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Weekly Impact Investment Market Update: July 7, 2017

Posted on by MBC Strategic

Impact Investing & ESG

Impact Investing

Steering Impact Investing Toward a 2020 Tipping Point

On the heels of the G20 meeting in Hamburg will come a summit of the Impact 16 in Chicago. 16 countries, with the recent addition of Finland and Argentina, have formed national advisory boards to accelerate the practice of impact investing.

An Impact Investing Tent Big Enough for the Problems We are Trying to Solve

This article by the CEO of the GIIN explores the network’s goals and aspirations in the impact investing sphere.

ESG

World’s Largest Pension Fund Selects Three ESG Indices for $9 Billion Investments

Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, announced Monday that it will shift 3% of its passive domestic equity investments (roughly $8.8 billion) into ESG indices.?

Establishing A Global Standard With Water In ESG Integration

Water resource groups all share the urgency for understanding one important concept, sustainability. Over time and research, these groups have analyzed how critical it is for institutional investors to strengthen their understanding of water in ESG integration.?

Asia Pacific Investors Take the Lead on ESG Integration

Asia Pacific investors have leapt ahead of their global counterparts in integrating ESG strategies into their investment decisions, a new survey by BNP Paribas Securities Services has revealed. 84 percent of the 135 institutional asset owners and managers surveyed in Asia Pacific are currently integrating ESG factors into their investment decisions.

Shifting Perceptions: ESG, Credit Risk and Ratings

This report is the first in a three-part series by the Principles for Responsible Investment (PRI) on its initiative to enhance the systematic and transparent consideration of ESG issues in the assessment of the creditworthiness of borrowers in fixed income markets. Click the link to download a copy of the report from the PRI website.

United States & Europe

United States

Oil Snaps Rally; Stocks, Steady After Fed Minutes

Oil prices fell sharply on Wednesday after their longest rally in more than five years while stocks ended higher after minutes from the U.S. Federal Reserve’s last meeting showed contrasting opinions.

US Jobs Growth Faster than Expected

The economy added 222,000 jobs in June, the US Department of Labor said, and job creation in April and May was higher than previously estimated.

Europe

Ahead of G20 Summit: ‘My Country First’ Approach Threatens Achievement of Global Goals

Ahead of the G20 meeting in Hamburg, the newly published SDG Index and Dashboards Report 2017 illustrates that world leaders need to strengthen their joint efforts to realize the global goals. Not only does a rising trend of nationalism and protectionism impede the implementation of the goals, but as the report shows, industrialized countries are not serving as role models.

Developing Economies

Implementation and Effects of the G20 Financial Regulatory Reforms

This report acts as a status update for progress on the G20’s program of reforms implemented to increase the resilience of the global financial system while preserving its open and integrated structure.

Africa

Why These Investors are Focusing on Impact Investing Across Africa

In this episode of the MoneyMakers Bruce Whitfield speaks to Brendan Mullen, Managing Director of Secha Capital and Nombuso Nkambule, Co-founder to discuss how it is identifying long-term opportunities for improvement and growth.

World Bank Approves $345 Million Loan for Tanzania Port Expansion

The port handled 13.8 million metric ton in 2016 – an increase from 10.4 million in 2011, reflecting an average growth of 9 percent per year, according to the bank. Tanzania wants to lift its capacity to 28 million metric tons a year by 2020.

Latin America

PERU: Annual Inflation Rate Decreases to Lowest Level in Almost Three Years

The annual consumer price inflation in Peru decreased in June to the lowest level in almost three years and is nearing the center of the current target range of 1% to 3% set by the local central bank.

Latin America is Going Through an Energy Transformation, and It Could Be a Huge Benefit to the US

This article details recent shifts in the Latin American energy market which could affect the demand for US energy.

Amid Crisis, Brazilian Impact Investors are Resilient and Optimistic (Podcast)

ImpactAlpha’s David Bank interviewed Fernando Scodro of Grupo Baoba, who next week is launching the Brazilian chapter of The ImPact, a network of wealthy families that have come together to make more impact investments, more effectively.

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.

Weekly Impact Investment Market Update: May 29, 2017

Posted on by MBC Strategic

Impact Investing & ESG

Gitterman Says ESG Plays Well on Campus

Gitterman is working with 5,000 college professors to build ESG portfolios, in total valuing approximately $450 million in assets.

Demand for Responsible Investment Pushing Up the Value Chain

As the subject of impact investment has joined the mainstream, clients have increasingly started demanding better disclosures on responsible investment practices.

Unpacking Impact Investing – An Emerging Asset Class

In this interview, Kate Kohler, co leader of Korn Ferry’s Impact Investing Practice, notes that impact investing attracts both highly value-aligned under-30-year-olds, and accomplished financial and investment professionals seeking more fulfilment than what they obtain from ordinary investing.

Nestle Waters North America Announces $6 Million Investment in Closed Loop Fund

This contribution will join the $100 million social impact investment fund, which seeks to find a national solution to the gap in recycling infrastructure and programs in U.S. cities.

Investors See Tangible Returns in ESG Integration

Over two thirds of 475 surveyed institutional investors noted an increase in returns once ESG criteria were integrated into decision making processes.

United States and Europe

Boom Time Again for U.S. Oil Industry, Thanks to OPEC

After the price of oil dropped in 2015 and 2016, OPEC and Russia’s decision to cut their oil production helped push the price of oil back up. As a result, today there are twice as many U.S. oil rigs as there were this time last year.

Consumers Energy Investing Nearly $440 Million to Enhance Safety, Reliability of Natural Gas System

$75 million will be spent to complete 40 improvement projects and replace 67 miles of pipe in southern Michigan; $120 million will go to expansions, improvements, construction, and capacity increases for the natural gas system; and $183 million will go to improvements for pipeline integrity.

