Author: MBC Strategic

Weekly Impact Investment Market Update: September 15, 2017

Posted on by MBC Strategic

Impact Investing & ESG

Barclays Launches an ‘Impact Investing’ Fund Seeded by Harvey McGrath in Response to Demand

Barclays has developed and launched an impact investment vehicle, seeded by Sir Harvey McGrath and designed to reflect the social conscience of the modern investor; together they believe conscience and credible returns can be compatible.

 

 

Open Daily: The Impact Data Flywheel Starts to Spin

The impact data flywheel is starting to spin. ImpactAlpha’s Operation Impact series has highlighted advances that are starting to make it possible to add “impact” (to risk and return) as a core consideration in investment decision-making. The series has explored: the new culture of transparency around impact financing and performance; higher-value, lower-cost data about the real impact of investments on customers and communities; and crisp, comparable data to drive improvements in impact management.

 

Impact Investments in India Don’t Mean Lower Returns for Investors: McKinsey

Busting the myth that impact investing means lower returns, a recent report by McKinsey shows that impact investments in India have demonstrated an ability to employ capital sustainably while meeting the financial expectations for investors. This has resulted in impact investments in India topping $1 billion for the second year in a row in 2016. The value of impact investments reached $1 billion for the first time in 2015, and surpassed that in 2016 with $1.1 billion investments.

 

 

Millennials are Driving a Shift in How the Ultra-Wealthy Manage Their Money

Family offices, which manage the money of the super rich, are focusing more on philanthropy and impact investing, according to a report out by UBS, the Switzerland-based financial services firm. Over 40% of family offices are set to ramp up allocation towards sustainable or impact investments, which seek to deliver outsized returns and remedy environmental and social ills, according to the report.

 

ESG Assets Top $164 Billion in Q2

Assets invested in environmental, social, and governance strategies topped $164 billion as of June 30; the average fund size was $562 million and there were about 290 active funds. While assets have grown nearly 20% since the end of 2015, and 60% since the end of 2012, the number of available funds has decreased from 2015’s peak of 324, and has since hovered around 300 total funds.

 

Growth, Millennial-Driven Impact Investing in New Global Family Office Report 2017

Sara Ferrari, head of global family office group at UBS, said the 2017 report showed as millennials became more involved in their family offices, they were nudging along the trend towards impact investing, with 40% of family offices saying they planned to increase their allocation in this investment class over the next year.

 

Innovations in Financing Structures for Impact Enterprises: Spotlight on Latin America

Growing interest in the financing needs of impact enterprises has given rise to meaningful experimentation in deal structuring and the emergence of some early good practices among entrepreneurs and investors. Three clear trends have emerged: a growing appetite for different forms of capital, an emerging marketplace of innovation in financing structures, and an increasing need to do more. This report was prepared to foster the flow of more capital that is adequate for early and growth-stage impact enterprises in light of these trends. The research and exploration done for the report was supplemented with direct engagement with fund managers, asset owners, and impact entrepreneurs to ensure its applicability to their work.

 

ADB Proposes New Approaches to Financing Energy Projects

Governments of cash-strapped developing nations should start exploring a range of innovative financing solutions to support the development of environment-focused infrastructure projects such as financially bankable solar installations, the Asian Development Bank (ADB) says in a new report.

 

The 2017 Best for the World Honorees

A total of 846 businesses across 52 industries from 48 countries are recognized on the full list of 2017 Best for the World honorees.

 

United States & Europe

U.S. Stocks Reach Another Milestone as S&P 500 Vaults Past 2,500

The benchmark gained 0.2 percent to 2,500.23 Friday, capping its biggest weekly advance since January, as technology shares rebounded and banks climbed with Treasury yields. Up 12 percent since January, the S&P 500 is on course for its best annual gain in four years.

 

 

Developing Economies

Nigeria Announces $5.8 Billion Deal for Record-Breaking Power Project

The 3,050-megawatt Mambila hydroelectric power project in the state of Taraba will be delivered by a consortium of Chinese state-owned construction firms. The megaproject will feature four dams between 50 and 150 meters tall, and take six years to complete, the Minister of Power, Works and Housing, Babatunde Fashola, told reporters in Abuja.

 

Are Women Entrepreneurs the Key to Global Economic Development?

Today women are as likely as men to recognize the business opportunities around them. In Africa and most of Asia, fear of business failure rates among women are equal to or less than that among men. Women consider themselves strong innovators. In developing countries in particular, the opportunities offered by women entrepreneurs help grow markets and increase employment prospects.

 

$19 Billion in Emerging-Market Debt Boils Down to the Dollar

Investors have poured $19.2 billion into local-currency emerging-market debt funds this year. That’s the fastest pace of flows since 2010, helping to drive some of the biggest returns on record.

 

Weekly Impact Investment Market Update: September 8, 2017

Posted on by MBC Strategic

Impact Investing & ESG

How Big Companies are Turning to Small Businesses to Expand Their Reach?—?and Their Impact

More and more multi-national corporations have recognized that working with local small and growing businesses?—?commercially viable ventures with five to 250 employees, and with significant potential and ambition for growth?—?can boost a corporation’s bottom line and improve the lives of people in less-developed economies. Supply chains, distribution, technology, and reaching new markets are all key areas where the corporation and small and growing businesses can benefit.

