate action”). The companies that were dropped: U.S.-based AIG and PPL Corp., Industrial and Commercial Bank of China and China Mengniu Dairy. Grocery giant Kroger was removed from the asset manager’s exclusion list after improving its deforestation practices and disclosure, according to LGIM’s latest “Climate Impact Pledge” report. LGIM manages $1.7 trillion in assets. During the 2021 proxy season now ending, it voted against the board chairs of 130 companies that fell short of its minimum standards. Share this.
Agents of Impact: Follow the Talent
Lafayette Square is recruiting a vice president of legal in New York… Align Impact has openings for a client advisory associate and an investment strategist in Santa Monica, Calif., and an associate impact advisor in Santa Monica, New York or Chicago… FisherBroyles launches an ESG advisory group… Catalyst Fund creates a “circle of corporate innovators,” including Fidelity Bank, Ecobank, Sterling Bank, Access Bank and the VFD Group, to facilitate corporate-fintech startup partnerships (see, “The Catalyst Fund’s gateway to financial services for the world’s next billions”)… TIIP is hosting “Confronting Income Inequality: Practical guidance for how investors can address income inequality through action on labor relations, workers’ rights, and financial and political equity,” Tuesday, June 22 (see, “Nine ways investors can confront income inequality”).
Thank you for your impact.
– June 15, 2021
