"Calvert Impact Capital is a nonprofit investment firm that works with investors to move capital into communities around the world. By pooling investors’ capital, Calvert is able to make loans to mission-driven organizations that have significant social and/or environmental impact worldwide. As an intern on the investments team, I was tasked with working on the firm’s sustainable agriculture strategy, a newer impact sector of Calvert’s portfolio that was expected to grow in upcoming years. As part of this, I defined the nascent sector of sustainable agriculture by conducting a deep literature review and then also assessing the current market landscape. Afterwards, I mapped relevant players and types of investments in the sustainable agriculture sector, evaluating investment products, including blended finance instruments that can help mitigate some of the identified risks or challenges. After databasing relevant players suitable to Calvert’s risk appetite and impact strategy, I took investment meetings with potential deal pipelines. At the end of the summer, and after talks with experts and other firms working in sustainable agriculture, I was able to give Calvert’s investment team regional recommendations of how to approach sustainable agriculture opportunities, detailing where I believe Calvert will find the proper financial infrastructure for their investments and how to de-risk these.

Prior to my MBA experience, I had only heard of impact investing by name, but never truly understood the importance or depth of the industry until I took a class on investing in renewable energy, where I learned that impact investing is often the part of civil society that works to fill the gaps of public and private funding, and pushes new innovative models and technologies for impact forward. When I started my internship with Calvert Impact Capital, I had to deep dive into fixed income investment notes and debt markets, as Calvert Impact Capital takes investments into their Community Investment Note to finance high impact organizations through loans. I became familiar with concepts like additionality, guarantees, mezzanine debt, and more, all while also remembering the foundations of my modeling in corporate finance and other finance classes I had taken. With this, it became evident to me that without my MBA curriculum, I would not have been able to assess the blended finance tools being used in the sector, or understand the innovation it took to finance such impact deals. Many of the deals I was researching had complex structures to mitigate low returns and possibility of default, while also employing mechanisms, such as technical assistance and capacity building, to maximize impact. Some of the deals also did audits on lendees’ operations, highlighting the importance of performing financial and non-financial due diligence — a process I was familiar with from my Investing in Social Ventures class.

Some challenges I faced while creating the sustainable agriculture strategy were related to the sheer size, but also nascency, of the sector. Sustainable agriculture does not have one definition and encompasses production, consumption, agricultural technology, conservation and climate change mitigation and adaptation, and even ensuring social equity and sustainable livelihoods for its workers. As such, it is a massive space that highly differs from region to region and is highly dependent on access to labour, inputs, infrastructure, governing laws, environmental resources, technology, and more. In addition, since sustainable agriculture is still new to impact investors, not many players in the field have a solid strategy that will present a suitable return for our Community Investment Note investors while also ensuring proper and transparent impact measurements. Identifying a pipeline was thus very challenging as many financial intermediaries had low returns, were working in agriculture rather than sustainable agriculture, and/or did not collect the impact measurements Calvert hoped to report back to its donors. Despite this, the sector is rapidly evolving, with more and more investments popping up in emerging markets such as India, China, Vietnam, Ethiopia, and more. Understanding this, the database I created also became a live tracker of potential pipelines and collaborations for Calvert, with two potential deals of about $10M already identified.

At the end of my internship, I had not only gotten exposure to impact investing as part of the investor team, but also had knowledge on the client and impact side of the sector. At Calvert, I was exposed to portfolio meetings as they pertained to both receiving investments within specific sectors and also the due diligence process of giving out a loan. This helped me realize the breadth of professional opportunity that impact investing could offer — going into the sector did not have to be about building models alone, but also thinking about how to mitigate risks, creating impact frameworks, showcasing deal results, and building synergies and sector strategies. As someone who came to Business School to understand more about the private sector in order to bring back best practice to civil society, I found great value in my internship in impact investing. I was using my finance and strategy skills to create an investment strategy in sustainable agriculture, an innovative and upcoming sector that I found a new passion for and that I could see myself working in in the future."