Business Reporting on the SDGs: An Analysis of the Goals and Targets

On September 21st, GRI and the UN Global Compact will launch the first outcome publication of their groundbreaking Action Platform for Business Reporting on the Sustainable Development Goals (SDGs). The publication An Analysis of the Goals and Targets, demystifies the esoteric world of sustainability disclosures for companies seeking to report their impact on the SDGs.?

ESG ETFs Help Retail Investors Track Institutional-Level Strategies

Environmental, social and governance, or ESG, investing has found a solid footing among institutional investors, but the theme is slowly trickling down to advisors and retail investors. With the emergence of ESG-related exchange traded funds, adoption could also continue to pick up pace.

A New Bond Taps Private Money for Aid Projects in War Zones

Investors might be expected to run a mile from a deal on offer in a conflict-torn part of Africa. At best, it will pay an annual return of 7%; at worst, 40% of the original investment is lost. But a dozen social investors have pooled SFr26m ($27m) to finance the world’s first “humanitarian impact bond”, issued by the International Committee of the Red Cross (ICRC). It will pay for three rehabilitation centers to be built and run in the Democratic Republic of Congo, Mali and Nigeria.

SOCAP Taps Impact-Investing Leaders to Curate “Spotlight” Sessions

Organizers have turned over a portion of the conference to guest curators to “spotlight” key questions facing the impact community. B-Lab, the nonprofit leading the B Corp movement, will bring together leaders to explore how businesses can be “systemic change agents for good.” Mission Investors Exchange, the network of impact investing foundations, will dig into how foundations can work with partners to bring more capital to bear on social and environmental problems. CultureBank, founded by Deborah Cullinan and Penelope Douglas, will explore the role of artists and cultural movements in promoting lasting change.

 

United States & Europe

Congressional Democrats Back Harvey Aid with Three-Month Debt Limit Increase

Congressional Democratic leaders on Wednesday said they would support an effort to tie government financial relief in the aftermath of Hurricane Harvey to a three-month extension of the nation’s debt limit.

Emmanuel Macron, in Greece, Calls for ‘Rebuilding’ E.U.

In an appearance filled with symbolism on his first state visit to Greece, President Emmanuel Macron of France on Thursday outlined his vision for a stronger, more united Europe from the heart of the country whose severe financial problems threatened the viability of the euro.

 

Developing Economies

Brazil Emerges from its Worst Recession

Brazil confirmed its slow exit from the country’s worst recession on record Friday with the economy nudging up 0.2 percent, the second straight quarter to show growth, the official statistics office said. The increase in GDP surprised analysts polled earlier by financial newspaper Valor who’d been expecting no movement for the second quarter of the year.

Colombia Central Bank Expected to Make Final Rate Cut of Year

Colombia’s central bank board is expected to make its seventh and final interest rate cut of the year at its meeting on Thursday, taking advantage of falling inflation to try to boost the economy.

Nigeria and South Africa Emerge from Recession?

Two of the largest economies in Africa are growing again after recessions. Nigeria’s GDP expanded by 0.55% in the second quarter of 2017 year-on-year, according to the National Bureau of Statistics, ending five consecutive quarters of contraction. Quarter-on-quarter growth for the same period was 3.23%.

How Digital Finance Could Boost Growth in Emerging Economies

Two billion individuals and 200 million micro, small, and midsize businesses in emerging economies today lack access to savings and credit. Digital finance—payments and financial services delivered via mobile phones and the Internet—could transform the lives and economic prospects of individuals, businesses, and governments across the developing world, boosting GDP and making the aspiration of financial inclusion a reality.

Latin America and the Caribbean Seek to Transform their Food Systems to Defeat Hunger and Malnutrition

FAO and PAHO have invited countries from across the region to present exemplary experiences that allowed a change in the way that food is produced, marketed, and consumed. Transforming food systems will be key to the strategy that is needed to end hunger and all forms of malnutrition in Latin America and the Caribbean, FAO and PAHO indicated today.

Weekly Impact Investment Market Update: September 1, 2017

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Impact Investing & ESG

Impact Management: How the Right Data Can Drive Performance for People and the Planet

What, who, how much, at what risk- and how does the impact compare to what would have happened anyway?

Investing in Women: Closing the Gender Capital Gap in Southeast Asia

With assets under management estimated at US $114 billion, the impact investing space has grown strongly in the recent past and plays an important role in filling the SME financing gap in emerging markets, with a range of financial instruments that can be tailored to the individual needs of women’s businesses.

 

United States & Europe

US Employment Growth Misses Forecasts for August

The US economy added 156,000 jobs in August, less than the previous month and below expectations.

 

Developing Economies

Climate Change Threatens Agricultural Trade in Pacific Rim Economies, UN Agency Warns

With global warming expected to significantly impact future yields in countries located closer to the equator, the United Nations agriculture agency is calling on Asia-Pacific economies to take a leading role in adaptation and mitigation.

US $9.5 Billion City Water Projects Open for Investment

New research from CDP, the international environmental reporting and data non-profit, today reveals that US$9.5 billion worth of city water projects are now open for investment. The cities most concerned about their water supply lie in Asia and Oceania (84%); with serious risks also identified in Africa (80%) and Latin America (75%).

