Month: June 2017

TriLinc’s Joan Trant Shared ESG Practices at ANDE SGB Orientation Training

Posted on by MBC Strategic

Joan Trant, Managing Partner at TriLinc Global, LLC, led a session during the Aspen Network of Development Entrepreneurs (ANDE) Orientation Training event which took place on June 13, 2017 in New York City. Joan is a member of TriLinc’s Executive Management team, serves on the company’s Investment Committee and Sustainability and Impact Committee, and is a thought leader, keynote speaker, and long-time practitioner in the impact investing industry. TriLinc Global is an impact fund sponsor whose mission is to demonstrate the role that the capital markets can play in helping solve some of the world’s pressing economic, social and environmental challenges, and it has developed a robust methodology for measuring the social, environmental, and financial performance of portfolio companies in the funds it sponsors.

ANDE’s annual Orientation provides an overview of and an introduction to investing in the small and growing business (SGB) sector to new hires in ANDE member organizations, as well as others joining the industry. TriLinc is committed to helping develop talent for the impact investing industry, and believes that collaboration with associations, academia, and peers is vital for developing talent in this rapidly developing sector. Joan’s session walked the group through TriLinc’s environmental, social, and governance (ESG) and impact evaluation process, coupled with a case study review. Specifically, Joan presented TriLinc’s approach in evaluating potential investments, beginning with its Initial Sustainability and Impact Review (ISIR) of prospective portfolio companies. Conducted simultaneously with financial analysis, the ISIR takes into account the country, industry, and company factors relating to the project under due diligence. In an ISIR, TriLinc identifies pros and cons for the project vis-à-vis the socioeconomic context of the country/region where the company is operating, and the risks and opportunities from an ESG stance. TriLinc identifies the organizations that act as watchdogs and standard setters for the industry being evaluated, and then assesses the company and its proposed business project to ensure that it meets TriLinc’s ESG as well as its financial criteria. In addition, portfolio companies in TriLinc sponsored funds must self-identify an impact metric, and TriLinc gathers baseline data and reports on the metric as well.

For the ANDE case study, session participants prepared their own analysis of ESG and impact data for a potential portfolio company, identifying the top social and environmental issues, positive and negative, that they believe the proposed project raises and/or addresses, alongside any additional information required to complete their ESG and Impact due diligence. Additionally, the participants determined what supporting materials/research they would want to review, permits/assessments they would request from the company, and any other inputs they would seek in order to obtain more clarity to fully assess the company’s ESG/impact policies, activities, opportunities, and risks. The session’s final exercise was to present findings and determine whether, based on the information provided, the participants would approve or decline financing.

ANDE was officially launched in March 2009. ANDE is a non-profit, member-driven global network of organizations that invest money and expertise to propel entrepreneurship in emerging markets. ANDE’s headquarters are in Washington D.C., and with additional full-time regional coordinators based in Brazil, Central America and Mexico, East Africa, India, and South Africa. ANDE members are located in over 150 countries around the world, with additional member-led chapters in West Africa and East and Southeast Asia.

TriLinc has been a member of ANDE since 2010 and has backed in the organization’s efforts to produce metrics which measure impact in social and environmental terms by participating in working groups, supporting research efforts, and helping disseminate findings (for example, visit our blog post, Measuring the “Impact” in Impact Investing, for commentary on ANDE’s “State of Measurement: Practice in the SGB Sector”).

Today’s session was a compelling example of how ANDE seeks to foster the growth and sustainability of SGBs across the globe – and how TriLinc and other members contribute to this effort.  As Danielle Riley from Roots and Wings noted, “The ANDE training was really educational. TriLinc’s session was especially helpful because it began with the big picture of socioeconomic and environmental challenges and investment opportunities, and then it brought the discussion to how we can address them through investments on the ground that target both returns and impact.”

To learn more about ANDE, visit their website here; to view their upcoming events, click here.

