sign in sign up
<<
Home , Creative industries, Upstart (sculpture)

Impact Investing in the Creative Economy: diving deep into Ethical , Sustainable Food and Social Impact Media

Creatve people solve problems. Increasingly, In an efort to demystfy the creatve economy they are doing it beyond the studio, the for impact investors, impact fund managers and theater and the concert hall. Creatve people other stakeholders, this report dives deep into are harnessing the power of business and the three large and growing consumer industries marketplace to scale and sustain their ideas. within the creatve economy: fashion, food and media. These industries share the capacity to Many of the businesses that artsts, intrigue, engage, educate and actvate more and other creatves start balance fnancial mindful consumers so that the benefts of proftability with concern for the planet, ethical and sustainable supply chains and the their workers, and their . These full power of media to drive positve change can socially-focused companies seek capital from be realized. impact investors who understand the power of , , , heritage and creatvity to Creatve Economy Defned drive positve environmental and social impact. Together, investors and entrepreneurs can The “creatve economy” was defned by John grow the creatve economy to become more Howkins in 2001 as a new way of thinking and inclusive, equitable and sustainable. doing that revitalizes , services, retailing, and industries with

A Creatvity Lens: Impact Investng in the Creatve Economy 1 a focus on individual talent or skill, and art, The Opportunity culture, design, and innovaton. Concern by consumers about how their food, Today, creatve economy defnitons are clothes and entertainment are produced has typically ted to eforts to measure economic grown signifcantly in recent years. Human actvity in a specifc geography. A relevant set of well-being and planetary health may have art, culture, design, and innovaton industries been niche issues in the past, but have evolved is determined, and the economic contributon into mainstream trends. Consumers are of those industries is assessed within a region. demanding sustainable and ethical business A unique set of industries defnes each local practces from the companies they patronize creatve economy refectng the culture, and are votng with their wallets. Social media- traditons and heritage of that place. driven transparency makes it more difcult for companies to hide unfair treatment of workers, Based on research,1 Upstart Co-Lab perpetuate gender and racial bias, or mistreat identfed a set of industries comprising the the environment. creatve economy using the North American Industry Classifcaton System (NAICS). These But it’s not only about sustainability and ethics. NAICS codes describe businesses engaged Consumers are also demanding more engaging, in the inputs, producton, and distributon more authentc and a wider variety of products, of creatve products, services, experiences, experiences, and entertainment. Changing and platorms and can be summarized in fve demographics in the U.S. require companies categories: Ethical Fashion, Sustainable Food, to diversify their oferings to appeal to many Social Impact Media, Other Creatve Businesses more distnct audiences. has and Creatve Places.2 redefned the marketplace and made it possible to proftably cater to a range of consumer Please refer to page 5 for the defnitons of preferences and ofer customized products these categories. — with a compelling back-story to boot. Cross- cultural sharing spanning diverse traditons is recognized as a market opportunity.

1 Including research by the Creatve Economy Coaliton (CEC), a By defniton, Ethical Fashion, Sustainable working group of the Natonal Creatvity Network; the Natonal Endowment for the and the Bureau of Economic Analysis; Food and Social Impact Media businesses Americans for the Arts; the U.K. Department for Culture, Media and ; Nesta, a UK-based innovaton foundaton; and the intentonally address the signifcant United Natons Educatonal, Scientfc and Cultural Organizaton environmental challenges of their respectve (UNESCO). 2 www.upstartco-lab.org/creatvity_lens/naics-codes-creatve- industries. They also ofer safe and healthy businesses economic opportunites for workers across

