Tag: Impact Investing

For the first time, the group founded by the Walmart heir details how it’s used investing, philanthropy and advocacy to further its lofty goals of environmental and societal transformation.

L ukas Walton’s Builders Vision, a giant in the world of impact investing, revealed for the first time Tuesday in a 57-page report how it had deployed $3 billion to slow climate change, promote sustainable farming and heal the world’s oceans, among other lofty goals.

The organization founded by the 37-year-old Walmart heir delivered a sobering message: as much as we’re trying, we can’t do it alone.

“We have a lot of capital to deploy, but these are trillion-dollar issues,” Builders Vision president Matt Knott told Forbes. “Even if we’re wildly successful in our own right, it wouldn’t be nearly enough. We need to get other investors and philanthropists to join us and dive into these transitions.”

Walton established Builders Vision as an umbrella for his philanthropic, investment and advocacy work in 2021. Today, the group’s assets include $2 billion in philanthropy, $2.05 billion in its investment arm S2G Ventures, and billions more (the group won’t specify the exact amount) in its asset-management firm, Builders Asset Management. To date, Builders Vision has invested in, financed or partnered with nearly 450 startups and organizations focused on environmental and societal change.

Among the achievements spotlighted in the report: the development of more than 170 sustainable products and technologies; the creation of over 42,000 jobs; the installation of 15,685 megawatts of renewable energy capacity, enough to power the states of Iowa and Michigan; and the mitigation, sequestration or avoidance of more than 4 million metric tons of carbon dioxide, equal to about 870,000 passenger cars.

Walton, a grandson of Walmart founder Sam Walton who inherited a fortune when his father John died in a 2005 plane crash, is worth $23.7 billion, according to Forbes. He has long focused on sustainability and environmental advocacy, and is the environment program committee chair at the Walton Family Foundation. He declined to speak with Forbes for this story, but explained his philosophy in a video that Builders Vision is releasing this morning. “I see a future in which there’s a realization of the ramifications of our decisions,” he said, “but that we have both the power and the opportunity and that we can realize alternative choices that we would be proud to share with our children.”

“Even if we’re wildly successful in our own right, it wouldn’t be nearly enough. We need to get other investors and philanthropists to join us.”

For the past year, Builders Vision, which calls itself an impact platform, has been working to detail the influences of its work, bringing together data from its portfolio companies and other partners from January 2020 to June 2023. Its largest focus is energy, with $1.8 billion in funding commitments. Builders Vision has also committed $1 billion to food and agriculture, and $260 million to healthier oceans.

The group has not disclosed financial returns. Rebecca Carland, Builders Asset Management’s chief investment officer, told Forbes by email that its public ESG equity managers have “collectively outperformed the global equity index by over 200 basis points annualized over the past decade,” while its impact venture capital managers are outperforming traditional VC benchmarks by “a wide margin.” A basis point is 0.01 of a percentage point; 200 basis points are 2 percentage points.

Builders Vision is trying to convince family offices and venture investors to follow its lead. Bill Gates’ Breakthrough Energy and Pierre Omidyar’s Omidyar Network have similarly been set up to use impact investments to tackle global problems.

Builders Vision’s direct investments run the gamut from U.K. microplastics filtration firm Matter to Kansas City, Kansas-based electric terminal-truck maker Orange EV. It counts a total of 166 partners in food and agriculture, 125 in energy and 158 in oceans.

“If you can find the right purpose-driven investments that are addressing real problems in the world, they’re going to be attractive investment opportunities,” said Knott, who previously was president of Feeding America and an executive at PepsiCo. Revealing the platform’s impact in its report, he said, “was important for us and we believe it will be important to catalyze resources into these issues from other organizations.”

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Organic Farming

Food and agriculture has been an area close to Walton’s heart. When he was three, he was diagnosed with a rare form of cancer, and after he failed to respond to chemotherapy his mother put him on an all-natural diet, a shift he believes contributed to his recovery.

In the report, Builders Vision said that it had mitigated, avoided or sequestered more than 3.1 million metric tons of carbon dioxide — the equivalent of 683,761 passenger cars — from its work in food and agriculture. It also developed at least 114 products or technologies that promote the production and consumption of healthy food, and it sustainably manages 2.6 million acres of land.

Among the group’s investments: Omaha-based Clear Frontier, which helps farmers transition from conventional methods to organic. Justin Bruch, a fifth-generation farmer from Iowa who holds an MBA from California State University, Fresno set up the firm in early 2019 after he made the switch himself.

