Re-Wiring the Food Chain
(Follow the Food—part 4)
Fair Trade coffee from Nicaragua. Mangoes from Haiti, quinoa from Ecuador, cotton from Uganda, shea butter from Burkina Faso.
Imagine connecting rural smallholder farmers in Latin America and Africa to middle-class consumers in Europe and the US.
Former Lehman banker William “Willy” Foote has found a way. And now Root Capital, the Cambridge, Mass.-based nonprofit he founded in l999, is scaling its groundbreaking trade finance model and seeking to adopt it to African food security.
For the whole story, go here:
www.fa-mag.com/pw-mag/impact-investing/10868-investing-in-the-food-chain.html
Follow the Food—part 2
Impact investors are supporting operating loans for organic farmers and food hubs
Looking to invest in ways that help scale the supply of fresh local food and build regional food systems?
The Carrot Project, a Somerville, Mass.-based nonprofit that specializes in small farm finance, has developed three loan funds in partnership with three different financial institutions that offer operating capital to organic farmers in Vermont, Massachusetts and Maine.
And RSF Social Finance, a San Francisco-based nonprofit financial services company, has a big focus on financing the infrastructure that moves food locally—from farm to institutions like schools and hospitals, for example.
See more here:
www.fa-mag.com/pw-mag/impact-investing/10197-green-acres.html
Follow the Food
Impact investors seek to scale the supply of fresh local food and build a regional food system
“Midwest farmland is a bubble, and it’s debt-driven,” says Craig Wichner, managing partner of San Francisco-based Farmland LP, a private equity firm that converts farmland to organic. “The requirements for ethanol have driven up the cost of farmland and of food, and more land is being taken out of other productive uses and being converted to corn-land.
“Food is correlated with oil, and if you are investing in farmland, you don’t want that correlation,” he says. “A great alternative is sustainable Ag.”
To learn how the Seattle-based PCC Farmland Trust has helped cut the cost of farmland to farmers, and how Turners Falls, Mass.-based Equity Trust helps communities and farmers share ownership of farms, see more here:
Green Dividends
HIP Investor Inc. has applied its performance-based sustainability metrics to preferred stocks and REITs
Customer satisfaction, employee access to health care and carbon emissions per unit of revenue aren’t the sort of metrics you find in a company’s financial statements. But they represent non-financial impacts that companies create. And they are among the 30 or so environmental, social and governance indicators that HIP Investor Inc. says can lead to higher profits.
See more here:
www.fa-mag.com/green/news/9903-green-dividends.html
Low-Carb (on) Diet Fuels Sexy Returns
Colleges and universities are earning robust returns by using Green Revolving Funds to finance investments in energy efficiency and thereby cut carbon emissions and energy costs.
“Right now, the endowment is getting almost nothing in the stock market,” says Jake Cain, sustainability manager at Weber State University. “And by investing in ourselves, the risk and chance of failure is almost nothing.”
Learn more here:
www.fa-mag.com/green/news/9606-green-funds-that-merit-the-name.html
The Secret Sandbox
For impact investors, donor advised funds offer the most flexibility available in terms of both returns and social mission
Foundations have long been a way to funnel charitable dollars into investments targeting a specific mission. Indeed, impact investing arguably got its start in the late 60s with the creation of program-related investments, or PRIs, which are investments foundations make to target their philanthropic missions. But while PRIs are an exciting tool that can function as social venture capital, they are available only for foundation purposes. Donor-advised funds, on the other hand, can offer an intriguing alternative for individual investors.
For more, see here:
SRI Pioneer Plays By His Own Rules
Zevin Asset Management has beaten its equity benchmark by using a counter-intuitive low risk strategy of avoiding loss
Since ZAM’s inception, the Dow Jones Global Index jumped at an annual rate of 34.4% per year during the 34 quarters when the markets rose versus 27.2% for the firm’s non-taxable accounts. But during the 21 quarters when the markets declined, the Zevin composite’s average annual drop of 14.9% was less than half as much as the benchmark, which plummeted at an average rate of 31.3%.
As a result, $100,000 invested with ZAM at the firm’s inception would now be worth $330,000 versus $170,000 for the benchmark.
“The important thing always is not to lose money [when the market is] on the way down,” says Robert Brooke Zevin, the grandfather of socially responsible investing—and a pioneer in the use of Modern Portfolio Theory.
For more, see here:
www.fa-mag.com/green/news/9043-sri-pioneer-plays-by-his-own-rules.html
New Corporate Forms in California
Governor Jerry Brown signed two new corporate forms into law in California Sunday night: the Flexible Purpose Corporation and the Benefit Corporation.
I wrote about both corporate forms in April, and the original article can be found here:
Connecting the Dots
Whereas sustainability reports are about accountability, integrated reports are about changing the way companies think
“Just telling you that [a company] uses 400 million hectares of aquifer water is meaningless unless you know that ten of their 20 plants are in water-stressed areas,” says Eric Hespenheide, Deloitte and Touche LLP’s global leader of sustainability and climate change, audit and enterprise risk services. “[Integrated reporting] is driving toward understanding the context in which [a company] is using natural capital, human capital, manufactured capital and financial capital to drive those results.”
Ultimately, though, integrated reporting is about integrated thinking.
“It’s really about a culture change,” says Michael P. Krzus, former partner at Grant Thornton, who points out that integrated reporting is about breaking down silos that impede communication whether it’s between operations and finance, or finance and marketing, within the sustainability group, or between senior executives. “It’s really more about change management than it is about integrated reporting.”
To read the rest of the story (part 3 of Accounting for Sustainability), go here:
Betrayal of Possibility
In the final analysis, Bethany McLean says, the biggest corruption of all in the financial crisis was “people all thinking the same way.” By that, the co-author of All the Devils Are Here means there was an almost cult-like belief in the market. “Everybody believed the market would not permit certain things to happen because the market is all-knowing,” she says. “It’s so steeped in the business culture, and there’s an attitude of, well, you’re stupid if you don’t realize this is how it works.”
In the mortgage market, she says, somebody could package up and sell bad loans, knowing they were flawed, because the market knows best and will put a stop to it if it isn’t OK.
“Instead of having God to believe in, you have the market,” she says. “And that absolves you of any responsibility for any of your choices.”
To see the whole article, go here:
