Impact Investing: Growth and Measuring Impact: Weekly Review 11/17 – 11/21

There has been promising growth in the impact investing space recently, and investors and academics alike are looking for better and easier ways to measure impact. The articles and reports below highlight recent activity.

US Sustainable, Responsible and Impact Investing Assets Grow 76 Percent in Two Years Press Release on The Forum for Sustainable and Responsible Investment

According to US SIF – The Forum for Sustainable and Responsible Investment’s latest survey, sustainable, responsible, and impact investing (SRI) assets have expanded 76% from $3.74 trillion at the start of 2012 to $6.57 trillion at the start of 2014. These findings demonstrate that “sustainable investment strategies are being applied across asset classes to promote corporate social responsibility, build long-term value for companies and their stakeholders, and foster businesses that will yield community and environmental benefits,” said Lisa Woll, CEO of US SIF.

The survey highlights emerging trends in the investment space and explains the growth, citing the expansion of the investment funds offered by money managers that incorporate environmental, social, and governance (ESG) factors into investment decision-making and larger pool of assets to which institutional owner apply ESG criteria as the major contributing factors.

Can Impact Investing Help Save the Planet? By Dan Winterson, Eric Hallstein & Camilla Seth on SSIR

It is no secret that the world needs more capital and new innovative models for sustainable economies to address the growing demand for food, water, and fuel. A new cross-sector investigative study, “Investing in Conservation: A Landscape Assessment of an Emerging Market” examines whether impact investing can make a difference in global conservation efforts. The report examines three areas of conservation investing: sustainable food and fiber production, habitat conversation, and water conservation. It includes data from a survey covering more than 1,300 transactions between 2004 and 2013.

The key findings include:

  • $23.4 billion of investments in global conservation opportunities were made from 2009 through 2013
  • The conservation impact investment market is nascent but expanding quickly across investment stage, type, sector, and region
  • Case studies revealed rapid business model innovation
  • Investors reported a variety of challenges consistent with an immature market

In short, the report reveals that conservation impact investing is real and growing rapidly, providing a potential path for attracting capital at the scale of the problems we face.

Curbing the “Impact Impostors”: The growing movement toward transparency in impact investing by William Burckart on NextBillion

Impact investing’s rising popularity has created some debate. As demand for a social component has grown among investors, some standard equity investments are inappropriately branded with an impact label. With the recent growth of impact investing activities, it can be difficult to detect these “impact imposters”. Some leading systems are growing in popularity that are designed to measure impact, including Global Reporting Initiative (GRI), Impact Reporting and Investment Standards (IRIS), and Global Impact Investing Rather System (GIIRS). The creation of these systems is part of a greater move towards greater transparency in the space. The benefit of the effort will increase the usefulness of information available to investors and improve corporate performance on the ESG issues most likely to impact value. Of course, impact is in the eye of the beholder, but these metrics will be useful for institutionalizing impact.

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Mobile for Development: Weekly Review 11/10 – 11/14

Mobile money and mobile banking have created a revolution in financial services for the unbanked population, but the potential for mobile technology doesn’t end there. Below are recent articles highlighting how mobile technology can be leveraged to create innovative solutions aimed towards the development of emerging markets.

Mobile for Smart Solutions: How Mobile can Improve Energy Access in Sub-Saharan Africa by Helene Smertnik on GSMA

A new report released by GSMA explores the opportunity for mobile operators to partner with energy service providers to deploy smart solutions to improve energy access in Sub-Saharan Africa. The report offers recommendations for the industry’s key players, energy providers, mobile operators, and investors to enter the space. These recommendations include:

  • Mobile operators should develop suites of enabling services targeted at utilities and energy service companies to support their smart solution deployments in both urban and rural markets (on and off-grid). Operators should also work with energy providers to clarify the business case for the deployment of these smart solutions by supporting pilots that focus on commercial viability.
  • Utilities and energy service companies (ESCOs) should work to quantify the benefits that mobile technology and smart solutions can offer their business models.
  • Although smart solutions can provide significant benefits to ESCOs, they are hesitant to raise or invest the capital required to trial these solutions at scale because the commercial model is unproven. Investors should step in to support early stage trials.

A rugged mobile wifi device brings the web to schools in Africa and beyond by Karen Eng on TEDBlog

BRCK, the newest addition to our portfolio, developed a rugged, rechargeable, mobile wife device aimed to bring connectivity to people in developing countries with unreliable infrastructure. Since the official launch this past July, BRCK has manufactured and shipped more than 1,000 units to 45 countries.