US Growth Rate Revised Up to 1.2%

The US economy grew at a faster pace than initially thought in the first three months of the year.

Michigan Good Food Fund Tops $10.5 Million Milestone in Statewide Good Food Investments

The fund provided financing to six food enterprises, which will boost job creation and healthy food access in underserved Michigan communities.

Emerging Markets

South Africa’s Western Cape Declares Drought Disaster

After experiencing the worst shortage in 113 years, water will now be harvested by drilling boreholes to serve key points in the region; over 40 million people have been affected.

Emerging Markets Remain a Good Bet and are Under Owned Despite Strong Gains: Deutsche

As U.S. interest rates rise, investors are looking overseas to generate returns; emerging markets are experiencing high real rates, positive growth, and consistent returns, and are expected to maintain their status as a worthwhile investment destination for at least the next three years.

Incoming Ecuador President Moreno Names Finance, Oil Ministers

The new finance minister is tasked with solving Ecuador’s large fiscal deficit, while the new oil minister must help the nation recover from low oil prices.

Asia Stocks Higher; South Korea Share Soar as Interest Rates Hold Steady

The increase and subsequent gains are the result of the nation’s central bank holding interest rates at a record low, in a vote of confidence in the economy.

Weekly Impact Investment Market Update: May 19, 2017

Posted on by MBC Strategic

Impact Investing & ESG
 

Fidelity Launches Two ESG Index Funds

Their new domestic fund is based on the MSCI USA ESG Index, while the international fund is based on the MSCI All Country World Index. Both follow large- and mid-cap companies with high ESG performance relative to sector peers in their respective markets.

Growth-Market Private Equity Investors Look to 2030 Global Goals for Direction

The 17 Sustainable Development Goals focus on “do no harm” investment approaches and represent up to $12 trillion in revenues and savings by 2030.

Public Policy and Investments in Quality Jobs

This document is the second installment of an exploration of the capacity of the impact investing industry, business owners, and policymakers to support job creation. This installment focuses on how public policy can direct capital to quality job-making businesses, and what changes can be made to encourage further job creation.

Annual Impact Investor Survey 2017

The Global Impact Investing Network released their annual survey on the activities of 209 leading impact organizations, presenting investors’ perspectives on current issues and market topics in the impact investment industry.

The OECD’s View on Integration of ESG Issues into Investments – What Next?

The OECD published a report in early May which had various findings: that strong regulatory frameworks can incentivize investors to include ESG factors into their investment governance where they are consistent with financial obligations; that ESG factors can influence investment returns through their impact on companies’ financial performance; and that while ESG related portfolio risks are difficult to measure, tools are being developed to remedy this issue.

Morgan Stanley Investment Management Raises More Than $125 Million for its First Global Impact Fund

The PMF Integro Fund I gives investors exposure to a diverse portfolio which seeks to maximize commercial returns while accomplishing various impact objectives in under served populations.

Five Things to Know About the Social (Impact) Scene in Asia

The CEO of the Asian Venture Philanthropy Network highlighted five themes in the Asian impact industry, including: that momentum is building for investment in social businesses, with successes like Korean startup Tree Planet paving the way; that interest in themes like education and health needs to increase; and that local laws need to evolve to pave the way for social purposes merging with financial objectives.

 

United States and Europe
 

Trump Crisis Mushrooms on Russia-Probe Report, “Nut Job” Remark

While a senior White House adviser close to President Trump has been identified as a “person of interest” in the federal investigation of Russian collusion, the President is traveling to Saudi Arabia; with this visit he hopes to unify Muslim, Jewish, and Christian leaders against extremism, and to reestablish the U.S. as a global leader.

Macron in Mali: France Will Be “Uncompromising” in Fight Against Terrorists

New French President Macron has reaffirmed the nation’s commitment to fight against Islamic terrorists in Mali. In an attempt to strengthen ties and improve security in the West African country, Macron has met with German Chancellor Angela Merkel in Berlin.

Global Cyber-Attack: Security Blogger Halts Ransomware “By Accident”

The spread of the malware, which was designed to lock users’ data until a ransom was paid, has been halted after a UK security researcher registered an unregistered web address connected to the malware. Existing infected computers are still affected, but the researcher’s registration of the web address activated the “kill switch”, preventing the malware from spreading to any new devices.

 

Emerging Markets
 

Apartheid Still Casts Shadow Over South Africa Agriculture

Despite major segregation legislation for land ownership being repealed, there is still a large disparity in the proportion of white and black farmers who own land in South Africa. The head of the Agri SA cooperative, Omri Van Zyl, asserts that this disparity must be addressed to prevent the nation becoming food insecure in the future.

Mutual Funds Get Crushed by Brazil

Amid accusations that implicate the Brazil President Michel Temer in bribery, mutual funds with large holdings of Brazilian assets have seen huge losses; for example, the Fidelity Latin America Fund’s value dropped 12 percent on Thursday alone.

Argentina and China Sign Contract for Two Reactors

A general contract was signed between Nucleoeléctrica Argentina SA, China National Nuclear Corporation, and China Zhongyuan Engineering Corporation; the agreement affirms that China will contribute 85% of the required financing for the construction of two new power plants in Argentina, as first agreed upon in November 2015.

One-Third of Asia’s Wealth May Change Hands in the Next Five Years

The younger Asian economies will see their “first-ever major inter-generational wealth transfer”; as 90 percent of billionaire fortunes don’t survive longer than two generations, this shift creates a need for more family offices in these economies.

Indonesia, China Consortium Sign 45 bln Loan for Rail Project

The loan from China Development Bank will cover 75% of total costs to build the country’s first fast-train rail link connecting Indonesia’s capital, Jakarta, to its textile hub in Bandung.