Food insecurity is a critical issue, and not just in the developing world. In the US, there are supply-side investments aimed at bolstering the production of milk and proteins where there are shortages, as well as improving storage and preservation time for fresh foods.
There are also companies on the demand side – for example, a business that helps Americans receiving Supplemental Nutrition Assistance Program benefits access their balances immediately. Start-ups, meanwhile, are busy focusing on developing new sources of nutrition. Private investor Fabrice d’Erm is working with a company that believes protein-rich algae are the answer. “If you don’t have the right nutrition, you can’t get the right education,” says d’Erm.
“Hopefully, using algae, we can solve a lot of the problems we have with nutrition around the world, while also reducing the CO² emissions associated with other types of food production.”
Oceans and clean water
The impact opportunity around oceans and clean water is extensive. It ranges from sustainable fisheries and aquaculture, to water purification technologies, water-reducing production processes, and products and services that reduce the use of plastic, and which therefore reduce the quantity of plastic ending up in the sea.
“One great example is Sky Ocean Ventures, set up by the Sky Group to invest in impact-driven organisations that have innovative solutions, new science and technologies that can create scalable solutions to address the global ocean plastic crisis,” says Chris Parsons of specialist impact investment bank ClearlySo.
However, Stephanie Krater of social impact consultancy the Bridgespan Group says the key challenge is that so many businesses have negative externalities that relate to clean water and clean oceans, and there has not always been a way to quantify or measure these. However, there is now work being done by Trucost, for example, which estimates the cost of using or polluting water that is supporting activity in this area.
Development finance institutions show how public-private partnerships can generate impact and returns — through direct investment in commercial enterprises and investment via private funds.
“DFIs have a strong role to play in building capacity and helping mobilise commercial investor capital towards areas that need investment most and that have the potential to create significant impact,” says Clarisa De Franco, managing director, funds and capital partnerships at CDC. “Many commercial investors may not feel comfortable yet with investing in the markets we target, but if we can address the challenges these economies face and create sustainable industries, other investors will come – it just takes time.”
And, as with any partnership, there are benefits on both sides. “There is much that other investors can learn from the experience of DFIs, and we can also learn from commercial investors,” says CDC deputy CIO of catalyst strategies, Yasemin Saltuk Lamy. She points to MedAccess, established to lower the cost and increase the availability of medical supplies in under-served markets, and Gridworks, a development and investment platform that targets transmission, distribution and off-grid electricity in Africa. Both have received around $200 million from CDC.