Hello ImpactAlpha readers!

#Featured: ImpactAlpha Original

Impact investing for the rest of us. Supply is beginning to catch up with demand for impact investing products for retail investors who want to place as little as $1,000 or $2,000.

Most impact investing products have been restricted to high net worth individuals and institutional investors. But with ample evidence that smaller investors also want to drive positive impact with their investments, fund and wealth managers (and yes, robo-advisors, see #Dealflow) are creating offerings for the retail market.

Read this if you are not a zillionaire, by Jerome Tagger and Marina Leytes, on ImpactAlpha.

#Dealflow: Follow the Money

Motif offers refunds if its impact robo-advisors underperform. Motif Investing’s “impact portfolios” use automated algorithms to help retail investors align their stock market picks and their values. The three portfolios include companies leading on environmental sustainability, fair labor practices and good corporate behavior, based on ESG (environment, social, governance) data from MSCI. Motif’s research showed values matter to eight in 10 Americans making investment decisions. That doesn’t mean Motif’s clients want to take a hit on returns. To woo skeptics, Motif will refund its $9.95 per month fee if the impact portfolios underperform their benchmarks by one percent or more.

Malaysia shares savings with backers of investments that benefit marginalized communities. The government’s RM3 million ($675,000) Social Outcomes Fund is intended to catalyze impact investing in Malaysia by reimbursing investors whose investments measurably help marginalized communities. To be eligible for payouts, impact investments from philanthropic and commercial investors must generate savings for the government at least 1.5 times the size of the investment. The pay-for-success funding “is not money to be given as grants but as a reimbursement to the impact investors based on the outcomes delivered,” said the fund’s manager, Datuk Mark Rozario, CEO of Agensi Inovasi Malaysia.

Canada invests in fuel cells and biofuels to commercialize Canadian cleantech. Sustainable Development Technology Canada is investing US$7.5 million in Automotive Fuel Cell Cooperation, a joint venture between Daimler AG and Ford Motor Company to reduce the cost of fuel cells. The foundation is also making a US$9.8 million contribution to Canfor Pulp Products to demonstrate low cost biofuels. The funds come from a US$32 million package from the Canada’s Minister of Innovation, Science and Economic Development and the province of British Columbia. The gap in financing to prototype, test and demonstrate energy projects has hindered action on climate change (check out ImpactAlpha’s webinar with ARPA-E and Prime Coalition, “Bridging the Climate Innovation Gap”).

Karnataka launches “proof of concept” fund for women entrepreneurs. The state in southwestern India created Idea2POC – for proof of concept – to help female innovators prove out their concepts, get certified and pilot their manufacturing processes. The Rs 10 crore ($1.5 million) fund is part of the state’s $333 million initiative to nurture 20,000 tech, social impact and other startups by 2020.

See all of ImpactAlpha’s recent #dealflow.

#Signals: Ahead of the Curve

Leapfrog’s portfolio reached 91 million people and grew revenues and profits in 2016. Andrew Kuper, CEO of Leapfrog Investments, has taken impact investors to task for not being ambitious enough about transformative social impact for hundreds of millions or billions of people (his talk at last month’s Economist conference is worth a look). Now, Leapfrog has reported its 2016 performance. The firm says its portfolio companies provide financial tools or healthcare to 91.1 million people and support more than 100,000 jobs and livelihoods. In the face of slowing global growth, Leapfrog says its companies last year grew revenues by an average of 23 percent and profits by 43 percent. Kuper’s recipe for social impact: highly-scalable business models that attract major financial institutions. Leapfrog’s latest investments: Fincare, a financial services platform in India and GoodLife Pharmacy, an East African retail pharmacy network.

Toniic offers tool to help investors map themes to Sustainable Development Goals. Are you investing in basic goods and services, smallholder farmer finance, inclusive fintech or affordable housing? Then you're working to meet Sustainable Development Goal No. 1: End global poverty. Toniic Institute, the research arm of the global impact investor network, found broad interest in the SDG framework it developed for its 160 members. The tool, posted today, maps 11 impact investing themes, and 55 subthemes, to the 17 global goals. “The SDGs are proving to be a potent rallying point for the entire sustainability ecosystem,” said Jed Emerson, a well-known impact strategist (see, “SDGs take hold as a universal impact investment framework”). Read more on ImpactAlpha.

ImpactAssets identifies five post-election themes for U.S. impact investors. ImpactAssets convened impact investment advisors in New York City and San Francisco to explore “What are clients interested in post-election?” and “How can impact investing continue to gain momentum?” The conversation included leaders from Cornerstone Capital, Gitterman Wealth Management, Imprint Capital (Goldman Sachs), CTC/MyCFO, Rockefeller Foundation, Wetherby Asset Management, UBS, Veris Wealth Partners and others, and featured ImpactAlpha’s David Bank as a “chronicler” of the impact marketplace. Among the themes that emerged: economics trumps politics, interest in local investing is growing, and the perception of a social/financial returns “tradeoff” persists. We’ve got ImpactAssets' roundup of the takeaways at ImpactAlpha.

#2030: Long-Termism

Four scenarios for feeding (or not) 8.5 billion people in 2030. There’s nothing inevitable about how we’re going to feed the world as population grows. A World Economic Forum report plotted our possible food futures along two axes: resource-efficient vs. resource-intensive food production and interconnected global markets vs. fragmentation.

For investors and businesses, each scenario presents risks and opportunities. “A new era of business could...contribute to greater resiliency in global markets, increase the resource efficiency of business operations, and leverage technology to address social and environmental challenges in food systems,” says the report. Let’s take a look back from 2030:

Survival of the Richest: Unchecked population growth, increasing inequality and high food prices led to conflict and migration, giving rise to nationalist policies that decreased trade. Resource scarcity has intensified needs, prompting a run on land and water resources. The sluggish global economy has created clear “haves” and “have-nots".

Unchecked Consumption: Soaring demand for food and growing trade is accelerating as markets boom. Billions of middle-class consumers have adopted a high-volume, high-calorie, low-nutrition diet, driving up health costs. As the “foodprint” expands and natural resources are severely depleted, fisheries and drylands begin to collapse. Inter-connected markets and resource-intensive diets drive fast economic growth – at a high environmental cost.

Local Is the New Global: Local food has become dominant, as have sustainable products. Consumers have reduced food waste and food policies have helped make healthier diets less expensive. Supply chains have become shorter and food more plant-based, reducing environmental impact. Markets are fragmented but food is less intensive to produce. This is good for resource-rich countries but nations without robust agriculture sectors have become hunger hotspots.

Open-source Sustainability: Food is abundant, reducing dependence on a few staples. Interconnected markets and trade foster innovation but markets and communities remain susceptible to weather, economic and political shocks. New businesses and policies support sustainable choices and healthy diets. The youth take up data-driven agriculture, older farmers struggle to keep up.

Onward! Please send any news and comments to editor@impactalpha.com.