Today, the team is focusing on community action, looking for new ways to apply their technology. The company is working with organizations in the education and health spaces, extending connectivity to support their work. BRCK is no longer hardware itself; it is now recognized for the constructive value it can add to communities, like enabling access to information in schools and health clinics. BRCK aims to make a real impact, where real opportunities exist. “We realized that what we’d created for general-purpose connectivity in emerging markets was actually something in great demand in schools throughout Africa,” said Juliana Rotich, founding member of Ushahidi, “If we focus on nothing else but education, many other challenges in the world will be resolved.”

A Water Project Cleans Up Nairobi’s Slum by Elijah Wolfson on Newsweek

The Soweto Slums of Nairobi, Kenya, home to between 100,000 and 200,000 residents, is less than one square mile in size, making the area four to eight times as dense as New York City. As if the living conditions aren’t bleak enough, when the slums were formed in the 1980s and 1990s, the city didn’t connect them to water.

Today, Patrick Mwangi, a World Bank water and sanitation specialist, is the driving force behind the Soweto water-development project, launched earlier this year. The project, developed with the input of the World Bank’s Africa Region team, aims to provide water security to the residents of the slum by bringing water taps into each home so that families will no longer have to buy overpriced water or drink from contaminated sources.

The key component in the success of this project is the Jisomee Mita (“Read Your Meter” in Swahili), a tool that uses SMS technology to allow residents of Soweto to pay for the water provided by their taps. Each in-home tap will have a meter that reads their water usage. The users will be able to text the readings from their meters to a 4-digit number and within minutes their bill will be texted back. They can then use M-Pesa to send a payment. This mobile technology gives Soweto residents the ability to pay at any time, a huge benefit to the many that make their living in an informal sector without regular billing cycles.

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Clean Energy Access: Weekly Review 11/3 – 11/7

Last week, we addressed global energy access, looking at innovative solutions to solve energy poverty in emerging markets. However, the energy discussion cannot end there. Another major issue the world is facing is rapid climate change and the greenhouse gas emissions contributing to it. Neither energy poverty nor climate change can be addressed alone. The articles below highlight how the international community is coming to the realization that clean energy solutions have the potential to electrify the billions in the dark and remain carbon neutral, but there is still a long way to go.

Renewables Now Cheaper Than Fossil Fuels in Developing Countries by Silvio Marcacci on The Energy Collective

This week, Bloomberg New Energy Finance (BNEF) released Climatescope, a report suggesting renewable technologies can be just as cost-competitive in emerging countries as they are in richer nations. The study offers a picture of clean energy in 55 emerging markets across Africa, Asia, Latin America and the Caribbean, providing a country-by-country assessment.

The study shows that clean energy capacity in the surveyed nations grew 143% between 2008 and 2014 to a total of 142 GW. The report analyzes the market for conditions for clean energy in developing nations, including enabling framework, clean energy investment and climate financing, low-carbon business value chains, and emission management. BNEF found that conditions that once favored fossil fuels now boost renewables.

Slow climate change or end energy poverty? Let’s do both. By Kara Goolman and Megan Nicholson, Center for Clean Energy Innovation

The UN’s Sustainable Development Goals (SDGs) aim to address two energy-related challenges: energy access and global climate change. Unfortunately, these proposed SDGs fall short in two ways: defining modern energy access and disincentivizing energy innovation,.  These measures are necessary to advance meaningful solutions to cut carbon and eliminate energy poverty.

Before tangible targets can be set to meeting the goal of “modern energy access for all”, “modern energy access” must be defined. The International Energy Agency measures modern energy access as 100 kWh per person per year, yet that amount of energy is less than it takes to keep one 60-watt light bulb lit for a year (500 kWh) according to a report by the Center for Clean Energy Innovation. If the international community creates goals based on achieving the 100 kWh standard of energy access, we will fall severely short of truly alleviating energy poverty. In order to ensure that a higher energy access target is affordable, reliable, and low-carbon, energy innovation will be critical.

Global Clean Energy Investment Grows 11% by Joshua S Hill on Cleantechnica

Global clean energy investment jumped by 11% in Q3 2014 compared to last year’s figures, reaching $64 billion according to the Clean Energy Pipeline.  An analysis by Bloomberg New Energy Finance had a slightly less bullish analysis, recording $55 billion in investment over the same period, still, up 12% from the $48.9 billion reported to have been achieved in Q3 2013. Regardless of whose reporting you rely on, it appears that the global clean energy investment sector is finding its feet. The real challenge will be to sustain this growth and health investment in the sector.

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