Sustainable Tourism- A Tool for Development and Poverty Eradication

The United Nations General Assembly has designated 2017 as the International Year of Sustainable Tourism for Development, underscoring its power to help eradicate poverty. Tourism is also singled out in three of the 17 Sustainable Development Goals. Specifically, tourism is tied to the goals on sustainable economic growth and decent employment, sustainable production and consumption, as well as the conservation and sustainable use of oceans.

Zambia’s Economic Outlook is Now Stable- Standard and Poor’s

Rating agency Standard and Poor’s has revised Zambia’s economic outlook from negative to stable. It says Zambia’s improving growth prospects and greater liquidity in its banking system have prompted it to change its outlook on the country.

Kenya Presidential Election Cancelled by Supreme Court

Kenya’s Supreme Court has annulled the result of last month’s presidential election, citing irregularities, and ordered a new one within 60 days.

The Potential for Growth and Africa’s Informal Economy

The informal economy in sub-Saharan Africa is the second-largest in the world, after Latin America and the Caribbean. From 2010-2014, the sub-Saharan Africa’s informal economy accounted for 38 percent of GDP to the region.

Using Plastic Bags is Now Illegal- and Punishable by Jail Time- in Kenya

After trying to institute a ban several times in the past decade, Kenya officially banned the use of plastic bags on August 28, 2017.

Here’s How China is Changing Africa’s Future

China is rolling out its Belt and Road Initiative, or BRI, a project to build a new “Silk Road” that could change the meaning of globalization itself. China’s inclusion of Africa in the BRI means the continent is suddenly confronted with a whole new set of opportunities and quandaries. On the positive side, some East African governments see the influx of Chinese investment in infrastructure and manufacturing as a way to bridge infrastructure gaps and to position their countries as new logistics and manufacturing hubs that could serve not only in Africa, but also the Middle East and Europe.

Weekly Impact Investment Market Update: August 25, 2017

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Impact Investing & ESG

Investment Managers Have Found a New Way to Give Back

The popularity of companies that give back — such as Warby Parker and TOMS, which donate a pair of glasses or shoes for every pair you buy — is spreading to investments. Investment manager Infrastructure Capital Advisors, for one, is giving 10% of its revenue from sales of its exchange-traded funds towards funding an organization aimed at closing the education gap with low income youth, called Tutoring America.

These Super-Rich Families are Investing their Fortunes to Help Others

Some of world’s richest families have signed up to a pact: They will invest parts of their vast fortunes in ways that improve the lives of others. The group, which calls itself The ImPact, has plenty of billionaire street cred: It’s the brainchild of Justin Rockefeller (a great-great grandson of John D. Rockefeller) and Josh Cohen (CIO of Tyden Ventures).

Can the Good Capital Project Boos Collaboration Among Impact Investing Silos?

The Good Capital Project (GCP), a new initiative from the people who run the Social Capital Markets Conference (SOCAP), is bringing together a variety of players in the impact investing world in an attempt to create more cohesion, pinpoint what’s hindering mainstream acceptance and increase the amount of available financing.

 

United States & Europe

European Central Bank Chief Says Monetary Policy Must Stay “Very Patient”

Mario Draghi, the president of the European Central Bank, said Friday that monetary policy must remain “very patient” even as an economic recovery finally takes hold in Europe. “A significant degree of monetary accommodation is still warranted,” he said. Mr. Draghi made the remarks here at the end of a speech devoted to the longer-term prospects of developed nations. He argued that the developed world must remain committed to globalization, which he described as critical to future prosperity.

Developing Economies

Impact On Record Episode 8: Dr. Moka Part 1

In the podcast, Impact On Record interviewed Dr. Moka Lantum. Dr. Lantum is co-founder of MicroClinic Technologies, a Nairobi based company, commercializing ZiDi, Africa’s first enterprise health management solution for BoP clinics/hospitals provided as a hardware-software utility service through partnerships with both public and private institutions across Africa. As a social entrepreneur, he is committed to also create youth employment opportunities in Health IT and improve last mile access to safe affordable drugs.

Zambia in the Process of Creating Opportunities for Private Sector Participation in Infrastructure Development

Finance Minister Felix Mutati has said the Zambian government is in the process of creating financing instruments which will facilitate enhanced participation of the private sector in infrastructure development. Addressing delegates and investors at the on-going Africa Infrastructure Financing Forum in Johannesburg, South Africa, today, Mr. Mutati said one of Zambia’s top priorities was to mobilise public-private-sector investment for mega projects such as the planned Batoka Power Station between Zambia and Zimbabwe which is expected to produce 2,400 MW of hydro power and enhance developmental integration in the region.

Chinese G in ESG: Governance Tilt Yields Strong Returns

In June 2017, WisdomTree (NASDAQ:WETF) and MSCI announced that they would be adding Chinese A shares to their indexes1 in order to broaden the investable universe to include Chinese-listed firms. MSCI will be adding China A shares in June 2018, whereas WisdomTree implemented these changes to two of its emerging market Indexes on August 11, 2017. While the inclusion of locally listed firms is certainly a milestone for Chinese capital markets, listing venue may be of secondary importance in evaluating the merits of a Chinese equity index.

