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#Dealflow: Follow the Money
CEOs feel the heat from consumers and employees on ties to Trump. That didn’t take long. First Uber CEO Travis Kalanick quit the president’s business advisory council (but not before rival Lyft capitalized on public perception). Then Disney CEO Robert Iger skipped today’s meeting. Tesla’s Elon Musk decided to go, but took to Twitter to explain he’d use the meeting to express his opposition to Trump’s executive order on immigration. EBay founder Pierre Omidyar warned business leaders, “Any affiliation with Trump White House is a stain on your reputation.” Nordstrom, faced with a boycott, dropped Ivanka Trump’s brand of footwear, bedding and perfume “because of poor sales.”
Grab commits $100 million to Indonesian ‘technopreneurship for social good.’ The Singapore-based ride-hailing service will invest in mission-driven mobile and fintech startups “focused on deepening financial inclusion” across cities and income levels in Indonesia. Grab, an Uber rival that operates in six countries in Asia, raised a $750 million round last year, led by SoftBank, at a valuation of $3 billion. The social impact investment is part of a $700 million “Grab 4 Indonesia 2020 Plan,” that includes an R&D center in Jakarta to train and employ 150 engineers in the next two years.
Inspired Evolution raises $90 million for South African solar and wind projects. The funds, from unnamed development finance institutions, will boost South Africa’s supply of electricity and help it wean itself off coal. The first close for Inspired Evolution’s second fund will let it continue to invest in solar and wind projects across its home country. The firm has announced exits from four projects, representing 300 megawatts of installed clean power capacity from its $90 million first fund. Africa has an estimated clean energy potential, including hydropower, of 190 gigawatts, according to the International Renewable Energy Agency.
Opti’s $5 million raise shows growing interest in climate tech. The stormwater management system Opti has raised $5.5 million to build out its infrastructure monitoring services as U.S. cities cope with increased flooding and water quality issues. Extreme weather events topped the list of concerns at the World Economic Forum last month. The Alliance for Integrative Approaches to Extreme Environmental Events launched with $3 million from Toronto social impact fund ImpactWX to improve severe weather preparedness.
Armenia to open bids for its first solar power plant. The 40 to 50-megawatt plant in the east-central part of the country is part of a $58 million program to improve the country’s capacity for alternative energy generation. Armenia is heavily dependent on Russian uranium and imported natural gas to run its nuclear and thermo plants. The Armenian government expects to open bids for the solar farm later this year.
#Signals: Ahead of the curve
Big banks share best practices for ‘positive impact finance.’ Twenty banks and investors representing $6.6 trillion in assets have released four “principles” that other institutions can use to align their capital with the Sustainable Development Goals. Institutional investors are increasingly concerned about exposure to climate risk. Many proactively screen their portfolios for positive environmental, social and governance criteria in the future. For those just catching on, the sustainable investing framework in “Principles for Positive Impact Finance” might help, along with the report’s guidance for improved due diligence, disclosure and impact assessment processes.
Teaching social business goes mainstream. Nearly half of the top 50 business schools worldwide now have programs focused on social impact, according to Bridgespan Group. Socially conscious millennials, combined with an increasing body of evidence that social responsibility doesn’t hurt (and may even help) long-term profitability, means more business schools are adding impact to their curriculum. “I am a big believer in business. Yet, I would argue that we have not yet realized business’ full potential for improving our world,” Sally Blount, dean of Northwestern University’s Kellogg School of Management, told the 2015 graduating class.
Large companies are shedding employees in favor of contractors. Within a decade, we may see the first large company employing no one other than top executives. The Wall Street Journal catalog of companies that are doing away with full-time jobs and hiring contractors includes Google, Virgin America, Walmart and Pfizer. Contractors make up between 20 and 50 percent of the corporate workforce. By 2020, as much as 45 percent of the entire U.S. workforce could be contract-based.
#2030: Long-termism
Latin America’s youth bulge is driving consumer spending. Consumption in the region’s biggest cities – Mexico City, São Paulo, Buenos Aires, Lima, and Santiago – could grow by three to five percent a year through 2030, according to the McKinsey Global Institute. Altogether, annual spending among 30- to 44-year-old Latin Americans could reach $1.1 trillion by 2030, up from $671 billion today. But the region’s economies are aging at different rates. Warns McKinsey: “While most of the region is relatively young, cities in Brazil, Chile, and Cuba will be graying by 2030.”
That's a wrap for this week! Have a great weekend. Please send any news and comments to editor@impactalpha.com.
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