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.”