Invested In Climate

Impact investing in climate with Impact Engine, Ep #75

Nov 7, 2023

41:52

This episode focuses on impact investing and the particular approach of an impact investing firm based in Chicago named Impact Engine. Now that I’ve said the word impact four times, I should probably unpack the jargon. This class of investing aims to create direct, measurable social and environmental impact alongside a financial return. It’s related to, but distinct from ESG investing, which doesn’t necessarily have specific impact goals so much as it aims to avoid harm or risk by considering environmental, social and governance factors. Global impact investing has surpassed $1 trillion annually, and a top focus area is climate. According to a recent report by the Global Impact Investing Network, 74% of impact investors invest in climate action. So I was thrilled to zoom into the approach of one firm and learn about their climate investing strategy.

Today we’re joined by Impact Engine’s Partner & Chief Investment Officer Priya Parrish, as well as Chris Wu, a Vice President who leads their environmental sustainability investments. We talk about Impact Engine’s history, approach and investment thesis, it’s portfolio of investments in climate funds and private companies – from food tech to mobility to energy efficiency, how they see the climate investment space today and what they see coming next year. Lots of great insights in this peek into the impact investing world. Enjoy.

In today’s episode, we cover:

[4:06] Priya & Chris’ background, roles & how they came to do the work they're doing.
[5:01] What is Impact Engine & what sets it apart
[8:11] Impact Engine's client base
[8:47] Partnership with Alliance Bernstein & its significance
[10:58] Impact Engine’s investment thesis in climate explained
[12:01] Assessing the current market for climate investors
[13:43] Overview of invested funds & key criteria
[18:16] Utilizing an impact side letter & impact metrics reporting
[20:10] Relationships with larger venture & private equity funds
[21:05] The motivations behind direct investments in companies
[22:18] Spotlight on selected startups & their significance
[23:27] Insights on the food waste startup space & future investment prospects
[24:51] The goals & potential impact of Market Wagon
[26:24] Circuit’s impact & business potential
[29:19] Brightcore Energy's role in energy efficiency & its importance in climate transition
[30:59] Unique qualities of Brightcore Energy's team
[32:11] Updates on Brightcore Energy's progress
[33:50] Economic rationale behind the investment in Brightcore Energy
[34:34] Identifying major opportunity drivers for climate tech in the upcoming year
[38:00] Addressing blind spots and gaps in climate impact areas in the year ahead