Emerging Stocks at Multi-Year Highs ahead of Jackson Hole Meeting

Emerging market stocks rose to multi-year highs on Friday and were set to end the week up 2.5 percent, led by gains in Poland and China, ahead of a central bankers’ meeting that is not expected to rock the boat. MSCI’s benchmark emerging markets index was up 0.36 percent in morning trade to its highest since September 2014, with gains across the board in Asia and emerging Europe. Amongst the outperformers was Poland, up 4.7 percent for the week, its biggest weekly gain since late April, and trading at more than two-year highs.

Africa in Spotlight as TED Global Returns to Tanzania

A decade after it was first held in Arusha, TED Global returns to Africa next week to highlight Africa’s rich intellectual, artistic and problem-solving culture. It will also examine some of the key challenges the continent is facing and bring together some of the great minds finding ways to solve them. The  theme for the four-day event is “Builders. Truth-Tellers. Catalysts.”

Weekly Impact Investment Market Update: August 18, 2017

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Impact Investing & ESG

Socially-Responsible Investing: Earn Better Returns from Good Companies

Sustainable investing is an opportunity to make money and make a difference in the world. Many people still feel like they have to choose between their money and their values. They still think about the way sustainable investing used to be, and they could be missing out on some terrific new opportunities in this space. New environmental, social and governance (ESG) ratings for mutual funds give investors far more funds to choose from.

The State of Blended Finance

This working paper has been jointly produced by the Blended Finance Breakthrough Taskforce (BFBT) convened by the Business & Sustainable Development Commission, and Convergence. The State of Blended Finance aims to expand the evidence-base around the potential of blended finance to help close the UN Sustainable Development Goals (SDG) funding gap by summarizing blended finance deal trends and identifying ongoing blended finance-related efforts of key actors in the space. This report will inform the recommendations the BFBT intends to deliver to unlock systemic barriers in the blended finance ecosystem that are currently preventing the flow of mainstream capital into blended finance transactions at scale.

Which of the 17 U.N. Global Goals do Impact Investors Prefer

Goals as a guide to impact and opportunity. Yet little is known about which of the goals are getting the most attention. A new report from InvestorFlow, the fast-growing impact investor network, sheds some light on the question. The report, “Who, What, Where, and How: The First 205 Investors,” provides a snapshot of InvestorFlow members (which now number 212) and includes an analysis of their preferences among the U.N. goals.

United States & Europe

U.S. Employment Jumps by 209,000 Jobs in July, More than Expected

A closely watched report released by the Labor Department on Friday showed employment in the U.S. jumped by much more than anticipated in the month of July. The report said non-farm payroll employment surged up by 209,000 jobs in July after spiking by an upwardly revised 231,000 jobs in June.

Developing Economies

Tanzania: U.S., Tanzania Sign U.S.$225 Million Grant

The governments of United States and Tanzania on Friday signed a grant agreement of $225 million for implementation of various projects in education, health, agriculture and good governance. The agreement comes just a day after the US announced its plan to extend funding support in the next year for implementing various development projects in the country.

Gates Foundation to Spend over $300 Million in Tanzania in 2017

Bill Gates has told Reuters his foundation plans to spend more than $300 million in Tanzania this year on public health and poverty reduction programs. In an interview, the billionaire said aid was now being spent “in a smarter way” in some parts of the world.

Breaking the Code: How Women in Nigeria are Changing the Face of Tech

The Nigerian tech scene is booming. Last year, Lagos-based startup Andela received $24m (£18.5m) in funding from Mark Zuckerberg. In 2015, financial technology startup Paystack – one of the first Nigerian tech companies to be accepted into renowned California-based startup accelerator Y Combinator – secured approximately $1.3m in seed investment from international investors.

The Long Game: How Developing Countries can get Microfinance Right

Microfinance is often cited as an essential tool in helping women in particular rise from poverty. The theory goes that when you empower women to grow their businesses, they’re able to secure their families’ finances and create pathways toward education and improved quality of life for their children.

How to Decarbonize Indonesia and Achieve Low-Carbon Prosperity

Indonesia stands at a crossroads. It is the fourth-largest country in the world, with a population approaching that of the United States and a per-capita GDP nearly as large as China’s.  Like many countries in Southeast Asia, Indonesia is developing rapidly.  The manner in which Indonesia chooses to develop will have consequences for hundreds of millions of Indonesians as well as the developing countries of Southeast Asia and Africa that look to Indonesia as a model.

 

Weekly Impact Investment Market Update: August 11, 2017

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Impact Investing & ESG

What Millennial Investors Want: Convenience, Control and a Conscience

With their habit of viewing life through a smartphone, millennials have already disrupted industries like retail, the media and transportation. Now they’re driving shifts in investment markets with a wave of new technologies and products that cater to their demands. This next generation of investors wants sophisticated platforms that are powerful and convenient — and make the world a better place.

Millennials Drive Growth in Sustainable Investing

More investors are interested in sustainable investing and adopting its principles as part of their strategy, but Millennials are leading the charge, according to the Institute for Sustainable Investing’s 2017 “Sustainable Signals” report. As with the previous report in 2015, this latest survey of 1,000 total active individual investors tracked both how investors perceive sustainable investing and whether they are acting on that interest.

