Impact Finance Bulletin: L’Oréal commits €50m to new impact fund for circular economy; women's financial inclusion fund raises $103m
Our regular impact finance bulletin brings you the latest funds, deals and programmes in the world of investing for good. Read on for our selection of impact investment headlines from the past month.
France/Global: Cosmetics giant l’Oréal commits €50m to new €150m impact fund to scale circular economy innovations
French cosmetics brand L’Oréal is the anchor investor in a €150m Circular Innovation Fund, an impact venture capital fund focused on businesses developing new solutions to build a circular economy.
The fund will invest in growth-stage ventures in North America, Europe and Asia that are developing circular economy business models and technologies, such as new materials, circular packaging, recycling and waste innovations, logistics, as well as eco-efficient processes and design.
L’Oréal, which reported record operating profits of €6.16bn last year, is the anchor investor in the fund, committing €50m; other investors include Axens Group, family offices, private investors and asset managers.
“We believe impact investment is one of the ways we can contribute to spur innovation in the circular economy space,” said Christophe Babule, executive vice president and CFO of L’Oréal.
The Circular Innovation Fund is the second impact fund launched by L’Oréal. In 2020, the company launched the €50m L’Oréal Fund for Nature Regeneration, which aimed to fund projects that support the restoration of forests, mangroves, marine areas and degraded lands.
Alexandra Palt, CEO of the Fondation L’Oréal, the beauty brand’s philanthropic arm, said L’Oréal wanted to act in “two complementary and strategic ways” – by reducing its own negative impact as a business, and by contributing to addressing some of the “most pressing” environmental challenges, such as waste management, plastic pollution and biodiversity loss.
Global: New fund for women’s financial inclusion raises $103m
Women’s World Banking Asset Management (WAM) has announced the final close of its second fund for women’s financial inclusion at USD103m. The fund, WWB Capital Partners II, aims to close the gender gap in access to finance, while demonstrating the efficiency of gender-lens investing by achieving substantial returns for investors.
The fund has a blended finance structure, with anchor investors – the European Union and the German government – providing first-loss capital while private and institutional investors have enhanced risk-adjusted returns. In addition, a grant-funded technical assistance facility supports investees to achieve their social and financial objectives.
WAM, a subsidiary of global charity Women’s World Banking, invests in small and inclusive financial companies in emerging markets to reach financially underserved women and promote women as staff members and leaders.
This new fund allows us to be even more intentional in leading gender-inclusive growth
Christina Juhasz, CIO of WAM, said: “This new fund allows us to be even more intentional in leading gender-inclusive growth with our portfolio companies, deepening outreach to financially underserved women and female-identifying customers and increasing employment and leadership opportunities for them – all of which is consistent with achieving attractive financial returns for our limited partners.”
WWB Capital Partners II has made five investments to date, including in an affordable housing finance company in India and a peer-to-peer small business lender in Indonesia.
The fund is backed by investors from the public, philanthropic and private sectors, including US’s Development Finance Corporation, Japan's International Cooperation Agency, USAID, the Soros Economic Development Fund, and a number of impact investors and high net-worth individuals.
Japan: Impact investments jump by 250% – new survey
Japan’s impact investing market has more than doubled in 2021, reaching more than JPY1.3tn (USD10.17bn) – a 250% increase from JPY512.6bn the previous year, reveals a new report published this week.
The research, The Current State and Challenges of Impact Investing in Japan: FY2021 Survey, was conducted between September 2021 and January 2022 by the Japan Social Innovation and Investment Foundation (SIIF), an organisation that promotes impact investing and serves as the secretariat for the Global Steering Group for Impact Investment (GSG) National Advisory Board for Japan. The English version of the report is due to be published in June.
The survey, which has been published annually since 2016, is based on the responses of 77 financial firms.
Read more on Pioneers Post.
Haiti: United Nations IFAD invests $14m to support smallholder farmers and fisherfolk
The UN’s International Fund for Agricultural Development (IFAD) is to invest $14m to improve the livelihoods of smallholder farmers and artisanal fisherfolk in Haiti.