A Creatvity Lens: Impact Investng in the Creatve Economy 2 socioeconomic strata — from food workers The Role of Impact Investng to fashion designers, seamstresses to The Ethical Fashion, Sustainable Food and developers, producton crew to 4-star chefs. But Social Impact Media sectors are growing unlike other social and sustainable companies, opportunites for impact investors. Dedicated these businesses also delight consumers with incubators and accelerators are helping creatve beauty, deliciousness, and entertainment, entrepreneurs develop and scale responsible connectng them to heritage, culture and and sustainable businesses. The expanding community. and improving universe of impact standards The Challenges help investors to target and measure their environmental and social results. Nonproft While enjoying signifcant market tailwinds, coalitons, industry groups and membership Ethical Fashion, Sustainable Food, and Social networks are the ecosystem for impact- Impact Media also face similar challenges: driven companies in these sectors. A growing • The lack of agreed-upon standards, body of academic studies, industry reports, and multple confictng standards, voluntary press coverage provide the fact base and stories accountability, and marketng labels that to validate what’s happening. So, it should sound like true environmental, health and not be surprising that more than 50 socially impact standards can confuse consumers responsible and impact funds invested in food, and generate skeptcism. fashion and media over the past 5 years. • Transparency and accountability require Impact investors are atracted to the creatve efort and in complex industries can be economy by its scale: global problems, big difcult to ensure. (But are crucial to avoid market opportunites, large consumer demand. customer critque of greenwashing or even Early impact investors in Ethical Fashion are worse — actual bad practces.) trying to reinvent the global around sustainability and improved livelihoods. • Consumer demand for rapid home delivery Sustainable Food investors are betng that new, of unique products from around the globe delicious and excitng products and experiences raises environmental and sustainability will translate to healthy people and a healthy questons in the food and fashion sectors. planet. Early movers in Social Impact Media • New products and services — especially see the power of stories from previously under- in the media sector — raise questons of represented voices to shape opinions and drive proftability and investor risk. acton, while simultaneously creatng quality jobs and economic opportunity.

A Creatvity Lens: Impact Investng in the Creatve Economy 3 Conclusion Upstart Co-Lab is connectng impact Beyond direct fnancial, environmental and investng to the $804 billion, 10 million- social benefts, the creatve economy has its job U.S. creatve economy. A key part own unique capacity to drive even greater of our feld-building is research impact. Fashion enables creatve expression on investment opportunites in the and allows each of us to convey our individual creatve economy. Please visit the identty. Food is a way we can share and blend Research secton of the Upstart Co-Lab our heritage and traditons. & TV and the (www.upstartco-lab.org) to new medium of video help us tell stories fnd our recent reports including: that both refect our history and shape the way HIDING IN PLAIN SIGHT: Impact we see our future. Investng in the Creatve Economy Investng in Ethical Fashion, Sustainable looks at more than 100 funds with $60 Food and Social Impact Media allows impact billion of aggregate assets that have investors to support the growth of companies been investng in the creatve economy that generate deep environmental and social over the past 5 years. impact — while joyfully inspiring us. It’s tme for Creatve Places and Businesses: impact investors to dive deep into the creatve Catalyzing Growth in Communites economy. reviews investable opportunites in the Creatve Economy with the potental to stabilize threatened communites and beneft regions looking to atract and develop quality jobs.

The Community Reinvestment Act and the Creatve Economy: Investng in Creatve Places and Businesses as Part of Comprehensive Community Development highlights the range of creatve places and business actvites which have benefted from CRA funding over the past 10 years.

A Creatvity Lens: Impact Investng in the Creatve Economy 4 THE CREATIVE ECONOMY DEFINED

ETHICAL FASHION Companies producing clothes, shoes, jewelry and accessories that proactvely address industry challenges related to labor, environmental impact, governance, and/or preservaton of . (e.g. fashion companies addressing job quality, working conditons and safety; fashion companies addressing resource conservaton or toxin reducton; fashion companies facilitatng local community engagement or cultural preservaton)

SUSTAINABLE FOOD Producers and providers of food and beverage products and experiences that proactvely address and raise consumer awareness of resource conservaton, preservaton of cultural heritage, and/or access to healthy food. (e.g. artsan and sustainable food & beverage producers and brands; , caterers, and other hospitality companies focused on these issues; any of these companies prioritzing quality jobs)

SOCIAL IMPACT MEDIA Companies that leverage the power of communicaton, storytelling and technology to drive positve social outcomes at scale, give a platorm to under-represented voices and/or build a diverse workforce. (e.g. flm and , video games, apps, new and old media that build awareness, skills, or knowledge; create community or give voice to underrepresented and marginalized groups; preserve cultural heritage; ofer quality jobs)

OTHER CREATIVE BUSINESSES Other facility, input, producton, and distributon businesses in arts, design, culture, and heritage industries that are run sustainably, provide quality jobs and have a social impact. (e.g. artsan handicraf businesses; sustainable businesses engaged in cultural preservaton and exchange; design-build frms ofering quality jobs)