Lean Data: The “How” of Measuring Impact at Lower Cost for Higher Value

According to an annual survey of impact investors, unsophisticated measurement practice is one of the five biggest constraints to growing the impact investing market. With so many frameworks out there, why aren’t we making more progress?

Smallholder Farmers are Investable

Inclusive agriculture is defined as agricultural markets and value chains that are inclusive of the world’s half-billion smallholder farmers. Such models link these farmers with larger economic actors, ultimately improving agricultural productivity, expanding markets and trade, and increasing the economic resilience of vulnerable rural communities. A recent review by the Initiative for Smallholder Finance (ISF) of investments in smallholder agriculture shows a maturing market with clear investment opportunities at different stages of the agricultural value chain and varying stages of financing.

The $500 Million Blue Haven Initiative, Unplugged (Podcast)

The Blue Haven Initiative was one of the earliest family offices to commit itself to 100% mission-aligned investing. At more than $500 million, it’s one of the biggest to make that commitment. And it’s one of the first to share its challenges publicly.

Is Socially Responsible Value Investing the Future?

We can peer into the future value investing landscape by examining the performance returns in funds like Generation Investment Management and understanding the demand for socially responsible investments (SRI) from investors. Generation has delivered long term returns to support its thesis that value investing with a sustainability overlay can match traditional value investing performance returns. And the recent launch by leading robo-advisor, Betterment, of SRI portfolios may be a sign of increasing investor demand for investments that have a social-good overlay.

ESG

In ESG We Trust – The Risk and Rewards of ESG Investing

According to the Bank of America Corporation, ESG investing has grown by more than 97 percent globally in the past 20 years. In a dollar value, the number has gone from tens of billions to hundreds of trillions, and the number of investment funds has increased from 10s to 1000s.

Gender and ESG – “More Women” Means “More Money”

In this interview, Niklas Ekvall of AP4 and Richard Gröttheim of AP Fonden 7 discuss how gender diversity can positively affect ESG integration and performance.

 

United States & Europe

US Economic Expansion to Last Another Two Years or More: Reuters Poll

The U.S. economic expansion will last at least another two years, according to a majority of economists polled by Reuters who also forecast growth will not accelerate the way the Trump administration has predicted. The recovery from the devastating 2007-2009 financial crisis has been unusually lengthy. The latest growth stretch has already lasted 96 months, and if the poll predictions come true it would mark the longest economic expansion in more than 150 years.

Developing Economies

$515 Billion in Foreign Investment Expected for Developing Asia in 2017

Developing Asia is expected to witness a 15 percent increase in foreign direct investment (FDI) inflows in 2017, following a dramatic 22 percent drop in such inflows in 2016, according to the World Investment Report 2017, published by the United Nations Conference on Trade and Development (UNCTAD).

 

Weekly Impact Investment Market Update: August 4, 2017

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Impact Investing & ESG

Toniic Podcasts with Impact Investors

There are exploitative elements of capitalism, as well as innovative and regenerative elements. In this podcast, Thomas Van Dyck of the SRI Wealth Management Group details how he taps into the latter as he navigates the often grey areas of impact evaluation and engages with clients, shareholders, and other stakeholders in aligning their values with their investment decisions.

The Millennial Marketplace and the Propagation of the Triple Bottom Line

Backed by an impressive $2.45 trillion in spending power, millennials now represent the world’s most important consumer category. Companies are paying attention, and they’ve gathered an impressive amount of data on millennial buying behavior. They’re acutely aware that the majority of millennial consumers — roughly 70% — will spend more on brands that support a cause they care about.

Culture of Transparency: Putting Impact Investing on the Map

The impact investing field has grown leaps and bounds since the Global Impact Investment Network first started tracking the growth of the field in 2010. Networks like Toniic and The ImPact have brought together a range of interested investors who want to learn more about allocating for impact. Even dedicated impact funds are attracting LPs with diverse motivations. To truly scale impact investing, we need to continue to engage in discourse around the challenges and solutions we are encountering in our everyday work.

OpenInvest Launches First Impact Investing Category to End Human Trafficking

OpenInvest, an impact investing platform empowering individuals to drive social change with their dollars, today announced the launch of the first impact investing category that works to end forced labor and human trafficking. Using data and analysis provided by JUST Capital, a nonprofit organization that measures companies against the priorities of the American people, 20 publicly traded companies were identified that have demonstrated the highest commitments to fighting forced labor in their supply chains, among other human rights abuses.

J.P. Morgan will Facilitate $200 Billion in Clean-Energy Financing by 2025

The bank is making what it calls “the largest commitment by a global financial institution” to facilitating clean energy financing. That bank did about $15 billion in such deals in 2015, including green bonds, tax-equity financings, project financing and even IPOs; the new pledge would boost that to about $22 billion a year.

ESG: the New ABCs of Portfolio Management?

Environment, social, and governance (ESG) factors provide an analysis framework for deep-dives into three pillars: Environmental, Social and Governance. These factors may have a material impact on the financial performance of the company. Unlike Socially Responsible Investment (SRI), ESG does not necessarily involve the exclusion of some sectors, such as weapons, tobacco, gambling, alcohol and animal testing. Instead, it offers a framework to analyse an investment opportunity from a different forward-facing perspective.

