Impact Investing: Hawai’i’s Ulupono Initiative

It could be argued that Hawai’i’s three main sustainability challenges are energy (90% diesel-powered), food (90% imported, mostly processed), and waste (limited landfill space). The Ulupono Initiative is a social investment organization, focused exclusively on addressing these three main challenges in Hawaii. Impact investing, as this phenomenon is called, is another option for funding green businesses. At the Asia Pacific Clean Energy Summit, Mr. Kyle Datta, General Partner, gave a presentation on what the organization does, and how this avenue can help fund projects with a triple bottom line focus.

The Ulupono Initiative helps to fund startups in Hawai’i that have a social mission. This isn’t charity, investments decisions are still made on the basis of risk versus reward. The founders may have a higher tolerance for risk than your average investor: the founding husband-and-wife team are the brains behind e-bay. Thus, they understand the “guy in his garage” model. But there’s still a realistic need for a return on investment.

Ulupono focuses on three main areas: more renewables, more locally produced food, and less waste, and all the projects must be based in Hawai’i to be considered.

Ulupono’s criteria for engagement:
1.    Focused on Hawai’i.
2.    Have the ability to ‘move the needle’ either with a large scale project or a replicable model.
3.    Offer appropriate reward for risk.

Thus far, the fund has invested in three energy companies: Hawai’i bioenergy, Sopogy, and ClearFuels Technology, Inc. Ulupono is looking to help scale these companies within Hawai’i to create local jobs and test the market, then they’ll expand to help scale revenues.

Because of their relatively small scale focus, impact investors like this really see the interconnectedness between many sectors. For example, feedmills can find an additional revenue stream with bioenergy production, which then helps animal husbandry companies succeed, which then produces fertilizer, which then helps local growers. No one industry stands alone.

Looking to catalyze change, Mr. Datta said that the company humbly understands that the expertise is here in Hawai’i, not in their office but with the entrepreneurs. What they’re looking to do is provide a collaborative approach: bringing Hawai’i’s companies together, providing resources and capabilities, and promoting new business models and technologies. “Ultimately here in Hawai’i, we’re competing with imports, whether it’s food or energy. Our costs are high in local production. To compete, we need to innovate [and cooperate]”, said Mr. Datta.

Scott Cooney is the developer of a new Triple Bottom Line, Monopoly-esque board game, and the author of Build a Green Small Business (McGraw-Hill).

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Scott Cooney, Principal of and author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill, November 2008), is also a serial ecopreneur who has started and grown several green businesses and consulted several other green startups. He co-founded the ReDirect Guide, a green business directory, in Salt Lake City, UT. He greened his home in Salt Lake City, including xeriscaping, an organic orchard, extra natural fiber insulation, a 1.8kW solar PV array, on-demand hot water, energy star appliances, and natural paints. He is a vegetarian, an avid cyclist, ultimate frisbee player, and surfer, and currently lives in the sunny Mission district of San Francisco. Scott is working on his second book, a look at microeconomics in the green sector.In June 2010, Scott launched, a sustainability consulting firm dedicated to providing solutions to common business problems by leveraging the power of the triple bottom line. Focused exclusively on small business, GBO's mission is to facilitate the creation and success of small, green businesses.

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