Category Archives: Venture capital

The Win-Win-Win of Impact Investing

By: Nathan Sell*

Ask not what your investment dollars can do for you, but ALSO what they can do for others, and the environment. That’s the idea behind Impact Investing, an emerging paradigm shift in philanthropy. This form of socially responsible investing generates both measurable social and environmental impact as well as returns on investment. Mark Tercek, CEO of the Nature Conservancy and former Managing Director at Goldman Sachs is at the forefront of linking business and the environment for a better world as he discusses in his recent book “Nature’s Fortune.” Tercek, and the new wave of impact investors are proving that your investments can make money AND do good.

Impact investing in the environment is quickly coming to scale as the value of ecosystem services to clean air and water, armor shorelines, as well as climate change mitigation and adaptation is being realized. Cities like Philadelphia are leading the way in green infrastructure investment. Over the next 25 years, Green Stormwater Infrastructure will help the city to combat the extreme weather patterns as well as prevent Combined Sewer Overflows resulting in greener cities and cleaner waters for which the initiative is named.

Novo Nordisk entered China in 1994 and immediately noticed that a diet high in starch was leading to diabetes in a large portion of the population. Combined with rapid pathogen spread due to urbanization, the health of the people in China was (and continues to be) at risk. Novo Nordisk put their efforts toward alleviating some of these health concerns. By training doctors in diabetes care and prevention, the company has helped to save over 140,000 life years. The shared value of impact investment ensures companies like Novo Nordisk remain profitable while helping the communities in which they work.

Impact investing also has the potential to bring promising technologies to scale. Without investment, it’s possible that companies like d.light may never have gotten off the ground. With the help of investment, this for-profit social enterprise has been able to sell affordable solar lamps to those without reliable power. The result? D.light is bringing safe, bright and renewable lighting to people around the world, allowing students to do their homework, families to cook, and an overall better quality of life to over 34 million people.

Impact investing may prove better for people and the planet than charitable giving. Investing in businesses that do good by people and the planet can ensure the success of their mission, allowing for long term solutions, rather than a potential band-aid in the form of a grant or gift. If your investment could benefit the triple bottom line, rather than just YOUR bottom line then you’ve found the rare win-win-win scenario. The next time you invest, think strategically about what your money can really do.

*Nathan is a recent graduate of the Master of Environmental Studies program at the University of Pennsylvania and a current ORISE Fellow with EPA Water.

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Water: Emerging Risks and Opportunities Summit

by Samantha Guidon*

On February 8, 2013, with an imminent Winter Storm Nemo on the horizon, over 250 industry leaders and key players in the water sector came together at Goldman Sachs in New York City to begin the dialogue on addressing water risks throughout the country. Students from the Master of Environmental Studies at the University of Pennsylvania joined the Wharton Initiative for Global Environmental Leadership (Wharton IGEL) team in attending this event to gain key perspectives from leaders in the water sector. Entitled “Water: Emerging Risks and Opportunities Summit,” the conference identified areas in need of improvement and discussed opportunities from various points of view. A welcoming address from David Solomon, Co-Head of the Investment Banking Division at Goldman Sachs, established the overall goals of bringing together capital, technology, and policy in order to determine best management practices within the water sector. Continue reading

UBS Q-series Inflection Points: Towards Sustainability

*by Candice D. McLeod

Last month, UBS hosted Inflection Points: Towards Sustainability at the Bloomberg headquarters, as part of their annual Q-series initiative. The Q in Q-series stands for asking questions, particularly tough questions, as noted by Penn alumna and UBS Head of Global Sector Research, Erika Karp, who helmed the event.

Erika Karp, UBS, Head of Global Sector Research

The event’s main tough question: How do companies not only identify the inflection points in the their industry –“defined as accelerating rates of system-wide change that alter the manner in which industry leaders think and act”- , but also leverage these changes into driving sales and profits? Continue reading

Can Venture Capital Really Influence Environmental Sustainability?

Robert MacDonald presenting

Panel at Wharton Global Alumni Forum

Can venture capital really lead to sustainable businesses, energy and products? Or is venture capital an outdated and inefficient means of funding sustainable enterprises?

We posed this question and more to a panel hosted by IGEL and Bank of America at the Wharton Global Alumni Forum in San Francisco.(1)

Venture capital is the only way to sustainability. – Ashmeet Sidana, Panelist, Foundation Capital

The panel’s consensus was a resounding yes – venture capital can lead to environmental sustainability.  Panelist Ashmeet Sidana of Foundation Capital went on to argue that venture capital is the only way to reach sustainable goals. Panelists highlighted their cleantech investments, including new methods of algae biofuels manufacturing, solar power, geothermal energy and smart grids.  Last quarter saw the most investments in cleantech ever, said Andrew Chung of Lightspeed. Robert MacDonald of Craton Equity Partners showed the optimism of the markets by remarking that investments in cleantech is nearly $200 billion worldwide.

Remarkably, these investments are largely consumer-driven with large corporations like GE, Chevron and Intel buying in. Consumer and corporate buy-in is crucial,  given the lack of policy-leadership in the U.S. on clean energy.  In fact, investors’ frustrations are only mounting from uncertainty in the political climate.

The panelists also discussed necessary steps for scaling up cleantech investments. Capital efficiency is crucial, said Cynthia Ringo of DBL Investors.  Also necessary is further advances in technology for renewable energy storage.

What are your thoughts?  Leave us a comment in the Comments section or connect with us on Facebook or Twitter.

The panelists were:

Ashmeet Sidana, General Partner, Foundation Capital

Mr. Sidana has investments in cloud computing, network efficiency and consolidation, and wireless monitoring.  He also is involved in solar power for India; he led the Foundation’s investment in and currently serves on the board of AzurePower, a solar power company in India. Foundation Capital also invests in such green and clean-tech such as smart grid technology, paper-less sharing systems, food and water sanitation systems, environmentally-friendly advanced materials manufacturing, energy conversion and efficiency technology, and thermal management.

Cynthia Ringo, Managing Partner, DBL Investors

Ms. Ringo is a board observer for LiveScribe, a new computer-version of pen and paper, as well as a board member for Solexant and Soladigm, two solar companies with new PV technologies. Prior to DBL, she was the CEO of CopperCom, a next-generation telecom equipment company. DBL also invests in electric cars and smart grid technology.

Andrew Chung, Principal, Lightspeed

Mr. Chung is a Principal at Lightspeed and has helped lead the firm’s entry into new areas of investment that include cleantech, education, genomics, and healthcare IT. Lightspeed’s investments include next-generation biofuels. Andrew chairs the Cleantech Advisory Board for The Indus Entrepreneurs (TIE), serves on the Advisory Board for Stanford Energy Crossroads, and is an advisor to the Clean Tech Open.

Jon Krahulik, Managing Director and Global Head of Clean Technology Investment Banking, Bank of America Merrill Lynch

Mr. Krahulik is responsible for growing the firms’’ coverage of companies across the clean tech sector globally. Mr. Krahulik joined Bank of America Merrill Lynch from Deutsche Bank Securities, where he served for four years, most recently leading clean tech investment banking.  Earlier in his career, Krahulik spent seven years in the global technology group at Lehman Brothers, most recently as a senior vice president.

Robert MacDonald, Managing Partner,  Craton Equity Partners

Mr. MacDonald developed Catalyst Energy Corporation into one of the largest IPPs in the country. Bob currently serves on the boards of EnLink Geoenergy Services, GigaCrete, Inc., Petra Solar, and RYPOS.

(1) Bank of America and IGEL have teamed up to create a speaker series on topics in business and environment.
Click here for SmartPlanet’s coverage of the panel.