 

United States & Europe

US Economy Creates 209,000 Jobs in July

The unemployment rate edged lower to 4.3%, matching May’s figure which was the lowest since 2001. Employment in food services and drinking places rose 53,000 – that sector has now added 313,000 jobs since July 2016. Employment in health care and professional and business services also saw strong growth.

Developing Economies

Zambia’s Rural Homes to be Equipped with Pay-To-Own Solar Home Systems Expected to Help Eliminate Use of Candles

Energy and financial services firm Fenix International is working to deploy pay-to-own solar home systems in Zambia leveraging telecommunications giant MTN’s mobile money platform. In partnership with the Swedish Embassy in Zambia, which committed nearly $3-million to the project up to 2020, Fenix is taking its first step in expanding its flagship product, ReadyPay Power, across Africa, after successful deployment in Uganda.

Uganda: Tanzania, Uganda Sign Rural Electricity Deal

Tanzania and Uganda have signed yet another Memorandum of Understanding (MoU) for the supply of electricity to villages along the Uganda-Tanzania border. The signing ceremony which was held in Bukoba, Kagera Region at the weekend, comes just four days before President John Magufuli and his Ugandan counterpart, Yoweri Museveni, lay a foundation stone for the construction of the East African crude oil pipeline from Hoima in Uganda to Tanga Port in Tanzania.

26-Year-Old Founder Wants to Change Payments in Africa

26-year-old Nigerian entrepreneur Iyinoluwa Aboyeji wants Silicon Valley to fund a future where Africa is included. Aboyeji is the cofounder of Flutterwave, a payments API that makes it easier for banks and businesses to process payments across Africa. The service allows consumers to pay for things in their local currency; Flutterwave takes care of integrating banks and payment-service providers into its platform so businesses don’t have to take on the expense and burden.

PERU: Economy to Grow More than 4% in 2018 – Kuczynski

The Peruvian economy will grow at a rate of more than 4% next year, returning to the path economic dynamism, despite the natural disasters caused by the El Niño climate phenomenon and corporate corruption investigations, said the South American country’s president Pedro Pablo Kuczynski in a speech.

UN Latin America Commission Forecasts Low but Positive Growth for Region in 2017

The Economic Survey of Latin America and the Caribbean 2017 foresees that, after two years of contraction, nearly all countries in the region will experience, on average, 1.1 per cent positive growth rates in 2017 – except for Venezuela, whose gross domestic product (GDP) is seen falling -7.2 per cent; and Saint Lucia and Suriname, which is forecast to contract -0.2 per cent.

Emerging Markets AUM from 0.4T to $11.2T in 25 Years

The scale of the growth in emerging markets over the past quarter-century has been outstanding. During this period there has been close to 30 fold increase in US dollar emerging market equity capitalization from $0.4 trillion in January 1992 to around $11.9 trillion today, according to research from Credit Suisse.

Weekly Impact Investment Market Update: July 28, 2017

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Impact Investing & ESG

Why Impact Investing Needs to Go Mainstream

In a conversation with Knowledge@Wharton and Nick Ashburn, Durreen Shahnaz says that of all social impact areas, women’s livelihood is one of the toughest and most important issues. “If you don’t have one half of the equation there, how do we move forward?” READ MORE…

U.S. Impact Investing Alliance Launches to Scale the Practice of Impact Investing

The U.S. Impact Investing Alliance (“Alliance”) today announced the launch of its expanded network of impact investing leaders dedicated to advancing this growing market. The Alliance is introduced today with a broadened mandate that includes advocating for a favorable policy environment, catalyzing the flow of impact capital and growing the movement of impact investing in the U.S. and globally. READ MORE…

Unlocking Blended Finance for the 2030 Global Goals

Private capital can indeed deliver public goods. We need much, much more capital from individual, institutional and other commercial investors to fill the estimated $2.5 trillion annual gap in financing for sustainable development. The good news: we increasingly know the blends that can attract it. READ MORE…

“Clients Seek Investments with Environmental, Social Value”

Currently, Switzerland’s UBS is committed to making $1 billion a year in social and environmental impact investments over five years, an annual percentage that amounts to less than 0.6% of its capital under management and about 3% over the entire period. READ MORE…

On the ESG Horizon: Achieving a Global Standard

ESG integration was once a topic left to the public relations department of the average organization. Now that institutional investors are seeing how responsible integration positively affects a company’s valuation, talks of mandatory government regulation around the world are increasing. READ MORE…

An Insider Explains Why Wall Street’s Big Money Focus on Sustainability is Here to Stay

A recent survey of 320+ institutional investors found broad support for ESG-related themes, with 80% of respondents stating that companies have not considered environmental and social issues as core to their business and that generating sustainable returns over time requires a sharper focus on ESG issues. READ MORE…

United States & Europe

US Second-Quarter-Growth Accelerates to 2.6%

The US economy gathered speed in the second quarter of the year, growing at an annualised pace of 2.6%. The pick-up was helped by consumer spending in the quarter expanding at a pace of 2.8%, and businesses stepping up spending on equipment. READ MORE…

Developing Economies

OPEC Moves to Cap Nigerian Oil Output, Boost Compliance

OPEC moved on Monday to cap Nigerian oil output and called on several members to boost compliance with production cuts to help clear excessive global stocks and support flagging prices. READ MORE…

Fed Balance Sheet Plan May Equal Three Rate Hikes for Emerging Markets: IIF

The U.S. Federal Reserve’s plan to reduce its $4.5 trillion balance sheet could exert the same squeeze on emerging markets next year as three interest rate hikes, an Institute of International Finance (IIF) study shows. It said it also has the potential to reduce stock and bond flows by as much as $25 billion. READ MORE…

IMF World Economic Outlook, April 2017: Gaining Momentum?