The Inclusive Blue Economy Project, which represents a total investment of USD26.6m, is backed by Haiti’s Ministry of Economy and Finance, and is expected to benefit 40,000 people – half of which are women – living in the country’s north-eastern area.
The initiative will focus on developing sustainable farming and fishing practices to improve the country’s food security without exhausting natural resources. Current practices are threatening key ecological assets such as mangrove forests and coral reefs.
“We believe the best way to help Haitian smallholder farmers and artisanal fisherfolk to progress and contribute to the country’s food security is by enabling them to run their economic activities in a sustainable manner, so that they are not forced to deplete natural resources to survive,” said Paolo Silveri, IFAD’s country director for Haiti.
Political instability and several natural disasters have been plaguing Haiti for years, and the UN estimates 4.3m people (44% of the population) suffered from acute food insecurity in 2021, with nearly 1.3m people in a situation of food emergency.
The Inclusive Blue Economy Project could be used as a basis for sustainable management in 24 other Haitian regions.
“We need to create economic and social opportunities in rural areas, so that young Haitians have an alternative to migration, while those who have already left have a reason to return,” said Silveri.
- Read more on fisheries conservation in our Earth Fixers collection: Blue forests are under threat. A quiet revolution could save them
Global: 1% for the Planet launches impact fund to drive positive change for the environment
1% for the Planet, a global network of businesses, charities and individuals that have committed to donate 1% of their sales to environmental causes, has launched a new impact fund in partnership with US-wide charity, the National Philanthropic Trust, and CapShift.
Donations to the Planet Impact Fund will be invested in climate-focused investments and approximately 10% of all funds will be disbursed as grants to nonprofit organisations driving environmental impact each year.
Kate Williams, CEO of 1% for the Planet, said the fund represented a “unique opportunity to optimise multiple levers of change that can generate positive outcomes for our planet and future generations”.
1% for the Planet was co-founded two decades ago by Yvon Chouinard, the founder and owner of outdoor clothing brand Patagonia, and the network has donated more than $350m to support environmental NGOs around the world to date.
Netherlands: Dutch impact investors ‘punching below their weight’ on SDGs
The Dutch financial sector may be “punching below its weight” in contributing to the UN Sustainable Development Goals, according to research unveiled at the end of last month.
The State of the Dutch Impact Investing Sector, published by the Netherlands Advisory Board on Impact Investing and KPMG, finds that Dutch players – including pension funds, asset managers and public investors – have currently invested assets worth an estimated €150-€180bn for impact, accounting for 4-6% of all Dutch assets under management.
However, this percentage is low for a country aspiring to become a world leader in this field, the report argues, and falls short of the 5-7% needed each year to achieve the SDGs by 2030.
Read more on Pioneers Post.
UK: Access, Bank of America named as investors in UK's 'extremely bold' £25m equality and racial justice fund
Bank of America and UK social investor Access Foundation have been named as grant investors in the £25m Growth Impact Fund, an upcoming social investment fund focused on tackling inequality and promoting racial justice in the UK.
Both will provide grant capital – with Access committing several million pounds and Bank of America investing an undisclosed amount, which Pioneers Post was told was “significant”. A number of other investors have also indicated they will make equity investments in the upcoming fund, which is “close to a first close”, Pioneers Post was told.
The Growth Impact Fund, developed by UnLtd, Big Issue Invest and Shift since 2020 and set to launch in the next few weeks, is a blended fund in which investors will be able to invest either grants or equity. It is expected to support 50 to 60 social enterprises, with the first investments likely to take place in July.
Read more on Pioneers Post.
Global: Branson family, Leonardo DiCaprio invest in water data startup Waterplan’s $7m seed round
Waterplan, a startup that uses artificial intelligence to predict water shortages and incentivise water conservation, has raised a USD7m seed round, led by impact venture capital firm Giant Ventures and Transition Global.
Other investors include wealthy individuals such the Branson family and actor Leonardo DiCaprio, a number of VC investors and climate-focused funds.
Waterplan’s platform was designed to predict disruptions to water supply caused by climate change and other factors. It works with businesses in water-reliant industries such as agriculture, food and beverages or paper products to assess water supply security, conserve water, protect waterways from pollution, and take action to tackle environmental issues.