CREATIVE PLACES Real estate projects that are afordable, target creatves or businesses in the creatve economy, and beneft their neighbors. (e.g. mixed-use developments anchored in the arts; afordable housing or workspace for artsts and creatves; ofces for arts organizatons and creatve businesses; incubators and accelerators for creatve economy businesses; fabricaton and light manufacturing ; arts-based senior housing; or cultural venues)

A Creatvity Lens: Impact Investng in the Creatve Economy 5 DEEP DIVE Ethical Fashion

Ethical fashion defned of global pestcide and insectcide , respectvely3 The fashion and apparel sector is comprised of companies and platorms that produce and sell • 20,000 liters of water is used to produce the clothing, footwear, jewelry, and accessories, as fabric for one t-shirt and a pair of jeans4 well as suppliers and partners working all along • Water-intensive producton methods divert the supply chain of those industries. needed resources from local communites 5 Global fashion and apparel today represents and account for 20% of global wastewater $3 trillion of economic actvity. It is 2% of • The most popular fabric used for fashion, global GDP, 4% in the U.S. If ranked alongside polyester, does not biodegrade; it also sheds individual countries’ GDPs, the global fashion microfbers, increasing levels of plastc in the and apparel industry would be the world’s world’s oceans and threatening marine life;6 seventh-largest economy.1 A key supplier of 1/3 of fsh globally have ingested microplastcs jobs and economic development, fashion and and other synthetc materials7 apparel employs 60-70 million people globally, • Fashion & apparel accounts for 10% of the partcularly in emerging economies. world’s carbon footprint and will drain a The fashion and apparel sector is also one quarter of the world’s carbon budget by 20508 of the leading causes of polluton and • Each year, more than 120 million trees are environmental degradaton worldwide, as well cut down to make clothing, contributng to as poor working and living conditons: widespread deforestaton9 • 8,000 harmful chemicals are used to turn raw • 15 million tons of textle waste are generated materials into textles2 each year in the U.S.10 • The 40 billion pounds of coton produced • The average American throws away nearly each year are responsible for 11% and 24% 70 pounds of clothing per year; globally 26

A Creatvity Lens: Impact Investng in the Creatve Economy 1 Upstart Co-Lab Deep Dive: Ethical Fashion

billion pounds of clothing end up in landflls made easier. As a result, the annually11 developing world was ofen exploited to meet ever-growing demand for cheap in the • Women — who make up 80% of the global U.S.15 garment workforce12 — are disproportonately exposed to unsafe working conditons (lack of Startng in the 1960s, popular movements fre safety, verbal abuse) brought awareness to human impacts on the • According to UNICEF and the Internatonal environment and exploitatve conditons faced Labor Organizaton, an estmated 170 million by farmers and factory workers around the children are currently working in the clothing world, culminatng in the frst Earth Day in 1970. industry all over the world13 These eforts eventually focused on the fashion and apparel industry. • As one example, Bangladeshi women garment workers on average work 60 hours/week, In the 1980s, Patagonia (the outdoor apparel earning the equivalent of $0.95/hour14 company founded in 1973) and Esprit (a fashion line founded in 1968) commissioned lifecycle Seeking to address the social and environmental assessments into the impacts of fbers used problems created by the fashion and apparel in their apparel. This catalyzed the practce of sector’s global footprint, the ethical and educatng consumers about fashion and apparel sustainable fashion movement focuses supply chains and sustainability. on energy usage, carbon emissions from producton, water usage, solid waste associated In 1991, Patagonia and Esprit co-founded the with packaging, and the carbon footprint of frst organic coton conference. Both companies shipping; job quality, working conditons and became known for putng sustainability safety; preservaton of cultural heritage; and at the forefront of their products. Esprit’s corporate governance including oversight, 1992 Ecollecton featured organic coton, accountability, and transparency. recycled and naturally processed , low impact dyes, and natural colors. Patagonia The ethical and sustainable began producing their polyester feece from fashion movement recycled plastc botles and pushed consumer In the post-World War II consumer boom, awareness through “don’t buy this jacket,” an advances in mass producton technology flled ad campaign that targeted over-consumpton. homes and closets of 1950s America with an These eforts foreshadowed the backlash unprecedented amount of new goods. U.S. against “fast fashion,” a contemporary policies made domestc manufacturing more strategy that encourages seasonal producton expensive, and internatonal trade agreements and consumpton to mirror the latest feetng