This most recent installment of IMF’s World Economic Outlook stresses the need for credible strategies in advanced economies and emerging market and developing ones to tackle a number of common challenges in an integrated global economy. READ MORE…

Emerging Markets: What Has Changed Ahead of July 23, 2017

This report summarizes Emerging Market trends, specifically in Turkey, South Korea, South Africa, Brazil, and Mexico. READ MORE…

Copper Trumps Politics as Investors Take Shine to Zambian Assets

The yield on Zambia’s $1 billion Eurobonds due April 2024 have fallen 135 basis points this year to 7.55 percent on Wednesday. The southern African nation’s currency has appreciated 12 percent against the dollar in 2017, making the kwacha the continent’s best performer after Mozambique’s metical. Copper prices are at their highest in more than two years. READ MORE…

Weekly Impact Investment Market Update: July 21, 2017

Posted on by MBC Strategic

Impact Investing & ESG

Deadline 2030: Less than 5,000 Days (and Counting) to Meet Global Goals

The so-called “private sector” was the star of the High-Level Political Forum, a two-week session in which countries and agencies are to take stock of the progress toward the 2030 goals. A main challenge is to see the “financing gaps” as “investment opportunities,” as sustainable-development-is-good-business takes hold as conventional wisdom.

What We Know about Bain Capital’s $390 Million Double Impact Fund

The tipoff that impact investing is indeed reaching a new stage in the capital markets came when Deval Patrick described the $390 million Bain Capital Double Impact Fund as “a small first fund.”

Japan’s ‘Social Impact Bond’ Gets First Batch of Investors

Japanese lender Sumitomo Mitsui Banking Corporation and other investors are set to invest some 30 million yen ($267,714) in a new program that will see private investments help fund public social services. The core unit of Sumitomo Mitsui Financial Group will team up with Japan Social Impact Investment Foundation (SIIF), which launched this month Japan’s first “social impact bond” to fund a Kobe city program on chronic kidney disease.

 

ESG

Morningstar Partners to Drive Adviser ESG Integration

Morningstar is working with a global financial services industry body to better prepare financial advisers for incorporating sustainable investing into advice practices. Collaborating with the US-based Money Management Institute, the program focuses on the incorporation of ESG factors into investment portfolios and their impact.

 

Want More Millennial and Female Clients? Tout ESG Funds

“Female advisors are more likely to express interest in ‘responsible’ investing strategies than their male counterparts,” a report from Eaton Vance’s second quarter Advisor Top-of-Mind Index stated. “Forty-six percent say responsible investing is an important part of their practice, compared with 38 percent of male advisors, while 44 percent expect to increase their responsible investing recommendations in 2017, compared with 35 percent of male advisors.”

 

United States & Europe

Here’s a Really Good Sign the Economy is Rebounding

Residential construction rebounded from a three month decline in June with housing starts increasing to 1.22 million, according to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. The number of housing projects started last month shows an 8.3% increase from the May figures and a 2.1% increase from June of last year.

Eurozone Businesses Growing at Fastest Rate in Nearly Six Years

IHS Markit’s Flash Composite Purchasing Managers’ Index – seen as a good guide to growth – climbed to 56.7 from February’s 56.0, its highest reading since April 2011. Anything above 50 indicates growth.

 

Developing Economies

Mexico Launches Pioneering Scheme to Insure its Coral Reef

A stretch of coral reef off Mexico is the testing ground for a new idea that could protect fragile environments around the world: insurance. The reef, off the coast of Cancún, is the first to be protected under an insurance scheme by which the premiums will be paid by local hotels and government, and money to pay for the repair of the reef will be released if a storm strikes.

Don’t Sleep On Chile as an Emerging Market Play

When it comes to Latin America investing destinations, Chile often goes overlooked relative to Brazil and Mexico, the region’s two largest economies, but that should not take away from opportunity with the iShares MSCI Chile Capped ETF (NYSEArca:ECH). Up nearly 22% year-to-date, ECH is one of this year’s best-performing emerging markets single-country ETFs. This year, ECH is easily outperforming its Brazil, Colombia and Peru counterparts as Chilean stocks work their way toward record highs.

Brazil Government Assures Graft Probe Will Continue

Brazil’s justice minister and the top prosecutor both insisted Wednesday that the corruption probe they’ve led against their country’s top politicians will continue in full force, even after ensnaring President Michel Temer. Justice Minister Torquato Jardim says the investigation, dubbed Operation Car Wash, is a win for Brazilians.

