While much of Confluence Philanthropy’s 2021 Climate Solutions Summit centered on the mammoth challenges of climate change mitigation, with conversation focused on topics such as the Paris Accord and China’s Climate Policy, we at Ceniarth were happy to have the opportunity to lead an off-the-beaten-path breakout session about climate justice and energy access.
We were a small group of six in attendance, a sparse gathering, perhaps indicative of the fact that most impact investor interest in climate change still remains focused more on ESG screening and shareholder advocacy, environmental approaches to mitigation, and renewable energy investment, as opposed to the messier world of tackling what our ever-warmer planet means for the world’s most vulnerable communities.
All in attendance agreed that the vast majority of climate-focused impact investment dollars are flowing to the “finance-first” side of the investment continuum. In general, we felt that this influx of capital was a good thing for the planet, and that for those solely focused on carbon abatement and achieving temperature reductions, it is necessary to harness the powerful scale of commercial investment.
That said, there was also agreement that “impact-first” dollars are essential to accelerating the pace of climate adaptation for marginalized communities. We discussed the need to clarify the differences in these “finance-first” and “impact-first” approaches for investors and to be precise about the intended impacts and beneficiary populations. We reflected on the fact that these can be nuanced differences requiring a deeper understanding of market dynamics.
For example, we discussed the energy access market, particularly in Sub-Saharan Africa, where the demand for investment in commercial and industrial solar, as well as larger solar home and small business systems is booming, but where there are still major challenges to facilitating access for rural communities. We discussed the need to find ways to fund smaller distributors that are active in these geographies, and agreed that it is often hard for those with a “finance-first” lens to pursue these opportunities. We agreed on the need to segment these market opportunities as to attract more philanthropic, impact-first dollars to where it is most necessary.
We moved on to observe that while most associate the energy access field with international markets, there is a pressing need at home in the United States to support the roll-out of clean energy solutions for low income communities. We touched on a number of enterprises that are working in persistent poverty regions such as the Mississippi Delta and Indian Country to expand residential, community, and utility scale solar in these communities.
Woven throughout our discussion was a serious concern that as the field of impact investing has grown, the voices of those with the deepest programmatic knowledge, and those focused on the needs of the most vulnerable, are being drowned out by the “big dogs” (to use a phrase of one attendee) advocating finance-first approaches. There is an institutional shaming and marginalization taking place in the impact investing industry - even in seemingly progressive forums such as Confluence - of those who challenge the conventional sense that investors can “have it all” in terms of impact and returns.
If we are going to make sure that our investments in climate change do not leave behind the same communities that have historically been left behind by commercial markets, we must continue to call out the need for impact-first attention to climate justice.
For investors looking for additional resources on the topic:
- Greg Neichin, Director, Ceniarth
Greg is the Director of Ceniarth and Board Member of the related Isenberg Family Charitable Foundation. Ceniarth is an impact-first investor focused on funding market-based solutions that benefit underserved communities. Ceniarth engages globally in rural, marginalized places with an emphasis on sectors such as agriculture, affordable housing, financial inclusion, and energy access. Prior to Ceniarth, Greg served as Executive Vice President of Cleantech Group where he led the firm’s global advisory business helping investors identify and evaluate opportunities in energy and resource markets. He spent four years on the management team of GetActive Software, one of the earliest, online fundraising platforms for charities and began his career as a consultant with Oliver Wyman. Greg has a B.A. from Dartmouth College and an M.B.A. from the Wharton School at the University of Pennsylvania where he was a recipient of the Price Fellowship for studies in Entrepreneurial Management.