A Creatvity Lens: Impact Investng in the Creatve Economy 2 Upstart Co-Lab Deep Dive: Ethical Fashion

fashion trend, straining global resources and as non-existent or unenforced building and fre resultng in unprecedented waste. safety standards, best exemplifed by two tragic events in Bangladesh: the 2012 garment factory The 1990s also saw Nike as the target of mass fre at Tazreen Fashion which killed 112 women protests and boycots because of low wages (while all 11 employees were able and poor working conditons at their overseas to escape), and in 2013, the Rana Plaza building factories. Growing public outcry from similar collapse which killed more than 1,100 garment events at other major U.S. companies led workers. Created as a response to Rana Plaza, President Clinton in August 1996 to convene Fashion Revoluton Week garners industry-wide the Apparel Industry , consistng partcipaton in a campaign enttled “Who made of brands, NGOs, and trade unions, to my clothes?” to shine a spotlight on industry develop industry standards to hold companies workers and their working conditons.19 accountable for conditons in the factories where their goods were produced.16 Now Today, more than a dozen coalitons of business known as the Fair Labor Associaton (FLA), leaders, academics, and governments advance the organizaton is currently comprised of sustainability and ethical concerns within 33 major companies (including Adidas, Hugo the global fashion and apparel industry. (See Boss, New Balance, Nike, Patagonia, PVH, and Appendix A.) The work of these organizatons is Patagonia) whose compliance programs are complemented by regularly published research voluntarily accredited by the FLA, ensuring the and reportng. (See Appendix B.) “presence of systems and procedures required These eforts have contributed to progress, for successfully upholding fair labor standards’ partcularly related to improving environmental throughout brands’ supply chains,”17 per FLA’s sustainability. Companies are experimentng Code of Conduct.18 with a variety of optons to address consumer The early 2000s saw the frst encounters or demand for greater sustainability, such as intersectons of ethical and sustainable fashion developing new technology. Dupont has with luxury and celebrity culture, with the made a biodegradable polyester.20 Modern introducton of New Fashion Week’s Green Meadow has a made from yeast.21 Shows, as well as the birth of Livia Firth’s Green Thread Internatonal supplies fabric made from Challenge, utlizing the platorm of discarded plastc botles.22 award shows’ red to bring ethical and Big global companies have also been moving to sustainability issues into the mainstream. more sustainable inputs. As one example, H&M Unfortunately, issues of poor working (the Swedish fast fashion retailer) and Inditex conditons persisted including negligence such (the parent company of Zara, the Spanish fast

A Creatvity Lens: Impact Investng in the Creatve Economy 3 Upstart Co-Lab Deep Dive: Ethical Fashion

fashion retailer) were among top fve users of performance, and transparency, organic coton23 by volume in 2016. studies (such as one by Oxfam Australia28) illustrate how entrenched inequites are, and Reducing waste and encouraging that litle has changed regarding minimum are also part of the soluton. Nike’s Flyknit wages to enable decent living conditons.29 technology24 produces 60% less waste than traditonal cut-and-sew methods. Patagonia, Relevant trends in fashion Eileen Fisher, and Renewal Workshop all have and apparel programs in which they fx and resell used artcles of clothing.25 Companies like Ralph Current changes in retail shopping will afect Lauren have recently hired Chief Sustainability fashion and apparel. These changes include Ofcers to link sustainability to business acquisitons of niche brands by industry leaders, strategy.26 Moreover, at the 45th G7 summit in personalizaton and customizaton of products, Biarritz, France, Kering — along with 32 major showroom-style storefronts to aid the online fashion companies — presented sustainability shopping experience, the rise of the private commitments to French President Emmanuel label, and online marketplaces functoning like Macron. The companies have commited to brick and malls by consolidatng leading reduce carbon emissions by 2050, seek out brands.30 sustainable sourcing of major raw materials Equity analysts note good prospects for the and use 100% renewable energy for key U.S. fashion and apparel sector overall. The manufacturing processes throughout their U.S. textle-apparel industry, currently ranked supply chain. They have also agreed to in the top 39% of all industries by Zacks eliminate single-use plastc by 2030, invest in Investment Research has “promising prospects eliminatng microfber polluton and support for investors in 2019.”31 U.S. macro-economic moves to control the release of plastc pallets in conditons combined with company strategies their fbers and packaging.27 of keeping pace with evolving consumer While corporate innovaton has led to trends, internatonal expansion, and brand improvements on the environmental side of enhancement eforts have resulted in “solid the equaton, less progress has been made earnings trends” for many companies in the regarding the social conditons of the global industry.32 apparel workforce. Georg Kell, former Executve Women’s Wear Daily noted strong stock price Director of the United Natons’ corporate growth in recent years across a number of sustainability initatve, the UN Global Compact, major U.S. companies, including Estée Lauder, has described that while leading brands PVH, Gap, Abercrombie, Guess, and Michael have commited to safer factories, tracking

