Featured: ImpactAlpha Original
Climate Week preview: Fusing climate action and the SDGs to the COVID recovery. Raging wildfires across the western U.S. Intentional ravaging of tropical rainforests. Flooding in Bangladesh, India and West Africa. Melting ice in the Arctic Circle. Against this backdrop, this month’s ‘Climate Week’ is bringing together global leaders to breathe life into the stalled climate action agenda. The annual smorgasbord of events, largely online this year, follows this week’s 75th meeting of the U.N. General Assembly. For U.N. Secretary-General António Guterres, the gatherings are a chance to restart both the climate agenda and progress on the 2030 Sustainable Development Goals as well. With current rates of progress, the world will be 52 years late to meet the SDGs. COVID could push that back to 2092. Says Ceres’ Mindy Lubber: “This decade must be a decade of action.”
Indeed, the COVID crisis presents a once-in-a-generation opportunity, according to the International Energy Agency, to build climate action and social justice into national recovery plans. The European Union committed €550 billion (over seven years) to a “green recovery”; Democrats in the U.S. are pushing similar initiatives. A new report by America’s Pledge, founded by Michael Bloomberg and former California Gov. Jerry Brown, said a “groundswell of bottom-up climate leadership” by states, cities and companies could cut U.S. greenhouse gas emissions by more than one-third below 2005 levels by 2030. The real key: A re-engaged federal government. National leadership on grid modernization and electric vehicle infrastructure could help slash emissions by almost half from 2005 levels. To reach net-zero emissions by 2050, annual additions of renewable energy capacity need to quadruple from 2019 levels. The money is there. The U.S. alone has unleashed at least $5 trillion in COVID aid and stimulus, little of it for a green recovery. “It’s not a question of capacity,” said former Secretary of State John Kerry. “It’s a question of willpower.”
Keep reading, “Climate Week preview: Fusing climate action and the SDGs to the COVID recovery,” by Amy Cortese on ImpactAlpha.
Dealflow: Follow the Money
Dairy processor Tanga Fresh clinches fresh capital and support for smallholder farmers. Tanga Fresh’s growth over nearly 25 years has made it the largest dairy processing company in Tanzania. The company, which processes 80,000 liters of milk per day, raised equity financing from Dutch investment firm DOB Equity to meet rising demand from East African consumers. Farmer support from development nonprofit Solidaridad Network will improve the quality and yield of Tanga’s milk supply, which is sourced from 6,000 smallholder farmers.
- Consumer trends. Less than 10% of milk produced in Tanzania is processed, “leaving a lot of room for growth in the market,” said DOB Equity’s Toine Huijbers. DOB, a family-based impact firm, is re-upping in Tanga to help the company expand long-life milk production, which East African consumers are increasingly buying over fresh milk.
- Dairy hubs. Tanga Fresh, in partnership with Solidaridad and commercial dairy cow breeder Mruazi Farm, is piloting a network of hubs to collect and cool milk from farmers. Solidaridad’s Frederik Claasen told ImpactAlpha that the partnership will boost dairy supply chain efficiency, lower product loss, and align long-term impact and profits.
- Investment de-risking. Nonprofits like Solidaridad, which work to develop sustainable supply chains, expand the pipeline of deals for investors by building capacity and resilience in fragmented and under-developed markets. Said Claasen, “We believe our work in strengthening the supply chain complements DOB’s investment for the benefit of the market and Tanzanian people.”
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Southern Black Girls and Women’s Consortium secures $10 million. The consortium is tackling a glaring lack of investor and philanthropic attention. The Appalachian Community Fund, the Black Belt Community Foundation, the Fund for Southern Communities and TruthSpeaks Consulting launched a fund to finance capacity building for local organizations serving Black women and girls and grants for individual young women “spreading joy during the pandemic” through local art, theater and community engagement. It has provided $300,000 in grants.
- Self-determination. The new approach to fundraising “centers our voices and allows us to play a leading role in shaping our own destiny,” said TruthSpeaks’ LaTosha Brown. “This is vision and self-determination in action, because if we change the future of the Black girl in the South, we change the South.”
- Early backers. The seed capital toward the consortium’s $100 million goal came from the NoVo Foundation, Women Donors Network, Mary Reynolds Babcock Foundation, Lucy and Isadore B Adelman Foundation, Collective Future Fund, and the Momentum Fund.