TriLinc Joins Forces with SOCAP in Good Capital Project Launch

Posted on by MBC Strategic

On June 19th New York City, the epicenter for capitalism, provided the setting for the launch of the Good Capital Project (GCP), a two-year impact investment initiative spearheaded by Social Capital Markets (SOCAP) to increase the flow of capital into purpose-driven investments. Over the past 10 years, SOCAP has built a global network of investors, entrepreneurs, and social impact leaders across sectors, all of which are united by a common goal: addressing the world’s toughest challenges through market-based solutions. SOCAP has convened over 15,000 people at its events since 2008, and hosts events year-round to continue conversations about money and meaning.

TriLinc Global is equally committed to fostering capitalism for good. As an impact fund sponsor, our goal is to advance systemic change by pursuing market rate returns alongside positive socioeconomic and environmental impact in investment strategies that attract capital at scale. Our longtime support of SOCAP’s initiatives underscores our passion for strengthening the impact investment sector to achieve these goals.

The GCP aims to develop common tools, resources, and frameworks to be used across the industry, aligning capital markets with human needs. In an interview (full text can be found here) as a part of SOCAP’s “Why Good Capital Project?” series, TriLinc’s co-founder and CEO Gloria Nelund emphasized that collaboration across sectors is critical to transforming how people think about the industry. She noted that movements that seek to change behaviors over time must be collaborative, not competitive, and that it will “take a lot of people playing a lot of different roles in different arenas” to achieve substantial changes in the impact investment industry.

SOCAP has identified several friction points in the industry which have prevented impact investing from effectively attracting mainstream capital. GCP focuses on overcoming six grand challenges that hinder the development of a robust impact investing ecosystem: creating shared understanding, identifying investable solutions, enabling the entrepreneur, streamlining impact management and metrics, creating legal structures and policies, and developing efficient distribution and product design. The June 19th kickoff event convened the industry’s thought leaders, investors, investment advisors, practitioners, academia, and forward-thinking corporations to lay the foundation for actionable change to address these challenges.

The event’s main activity, through six concurrent breakout sessions, was to map the pathway and identify key actors and the actions required for solving the six grand challenges:

1) Creating shared understanding: designing a framework for the impact investing ecosystem and developing tools to improve knowledge sharing.

2) Investable solutions: addressing the current state of the impact market and identifying which sectors are ready for market rate returns, and which areas need subsidies to catalyze the market.

3) Enabling the entrepreneur: discovering how to improve the impact landscape to enable business owners to thrive and create social impact.

4) Impact management and metrics: exploring how to streamline existing tools and metrics and creating a unified approach to impact management and measurement.

5) Legal structure and policy: discussing existing regulations and policies are in place in the impact market, and identifying which could be added or improved to enable more participants to join the market.

6) Efficient distribution and product design: exploring how existing impact pioneers have achieved market rate risk and return profiles, and studying traditional asset managers to understand their methods for creating, launching, and delivering products to consumers.

TriLinc Managing Partner Joan Trant was one of several presenters who gave a briefing to provide context for the breakout session on efficient distribution and product design. After this brief orientation, Joan and her fellow presenters acted as peer discussants in smaller groups to facilitate the framing of key questions, the answers to which will address root issues in developing and distributing impact investment products at scale.

Over the next two years, the GCP will continue to engage with actors across the impact investing sector to develop the systems needed to resolve the challenges defined in the launch event. TriLinc is committed to continuing its involvement in this initiative; please see our upcoming blogs for more insights on Joan’s breakout session and the continued evolution of these efforts.

Weekly Impact Investment Market Update: June 23, 2017

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Impact Investing & ESG

Impact Investing

Grand Challenges for Impact Investing: SOCAP’s Good Capital Project Seeks to Streamline an Unruly Field

The kickoff event explored the six “Grand Challenges” for impact investing in six concurrent breakout sessions.

 

2017 Social Progress Index

The Index includes data from 128 countries on 50 social and environmental indicators which measure social progress by a country’s performance on Basic Human Needs, Foundations of Wellbeing, and Opportunity.

 

State of the Small & Growing Business Sector 2016

This annual ANDE report contains the data on capacity development and direct investments into SGBs, and explores trands and activities in ANDE’s six most established chapters: Brazil, Central America/Mexico, East Africa, India, South Africa, and West Africa.

