Hello ImpactAlphas! In today's brief: China's green bonds, new forest fund, raising mobility rates and a $12 trillion opportunity.
Trump's Impact Challenge
After a weekend of pageantry, puffery and protest, it’s time to deliver. Holding the Trump administration and Congress to account means more than chasing every tweet, more even than setting straight every falsehood. It means keeping track of real results and using data to correct course.
Fortunately, President Trump provided his own scorecard in his inaugural address. End disease. Harness the energy of tomorrow. Create great schools, safe neighborhoods and millions of good jobs. Rebuild our infrastructure, revive our manufacturing base and restore middle-class wealth. On Twitter, he promised health coverage “for everybody.”
Stripped of the president’s pessimism and posturing, those goals could be shared by any number of impact investors, entrepreneurs and the growing global movement of people working to build an inclusive, sustainable future.
And that means the impact community will play a key role in holding the new governing coalition to account. The impact investing community’s deep thinking and long experience in valuing social and environmental benefits is a skillset the country and the world need now more than ever. Rigorous impact accountability is the antidote to “alternative facts” on things that matter.
“We don’t chase his ghosts and his tweets,” Dave Chen, CEO of Equilibrium Capital in Portland, wrote on Facebook over the weekend. “We win by defining and getting to our goal: what we are for.” Chen’s list includes climate action, diversity and respect, opportunity and education, health care for all and global leadership. “We use our energy and innovation in context of the goals,” Chen says.
Welcome to ImpactAlpha’s new daily brief. To help the impact community rise to the new challenges, we’re ramping up and accelerating some of our most popular features. Every weekday, we’ll follow the money in #Dealflow, and give you #Signals to help you stay ahead of the curve.
And because this too shall pass, we’re going long-term to keep us all on track toward #2030. That year is the deadline for global goals still shared by nearly every country in the world. Please send your own goals, strategies, deals and, yes, performance to editor@impactalpha.com or @ImpactAlpha.
--David Bank, Editor
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#Dealflow: Follow the Money
Global green bonds more than doubled in 2016, led by China. The world’s biggest carbon-emitter raised $36.2 billion for bonds to meet its ambitious carbon reduction targets. That pushed the global value of green bonds issued last year to a record $93 billion, up 120 percent from 2015. Moody’s Investor Services said green bond issues could more than double again in 2017, to $206 billion. The Climate Bonds Initiative has a good primer on China’s green bond market.
New agriculture fund to protect forests, too. Norway has pledged $100 million to a $400 million fund to protect five million hectares of forest and peatlands by 2020. The new fund, to be managed by the Dutch manager IDH, will invest in forest-rich countries to boost the productivity of farmers while protecting forests and reducing greenhouse gas emissions. Unilever is the first corporate investor, committing $25 million over five years.
UBS to invest $5 billion to meet the 2030 Sustainable Development Goals. The big Swiss bank is looking for ways to put its clients’ wealth to work on some of the 17 global goals, including hunger, health, education, infrastructure, clean energy and climate action (UBS said peace, justice and strong institutions are less investable). Something like $5 trillion a year is needed to meet the goals. UBS will offer investments in the new Rise Fund from TPG growth and help launch Align17, a platform for SDG investment and philanthropy. Last year, UBS raised $471 million for its Oncology Impact Fund.
CEI Ventures raises $10 million to back good jobs and small businesses in Maine. The fourth fund of the venture arm of the nonprofit community development finance institution will look for investments of $250,000 to $750,000 that support jobs for low- to moderate-income Mainers. Coastal Enterprises Inc., CEI Ventures’ parent company, seeded the fund with $1.5 million, which helped bring in eight investors and 17 local and regional banks. CEI Ventures claims to have helped create 2,000 jobs through more than 50 investments in the last 20 years.
Tropical Landscapes financing in Indonesia gets boost from Convergence. ADM Capital, based in Hong Kong, will get an undisclosed amount from the investment matchmaking platform to develop its plans to boost investment in smallholder farmer livelihood, rural electricity and greenhouse gas reduction in Indonesia. Cash-generating projects in the Tropical Landscapes Financing Facility will be packaged into a Tropical Landscapes Bond in order to recycle loan capital. Last year, Convergence backed Kois Invest to develop an impact bond focused on employment opportunities for Syrian refugees.
#Signals: Ahead of the Curve
Want social mobility? Go to a state university. Cal State Los Angeles and SUNY Stonybrook had the highest “mobility rate” in a new study by the Equality of Opportunity Project. The study of 30 million college students tracked the likelihood that a student from a lower-income family ends up in a higher-income family. Pace University in New York was the rare private school with a high mobility rate; the top Ivy League school on the mobility index, M.I.T., ranks 1,288 out of 2,137 colleges. One takeaway: Low-income students fare well at elite colleges, but there are too few of them enrolled to drive broader social mobility.
New Nigerian development bank aims to fill small-business credit gap. Nigeria, with the largest economy in sub-Saharan Africa, is launching its own development bank. The Development Bank of Nigeria, conceived in 2014, is now capitalized with $1.3 billion from the World Bank, KfW, the African Development Bank and the Agence Française de Development. The bank aims to lower borrowing rates and lengthen loan tenures for small businesses and microfinance banks. Small businesses employ about 60 of the 73 million working Nigerians, yet receive only five percent of bank lending.
The Economist gathers Generation, DBL and Blackrock to gauge impact investment. Among the speakers at the magazine’s Feb. 15 conference in New York will be David Blood, Nancy Pfund and Debra Winshel. More than 200 attendees will analyze opportunities and obstacles to mainstreaming impact investment. (ImpactAlpha is a media sponsor of the Economist conference. Get 15 percent off with the code AGENTOFIMPACT15.)
#2030: Long-Termism
“Global goals hotspots” represent a $12 trillion annual opportunity. A new report, “Better Business, Better World,” identifies 60 specific opportunities, including low-income food markets, public transport in urban areas, energy storage and telehealth, that could account for 10 percent of global GDP and create 380 million new jobs by 2030. Affordable housing alone could account for 20 percent of the total. Altogether, four sectors central to the global Sustainable Development Goals – energy, cities, food and agriculture and health and well-being – offer $12 trillion in annual cost savings and revenues. It’s not just enhanced reputations: business investments in sustainable development are driven by the promise of major efficiency gains, the report says.
Onward! Please send any news and comments to editor@impactalpha.com.
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ImpactAlpha provides daily news and actionable intelligence for the growing number of people working to build an inclusive, resilient and prosperous future.
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