José Ignacio Galindo, CEO of Waterplan, said the platform “equips companies to continuously monitor water risks, anticipate and prevent disruptions, while simultaneously meeting ESG objectives and doing what’s best for the environment”. He added the new investment would enable the startup to “further advance” this approach.
DiCaprio said: “Water-related catastrophes continue to be a major result of the ongoing climate crisis. Having a platform that helps predict and take steps to prevent these events can be an invaluable tool in the fight.”
England: ‘Transformative’ £2m grant funding aims to boost Covid-19 recovery for social enterprises led by people of colour in England
A total of £4m of blended finance, including £2m grant funding, will be made available to Black and minoritised ethnicity-led social enterprises and charities in England to help them recover from the fallout of Covid-19. The funding was announced by Social Investment Business (SIB), the Access foundation and social enterprise partners on 5 April.
This includes £2m of unrestricted grants from Access’ Flexible Finance programme, matched with £2m of loan money from the Recovery Loan Fund. The funding is expected to support 20 organisations. Social enterprises and charities must apply for a loan under the Recovery Loan Fund to be eligible to receive grants.
The announcement came as the social investment sector in the UK has been heavily criticised over its failure to adequately serve social enterprises and charities led by people of colour.
Read more on Pioneers Post.
Scotland: SIS Ventures fund secures £1m from tech entrepreneurs’ venture fund
SIS Ventures has secured £1m for its Impact First fund from Chroma Ventures, a Scotland-based investment arm of video game developer, 4J Studios.
Founded by Paddy Burns and Chris van der Kuyl in 2021, Chroma Ventures provides flexible capital and support for early-stage and established data-led businesses.
Chris van der Kuyl, principal of Chroma Ventures, said: “SIS Ventures' ambition and approach complements our desire to invest in exceptional leaders and teams, which is why we have chosen to enhance our support through their Impact First fund.”
Read more on Pioneers Post.
MORE NEWS IN BRIEF
- Global: After a record year in 2021, impact startups raised $12.9bn globally in the first three months of 2022, in the fifth highest quarter on record – but down 15% compared with last year’s first quarter, according to data provider Dealroom’s latest report.
- India: Kinara Capital, an Indian fintech company that provides micro loans for small businesses via an app, has raised nearly USD50m in a recent equity funding round.
- Global/Canada: Manifest Climate, an AI-powered climate intelligence platform, has raised USD24 million in a series A funding round to advance climate reporting.
- UK: Femtech startup LatchAid, which provides breastfeeding and early parenthood support using an app, virtual peer support groups and artificial intelligence, has raised £1m in seed funding.
- Europe: Climate VC, an impact venture fund that backs climate startups overlooked by traditional VC investors, has launched with €41m to be invested over the next three years, EU Startups reported.
- US: Chief, a private network focused on connecting and supporting women leaders, has raised $100m in a series B round led by Alphabet’s CapitalG, making it a unicorn as it reached a $1.1bn valuation just three years after it was founded. (Via Dealroom).
- Catalonia: Barcelona-based Heüra, a food company that provides plant-based alternatives to meat, has raised €4m in a crowdfunding campaign in less than three hours, vegconomist.com reported.
- Vietnam: Pioneer Facility has made a USD300,000 loan investment in E-Green, a company that enables farmers to use their waste to produce energy in Vietnam. The investment is expected to reduce greenhouse gas emissions by an estimated 300,000 tons of CO2.
- Germany: German insurer Barmenia has mandated Schroders Capital to build and manage a €100m impact-focused private assets portfolio.
- Netherlands: CBRE Investment Management and NN Group have launched the €500m Positive Impact Programmatic Venture to invest in Dutch sustainable and affordable residential real estate, with the aim to improve energy efficiency and reduce carbon emissions.
- Global: Renewable power developer and investor TagEnergy has raised €450m from Natixis affiliate Mirova and its majority shareholder Omen to further its energy production capacity, currently at 2.7GW.
- France: Parisian ESG data intelligence startup Deepki has secured €150m in a series C round to help the real estate sector reduce carbon emissions. (via Dealroom)
Top image courtesy of L'Oréal.
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