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VertueLab launches venture philanthropy fund to support early-stage climate tech. The Portland, Ore.-based nonprofit raised $525,000 in donations for startups needing patient capital for sustainable biology- and chemistry-based technologies. Anyone can make a donation to VertueLab’s Climate Impact Fund, which is targeting a $5 million raise. The launch comes amid Oregon’s immediate climate emergency: Deadly wildfires have burned more than one million acres, forced the evacuation of tens of thousands of Oregonians, and raised fears of a “mass fatality” incident.
Freshket raises $3 million to improve Thailand’s food chain. The Bangkok-based startup is connecting farmers and agri-processors with buyers through an e-commerce platform for Thailand’s fragmented food supply chain. The approach is similar to DeHaat in India, which also addresses supply-chain inefficiencies. Woman-led Freshket is backed by Openspace Ventures, ECG-Research, Innospace, food conglomerate Denis Asia Pacific, Thai family office Seedersclub and the founders of TaniHub, an Indonesian agtech startup.
Orange issues €500 million sustainability bond. The mobile operator will use 60% of capital from the nine-year bond for energy efficiency and circular economy initiatives and the other 40% for digital and social inclusion.
Signals: Ahead of the Curve
Fifty years later, resetting capitalism from shareholders to stakeholders. Milton Friedman’s 1970 essay, “The Social Responsibility of Business Is to Increase Its Profits,” turned 50 this week. It has not aged well. Corporate and business voices assembled across the media landscape to bury Friedman’s doctrine of “shareholder primacy” and champion the advent of “stakeholder capitalism” that is responsible to workers, communities, suppliers and the environment, as well as to investors. But a year after 181 CEOs in the Business Roundtable pledged themselves to the stakeholder approach, the birthday bashing should also prod accountability from would-be reformers (see, “Corporate accountability is key to the success of stakeholder capitalism”). “It is good that the business community has awakened,” economist Joseph Stiglitz said in The New York Times. “Now let’s see whether they practice what they preach.”
- Imperative21. An advocacy campaign to “shift the cultural narrative about the role of business and finance in society” launched with a full-page ad in the Times, slick social-media messaging and a music video. “We need an economic system that is designed for interdependence, invests for justice, and accounts for all stakeholders,” said B Lab’s Jay Coen Gilbert, an organizer of Imperative21. “The RESET is about a great alignment of interests to fix a broken system to make capitalism work for everyone and for the long term.” The effort also includes B Team, Chief Executives for Corporate Purpose, Coalition for Inclusive Capitalism, Conscious Capitalism and JUST Capital. “Capitalism, as it exists today, is wildly out of step with our evolving world,” Global Impact Investing Initiative’s Amit Bouri, said in his own video.
- Public benefit. In Fortune, Leo Strine, former chief justice of the Delaware Supreme Court, along with Colin Mayer and Jaap Winter, would require all companies with more than $1 billion in revenues to enshrine purpose in their charters. “We are calling for the universal adoption of the (public benefit corporation) for large corporations,” they wrote. Cornerstone Capital Group’s Erika Karp said the phrase “long term” could go a long way toward driving the thoughtful deployment of financial, natural and human capital. “Investors and corporations have learned a better and more holistic way to serve our shareholders for the long term,” Karp says in the Times. “That is free-market economics for the 21st century.”
- New narrative. That capitalism itself needs the reset and reimagining that impact investing represents was one of the takeaways from last week’s GSG Impact Summit (see, “Impact On: Impact investing’s confident and compelling new narrative”). In the discussion (watch the video replay), Omidyar Network’s Chris Jurgens challenged impact investors to themselves be more accountable to stakeholders. “How is impact investing addressing power and justice? Are parts of impact investing perpetuating current concentrations of power?” he asked. “Are we willing to step in and say some of the most fundamental rules have to be changed to fix the economic system and get at who has power and who doesn’t in this system?”
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Agents of Impact: Follow the Talent
REDF is recruiting a president in San Francisco… Walmart seeks a senior director of strategic Initiatives for ESG, trust and transparency in Bentonville, Ark… The U.N. Sustainable Development Solutions Network is hiring a director for SDSN TReNDS in New York… Luminate is looking for an Africa director to lead grant making, impact investing and advocacy in Kenya, South Africa and Nigeria… Acumen America seeks a portfolio manager in San Francisco… East Bay Permanent Real Estate Cooperative is looking for an investment and fundraising director in Oakland… 57 Stars has an opening for an ESG and impact associate in Washington, D.C… Social Movement Technologies is recruiting a U.S. racial justice movement support coordinator and other roles in the U.S. and Africa… Bridges Impact Foundation is hiring a part-time fall associate for MIINT.
Thank you for reading.
–Sept. 14, 2020