 

Readying an ‘Impact IPO’ on the London Stock Exchange

The Impact Investment Trust, will be one of few emerging market impact investing opportunities available to individual small investors, and seeks to raise $150 million generating 8% returns.

 

Sustainability Minded Indexers Get More Choices

As sustainable investing has joined the mainstream, more actively and passively managed mutual funds have been launched.

 

A History of Impact Investing

In this article, Investopedia provides an overview of the 3500-year history of impact investing, from its origins in Jewish law to principles and regulations implemented today. READ MORE…

ESG

Helping Investors Understand the Importance of ESG

This interview with Suzanne Fallender and Irving Gomez from Intel Corporation explores how the company has brought together sustainability and investor relations, and why this is important.

United States and Europe

Stocks Buoyed by Tech Rebound; Dudley Remarks Lift Treasury Yields

The tech sector is up 1.7 percent, pushing world stock markets up.

Emerging Markets

Emerging Markets: What Has Changed

This article summarizes changes in emerging markets ratings, and notes significant events which will affect the investing climate.

Banking the Unbanked in Emerging Markets

While 93% of the US population has access to banking, an estimated 2 billion adults do not. To address this, fintech startups are offering both online and mobile solutions, such as Oymoney and dLocal.

Africa

Experts Suggest Steps to Nigeria’s Sustainable Growth

Nigeria must promote the role of the private sector and handle the budget to help the nation move out of a recession.

Asia

Asia Firms’ Confidence at Three Year-High on Brighter Global Outlook-Thomson Reuters/INSEAD

A reading of over 50 indicators from the Thomson Reuters/INSEAD Asian Business Index shows a positive six-month outlook.

Weekly Impact Investment Market Update: June 16, 2017

Posted on by MBC Strategic

Impact Investing & ESG

Impact Investing

A Social Investment Ecosystem Emerges in Vietnam, Cambodia and Myanmar

This interview with Nguyn and Aarti Mohan discusses highlights from their report on the landscape for impact investing in 14 Asian countries.

3 Ways Millennials are Influencing Global Investing

Millennials contribute to global investment through peer-to-peer collaboration, new entrepreneurial ventures, and socially responsible impact investing.

The ’23 Fund’: A New Model for Growth Capital in the World’s Poorest Countries

This article explores a model for a fund dedicated to growth capital equity investments in the world’s 23 poorest countries.

“In the Future, All Investing will be Impact”

The symposium discussed the possibility of impact investing being woven into traditional investment firms’ existing practices.

Investing in Women: New Evidence for the Business Case

The IFC’s report shows that closing gaps between men and women in the private sector leads to business benefits and better development outcomes alike.

ESG

Why It Matters that S&P 500 Companies Report on ESG

Companies which publish sustainability reports are more likely to experience lower operating expenses, greater competitive advantage, and gives them a leg up in the marketplace for their products and services.

High ESG Performance Translates Into High Financial Performance

Chris McKnett, Managing Director of State Street Global Advisors, and Mirtha Kastrapeli, Global Head of State Street’s Center for Applied Research, discuss the benefits and challenges of implementing an ESG framework in an investment portfolio.

United States and Europe

United States

Fed Raises Rates, Maintains Forecast for One More Hike

This marks the third increase in the Federal Reserve interest rate in six months in an attempt to normalize the government’s balance sheet.

Arlene Foster Calls for ‘Sensible Brexit’

The Democratic Unionist Party leader seeks to work with Northern Ireland and the Republic of Ireland to craft a Brexit which reinstates Irish institutions and emphasizes power sharing.

Emerging Markets

New Energy Outlook 2017

Focused on the electricity system, NEO combines the expertise of over 80 market and technology specialists in 12 countries to provide a unique view of how the market will evolve.

Africa

Tanzania: Raising Agricultural Ministry’s Budget to Benefit Rural Folks

The agriculture industry provides an income for 65 percent of the Tanzanian population, so any efforts to improve the country’s living standards must seek to fight climate change and improve the economic climate for farmers.

Tanzania Central Bank Announces New Capital Rules for Banks

The new capital requirements are part of efforts to implement Basel III guidelines, which were introduced after the 2008/2009 financial crisis.