A Creatvity Lens: Impact Investng in the Creatve Economy 4 Upstart Co-Lab Deep Dive: Ethical Fashion

Kors, even compared to the historically bull the uniqueness of artsan producton market overall.33 As of June 27, 2019 each of and stories of the origin of their clothes. these stocks were rated “buy” or “hold” as Blockchain-enabled industry tools34 that summarized from analyst guidance by Yahoo goods through the producton cycle, Finance. and consumer-facing tools such as those outlined in Mashable’s “5 tools to check if Two trends currently shaping fashion and your clothing is ethically made”35 make it apparel overall put ethical and sustainable possible for brands to back up their ethical brands in a positon to deliver superior fnancial and sustainable stories with facts. Brands and social returns for impact investors: that superfcially appropriate culture or Consumer Experience: The choice and demonstrate cultural insensitvites are convenience of online commerce makes exposed to large consumer backlashes — it all the more important that retailers such as when Gucci faced severe critcism diferentate themselves through unique for an oversized sweater collar that concepts and memorable customer resembled blackface makeup.36 Fashion experiences. The fashion and apparel sector has always been a for the wearer’s is already savvy to this, led by Rent the own creatve expression. Social media is Runway, which brings the sharing economy also opening up new avenues for visual to your closet; Birchbox, Trunk Club, and storytelling and amplifying both the reach Sttchfx, which feature customized expert and speed at which informaton fows. wardrobe curaton on a subscripton basis; Increasingly, fashion also refects the and Bonobos’ showrooms which serve as customer’s ethical and sustainable lifestyle. personalized ftng rooms for the online store. Online marketplaces that gather Challenges to scaling ethical and together ethical and sustainable fashion sustainable fashion brands provide convenience, create While there are compelling reasons for the community, and help educate consumers fashion and apparel sector to adopt more on how to align their shopping with their ethical and sustainable practces — and there values. has been signifcant progress — there are stll Story Behind the Purchase: Consumers barriers that must be addressed: are increasingly basing their purchasing Nascent Consumer Demand: Unlike organic decisions on the authentc story of a brand and locally sourced food, which by 2015 and its products. Ethical and sustainable had grown and democratzed to almost $40 fashion companies can bring consumers billion in U.S. sales,37 consumer demand for

A Creatvity Lens: Impact Investng in the Creatve Economy 5 Upstart Co-Lab Deep Dive: Ethical Fashion

ethically and sustainably produced fashion on the full environmental and social impact is stll in early stages. Some estmates put of the fashion and apparel sector from the demand at $5 billion, up from around throughout the ecosystem of farmers, $1 billion just a decade ago. 65-70% of fnishing mills, cut-and-sew factories and consumers under age 35 around the world others.41 Sector organizatons report report that they will choose brands or radically diferent informaton based on retailers based on their ethical practces.38 their sources and collecton methods. There are indicatons that ethical fashion will As a result, there remains a signifcant become bigger than organic food,39 but that lack of reliable data which restricts the tme is stll some way of. However, some promulgaton of ethical and sustainable studies are showing that consumers are fashion sector regulatons and norms. willing to pay a premium for handcrafed, ethically produced or sustainable fashion. Impact investng in ethical and sustainable fashion Voluntary Accountability: Even members of the Sustainable Apparel Coaliton40 Impact investors who care about the are slow to adopt impact measurement environment, quality manufacturing jobs practces. Among fashion and apparel and fair trade; who are applying a gender companies currently assessing their social lens focusing on benefts specifc to women and environmental impacts, there is litle and girls; or who are employing the newly- evidence that the informaton is being introduced creatvity lens42 spotlightng impact used to improve business practces. Since potental in creatve places and businesses, can this company impact data is not publicly all agree on investng in ethical and sustainable available, there is no real accountability. fashion.