EU, Brazil Propose Farm Subsidies Overhaul to Help Developing Countries

The two agriculture powers submitted the proposal, which would exempt the least developed countries from subsidy limits, in the run-up to a WTO meeting in Buenos Aires in December. The EU and Brazil are two of the world’s biggest producers of agricultural products.

Scaling Up Financing for Smallholder Farmers

Last year, the 11 social lenders, including Root Capital, Alterfin and responsAbility, collectively deployed $682 million, up 9% from the year earlier, to 765 agribusinesses in Latin America, sub-Saharan Africa and Asia.

Strong Export Demand to Lift Asian Economies: ADB

Surging global demand for Asian exports and low oil prices will help China and the region’s developing economies grow faster than expected this year and next, the Asian Development Bank said. The region should now grow by 5.9 per cent this year and 5.8 per cent in 2018.

Weekly Impact Investment Market Update: July 14, 2017

Posted on by MBC Strategic

Impact & ESG

Impact Investing Market Worth 307 Billion USD by 2020

The impact investing market is expected to grow from an estimated value of $135 billion in 2015 to $307 billion by 2020, at a CAGR of 17.86% from 2015 to 2020. The global market is set to witness a significant growth due to increase in demand for impact capital, growing ecosystem support and impact readiness.

And the GSG Honors Go to… A Year of Growth in Impact Investing

At the Global Impact Investing Steering Group (GSG) Impact Investing Summit, Sir Ronald Cohen, British venture capitalist and chair of the GSG, predicted a 2020 tipping point. At that time, even legacy investors will have added “impact” to risk and reward as a core component of financial decision-making.

Ford Foundation’s Darren Walker Takes on Opponents of Impact Investing – Including His Own Trustees

Walker earlier this year carved out $1 billion (over 10 years) out of Ford’s $12 billion endowment for mission-related investments, or MRIs. At the GSG Impact Summit in Chicago, he shared some of the story of a journey he said ‘has been very challenging and uncomfortable for my trustees and my investment committee…who are very conservative.”

Christian Super Charts a Course for Institutional Impact Investing

Christian Super is not stopping with its 10% allocation to impact investments, which is already impressive for an institutional investor. To the more than AU$100 million out of its $1.3 billion portfolio, the Australian pension fund has committed another $50 million.

Impact Investment to Close the SDG Funding Gap

The United Nations Conference on Trade and Development (UNCTAD) says achieving the Sustainable Development Goals (SDGs) will take between US$5 to $7 trillion, with an investment gap in developing countries of about $2.5 trillion. Under the new Development Agenda, it is the actual governments that hold a significant share of the resources needed to achieve the SDGs. The World Bank estimated that between 50 and 80 percent of what’s required will come from domestic resources.

UBS Raises $325 Million for Bono-Backed Impact Investment Fund

The Rise Fund, which counts Irish rock star Bono among its co-founders, aims to achieve “measurable, positive social and environmental outcomes alongside competitive financial returns”, UBS said in a statement on Monday.

Blueprint for Women’s Funds

This is a guide for organizations and individuals actively seeking to create gender equitable social change. In particular, it equips women’s funds to design strategies that use systems of finance and investments as tools to create the social change they seek.

Opinion: Investment in Agriculture is at the Heart of Sustainable Development Success

The agricultural sector alone accounts for 70 percent of water use. It often becomes a casualty of climate change, but is also emits significant greenhouse gases. It employs millions of women — who, if given access to the same resources as men, could feed an extra 150 million people in the world. Innovations in agriculture can help us make great strides on many goals.

From the Sidelines to Center Court – ESG and the Value Play

As the global industry increasingly becomes aware of how ESG integration affects the valuation of organizations, there becomes an increased need for a strategist to help maximize the valuation of a company. Specifically, an organization can look to see how ESG integration affects other particular issues like gender parity or climate change. The job of an ESG integration strategist evolves to help determine how other concepts can be incorporated as a positive practice in combination with ESG integration.

 

US & Europe

US Giving $638m Aid to Yemen, Somalia, Nigeria, South Sudan

The United States announced more than $630 million in aid for Yemen, Somalia, South Sudan and Nigeria, where conflict has helped to cause what the United Nations calls the world’s largest humanitarian crisis in more than 70 years.

 

Developing Economies

Executive Summary – Innovations in Financing Structures for Impact Enterprises: Spotlight on Latin America

Commissioned by the Multilateral Investment Fund with support from the Rockefeller Foundation, this summary of Transform Finance’s upcoming report provides an overview of the specific problems with traditional financing structures, the innovations happening now in investment funds and deal structures to alleviate the capital gap, and recommendations for how fund managers, investors, and entrepreneurs can engage with these alternatives to increase their impact.

Views from the Field: Argentina

For investors who have endured nearly two decades of hardship in Argentina, new developments in one of Latin America’s largest economies point to better days ahead. This report explores economic and political shifts through statements from 3 high profile professionals in the nation.

Impact Investment Exchange: Building a Social Capital Market in Asia

In 2009, Durreen Shahnaz launched the Impact Investment Exchange, or IIX, with a vision of building a more inclusive financial system though impact investing. Since then, IIX has established the world’s first social stock exchange, Asia’s largest equity crowd-funding platform for impact investing, and, recently, the world’s first listed bond with a focus on both social and financial returns, the $8 million Women’s Livelihood Bond.