Latin America

Colombia Farc Rebels ‘Committed to Disarmament’

The United Nations Mission in Colombia says it has received 40% of the weapons registered by the Farc rebel group, a figure which falls short of the 60% they should have received by now.

Southeast Asia

India Cedes Best-Performing Emerging Market Tag to South Korea

Emerging markets have outperformed developed markets in 2017 so far, with Indian markets up 24 percent and South Korean markets up 25 percent.

 

Weekly Impact Investment Market Update: June 9, 2017

Posted on by MBC Strategic

Impact Investing & ESG:

Impact Investing

Impact Measurement: How Much Is Too Much? How Much Is Not Enough?

This article is the third installation of a three-part series exploring why ESG reporting is important, how it’s reported, and how much reporting investors should expect.

Sustainable Businesses can Unlock US$5 Trillion in New Market Value in Asia by 2030

A report entitled “Better Business, Better World Asia” was released from the Business & Sustainable Development Commission. The report breaks down Asia’s economy into four segments, and explores which development opportunities are most prevalent in each.

Fellow Travelers: Bringing Emerging Markets and Impact Investing Back Together (Part 1)

This article is the first installment of a three-part series exploring the relationship between impact investing and emerging markets. This installment deconstructs three attributes of impact investments: definitions, scope, and returns, and focuses on defining terms.

Fellow Travelers: Impact Investing in Emerging Markets is Growing but Not Fast Enough (Part 2)

This second installment focuses on the scope and returns of investing in emerging markets. Almost half of emerging market investors invest in companies in the growth stage, while developed market investors invest primarily in mature, private companies.

Fellow Travelers: Where Impact Investing in Emerging Markets Goes from Here (Part 3)

This final installment focuses on ways to integrate impact investing and emerging markets going forward. Development finance institutions should center their products around investor feedback; documentation and reporting should become standardized; and capital should be increasingly provided through debt, as in developed markets, rather than through equity.

Foreign Investors to Pour Nearly $1 Trillion into Emerging Markets in 2017: IIF

Now that the risk of trade friction between the US, Mexico, and China has decreased, foreign investment is expected to reach $970 billion, a 35 percent increase from last year.

Impact Investing Get a B+ on its Annual Report Card (Podcast)

This podcast explores how impact investing must grow and improve to keep up with global financial markets. Currently there are $114 billion in impact assets under management, which is 47% larger than the 2015 total of $77 billion, and 90% larger than the 2014 total of $60 billion.

ESG

Evan Harvey, Nasdaq: ESG Reporting – Six Reasons Why

This article explores six reasons to report ESG factors: overcoming framework and questionnaire fatigue, gaining competitive advantage, broadening investor outreach, redefining internal value metrics, boosting recruitment and retention, and true enterprise risk management.

United States and Europe

United States

Oil Settles at $45.72, Down 5.1% at 5-Week Low, after Big US Stockpile Rise

Crude stocks in the US grew 3.3 million barrels to 513 million barrels, which contradicted the prediction of a drop of 3.5 million; this caused oil prices to drop by nearly 5 percent.

Europe

UK Election 2017: Conservatives Lose Majority

Theresa May called the election to try to increase her leverage in EU discussions on Brexit; instead, her party lost seats, leading Britain into uncertainty about future negotiations.

Emerging Markets

Africa

Price of Corn, a Kenyan Staple, Soars

Drought and corruption are seen as catalysts for the spike in corn prices, which brought the staple out of reach for many working-class Kenyans.

Asia

Indonesia May See up to $200 Billion in Investment after S&P Upgrade: Minister

Indonesia may see an increase of up to $200 billion in investment after S&P Global Ratings upgraded the nation’s sovereign ratings to investment grade.

Weekly Impact Investment Market Update: June 2, 2017

Posted on by MBC Strategic

Impact Investing & ESG

Impact Investing

How the Ford Foundation Is Raising the Stakes on Impact Investing

This interview with Xavier Briggs, Ford Foundation’s VP of Economic Opportunity and Markets, discusses the foundation’s investment strategy, including its criteria for selecting impact funds in which they invest.