Clear Frontier buys up farms that could go organic, then leases them to local farmers who’ve already farmed organically or want to learn how. A big stumbling block, he said, is that farmers are required to spend three years with no synthetics on their farmland to meet the requirements of the USDA’s organic program, yet farmland is generally rented on one-year leases. “No one wants to start a 36-month process and be a year into it and maybe the farm gets sold or rented to someone who pays a higher amount,” he said. “We’re trying to facilitate being the landlord who’s there for the long haul.”

Clear Frontier has more than 15,000 acres in Nebraska, Colorado and Texas, 30% of which is now certified organic with the remainder in transition.

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Clean Energy

Builders Vision’s largest dollar commitment is in clean energy. While the majority of funding has gone through fund managers, it has also invested directly in companies such as Electric Hydrogen, which has developed technology to produce green hydrogen, and Brimstone, which makes clean cement.

“Capital formation in the energy sector has been developing more rapidly,” Knott said. But while investors have flocked to the space, he said, there remain areas that haven’t received much funding. “We try to fund those white spaces,” he said.

The group focuses its venture investments on technologies that are ready to scale up, but where entrepreneurs may need help with commercialization or financing. At S2G, Builders Vision’s venture fund, “there’s a pragmatic focus on the next 10 to 15 years, and focusing on opportunities that can deliver big impact then,” said Frank O’Sullivan, S2G Ventures’ managing director, who oversees clean energy investments.

Of the $3 billion that Builders Vision has deployed to date, some 60% has gone to energy.

O’Sullivan pointed, for example, to the use of green hydrogen in the production of steel and ammonia, an area where Electric Hydrogen operates. “Even though it’s technically possible to produce green hydrogen and put it in an ammonia facility, those ammonia manufacturers aren’t able to say, ‘I’ll sign a 20-year, fixed-price agreement with you to have fixed-price hydrogen.’ That’s not their business model,” O’Sullivan said. “That misalignment between business models is an enormous friction point to making progress.”

In addition to installing 15,685 megawatts of renewable energy capacity last year, the group said it created nearly 26,000 new jobs in clean energy.

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Healthy Oceans

Tackling problems such as overfishing, the proliferation of microplastics and the extinction of marine species has largely been the work of charitable enterprises. Businesses set up to help oceans have been rare. “The idea was how do we bring innovation and business development into what has largely been a philanthropic space for oceans,” said Peter Bryant, program director of the oceans program at Builders Vision’s Builders Initiative division, who previously worked with Walton on environmental issues at the Walton Family Foundation.

Among the 31 companies focused on improving ocean resilience that have received backing are Atlantic Sea Farms, which produces locally harvested sustainable seaweed; Coral Vita, which uses a process called micro-fragmentation to restore coral reefs; and Moleaer, which cleans water with nanobubbles. It has also worked with the Port of San Diego to improve the shore’s resilience, including by launching 360 artificial reef balls made up of local sediment and oyster shells to prevent erosion.

Providing funds for companies that can scale up their technologies is a major focus. Moleaer, for example, developed a generator to make its microscopic bubbles, which can remain suspended in water for a long period of time, for use in industry. Its technology can be used to replace chemicals that kill algae in water treatment, provide alternatives to chlorine to wash fruit, and even in mines to more efficiently extract copper, a necessary material for electric vehicles. “It’s all about what these bubbles can do,” said Nick Dyner, the company’s CEO. Since 2016, the Carson, California-based startup has deployed nearly 2,500 nanobubble generators worldwide.

Since focusing on oceans, Builders Vision has worked to protect or restore 1.96 million hectares of marine and coastal habitats, roughly 33 times the size of Chicago; avoided, mitigated or sequestered 876,928 metric tons of carbon dioxide; and produced 18,124 tons of seafood, seaweed and other biomass in a sustainable way, nearly the annual seafood consumption of 1,000 people, according to its report.

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Measuring Impact

Tracking financial returns is one thing. Quantifying impact is much tougher. What even counts as success? “We know there’s no silver bullet here, and we’re just hoping to add to the evidence base,” said Joanna Cohen, Builders Vision’s head of impact measurement and management.

While Walton’s wealth makes Builders Vision one of the largest impact investors in the world, the group hopes to become bigger still, in terms of both dollars and influence. “I won’t give specific numbers, but I think it can be multiples of what we’re investing today,” Knott said. “And more importantly, I think we can attract multiples of that by having other investors join us on this journey.”