Sorting Out Impact Investing in a Changing Market

In this interview, Robert Webster, Managing director at Small Enterprise Assistance Funds (SEAF), discusses his perspective on impact investing, the relationship between impact and financial returns, and how his group selects SMEs in emerging markets to invest in.

Why Impact Investing Has Reached a Tipping Point

$25 trillion is invested with consideration to ESG factors; from 2014 to 2016, sustainable, responsible, and impact assets have grown by 33% in the United States. For impact investing to go mainstream, the gap between interest and execution must be bridged; in 2016, 58% of respondents indicated interest in impact investing products, while far fewer were actually investing in the products.

How Impact Investors Can Change the Status Quo for Smallholder Farmers

2.5 billion people living on less than $4 per day are dependent on smallholder farming; to remedy this, investments can be made in emerging inclusive outgrower schemes, eco-friendly commercial farms, specialized input and extension service providers, and direct-trade importer businesses.

Road Work Ahead: Smoothing the Flow of Impact Investing with Lane Markers and Turn Signals

As more investors join the market for impact investing, impact intermediaries will need to bring greater clarity to the array of services they offer.

Opportunities for Investing in Inclusive Growth

Morgan Stanley’s Institute for Sustainable Investing has created a report and an analytical tool for investors to explore different opportunities for inclusive growth investment.

ESG

Withdrawal from Paris Accord Will Spur Interest in ESG, Advisers Say

If government regulations regarding environmental responsibility are reduced, investors will have a bigger role to play in advocating for improved environmental practices.

United States and Europe

United States

Oil Slides as U.S. Climate Withdrawal Compounds Glut Concerns

The President’s withdrawal from the Paris agreement could mean that the United States’ oil production could expand more quickly than its current rate; as of the end of May, U.S. crude oil production has increased by 500,000 barrels per day (bpd) from last year’s rates, reaching 9.34 million bpd.

U.S. Department of Energy Authorizes Additional Liquefied Natural Gas Exports from an Offshore Project

Exports reaching 1.8 billion cubic feet per day of natural gas from a Louisiana natural gas terminal in the Gulf of Mexico have been approved, causing the U.S. to progress further into becoming a net exporter of natural gas.

US Adds Fewer Jobs than Expected

At 4.3% as of May, US unemployment is at its lowest since 2001; however, only 138,000 jobs were created that month, which is 40,000 less than economists had expected.

Europe

Brighter Skies over Eurozone as Growth and Employment Pick Up

Overall unemployment for the European Union is at its lowest in eight years, while economic growth was at 0.5% in the first quarter. The EU projects a total 2017 growth of 1.7%, compared to 2016’s growth of 1.8%.

 

Emerging Markets

Latin America

World Bank Planning $2 bln Green Bonds for Peru – Econ Minister

While Peru has yet to develop a reforestation industry, the IFC is preparing to do an emission of approximately $2 billion in green bonds.

Nestle Investing in Factories, Creating 2,900 Jobs in Latin America

The company looks to tackle social issues in one of its strongest markets, creating 2,900 jobs for young people and providing training for improving job-hunting skills over the next three years.

Colombia’s Peace Agreement Can Give Fillip to Inclusive Growth

The IMF projects growth to increase gradually over the next five years, with approximately 3.5% growth. This will be sustained by non-commodity exports, infrastructure spending, and improved confidence stemming from the peace agreement.

Asia

Rural India Needs Solar Power for More than Just Lighting, Study Finds

While India plans on adding 10,000 small scale solar power grids across the nation over five years, India still needs more energy to help launch new businesses, increase time spent working or studying, or make any substantial quality of life improvements.

Africa

Kenya Inaugurates Chinese-Built Railway Linking Port to Capital

The $3.2 billion railway is its biggest infrastructure project in 50 years, and was completed months ahead of schedule. The railway is part of China’s “One Belt, One Road” initiative which seeks to improve land and maritime trade routes between China and Europe, Asia, and Africa.

OPEC Oil Output Rises in May as Cut-Exempt Nigeria, Libya Pump More

Decreased output in Angola and Iraq helped OPEC adhere to its six month supply cut deal, but after sustained output increases from Libya and Nigeria OPEC will prolong its deal until March 2018.