On-line Shopping and the Environment: Upstart Co-Lab’s recent landscape analysis As consumer demand grows, the ethical of 100 impact investment funds actve in the sustainable fashion sector will need to creatve economy revealed that 27% invested address the inherent tension in shopping in ethical and sustainable fashion. These funds online for sustainably-produced products. represent an estmated $7.6 billion in total Direct to consumer delivery creates AUM. A few notable examples include Alante signifcant negatve environmental impacts Capital, a NY-based venture capital fund focused due to packaging, air freight, and exclusively on sustainability in the textle & consumpton. apparel industry; Fashion Capital Partners, a Parisian fashion-tech investment frm; Textle Lack of data: It is complex to gather data Innovaton Fund, a Netherlands-based frm

A Creatvity Lens: Impact Investng in the Creatve Economy 6 Upstart Co-Lab Deep Dive: Ethical Fashion

focused on textles; and Closed Loop Ventures, Natve American artsans in the southwest. a venture fund promotng the circular economy The presence of 96 B Corporatons in the U.S. whose portolio companies include numerous in Apparel, Footwear, and Accessories suggests fashion and apparel companies. there may be more investment opportunites Ashoka and C&A Foundation recently in the future for investors seeking to be socially announced a new seed fund for sustainable responsible and have impact. fashion.43 Venture capital funds Patamar These B Corporatons include the athleisure Capital and Kinara Indonesia are “fnding brand Athleta, shoe brand Allbirds, and popular value in companies that fght fast fashion, clothing companies like Eileen Fisher and protect worker rights and pay workers well, Patagonia. (See Appendix C for other examples are focused on environmental sustainability, of emerging ethical and sustainable fashion use local talent and ensure the sustainability brands.) of culture, promote recycling, energy efciency and waste eliminaton, and use Building the feld are business accelerators innovatve technology that help stakeholders preparing ethical and sustainable fashion be more efcient.”44 Vinted, the internatonal entrepreneurs to atract impact capital. Fashion marketplace for second-hand fashion, recently for Good’s Plug and Play Accelerator is a 12- announced a raise of €50 million as reported week program for startups driving innovaton on ImpactAlpha.45 in sustainability, circularity, and transparency. The Apparel Impact Insttute — a collaboraton Upstart’s analysis of more than 120 companies of industry stakeholders co-founded by the and funds raising impact capital with a focus Sustainable Apparel Coaliton — selects, on the creatve economy includes 22 funds funds, and scales high impact projects. Angel and companies with a focus on ethical and networks focused on investng in ethical and sustainable fashion, collectvely raising more sustainable fashion, such as the NEXUS Lab on than $208 million through 2019. This pipeline Ethical Fashion for Next Gen impact investors, includes: Accompany, a mult-channel retail are also developing. Some investors, like the lifestyle brand marrying design and social Cordes Foundaton, are even making ethical impact; Himalayan Wild Fibers, producer of fashion a pillar of their impact strategy.46 (See natural raw materials for textle supply chains Appendix D for more Funds, Accelerators and that serve the high-end apparel industry; Angel Networks.) Ziel, featuring custom actvewear collectons designed and delivered on-demand reducing The world’s largest annual conference for waste and excess inventory; and Etkie, a impact investors and social entrepreneurs, retailer of ethically handcrafed jewelry by SOCAP,47 consistently includes ethical and

A Creatvity Lens: Impact Investng in the Creatve Economy 7 Upstart Co-Lab Deep Dive: Ethical Fashion

sustainable fashion as part of its program. accountability. Given that the majority of Past sessions have included: “The 2.5 trillion workers in the fashion and apparel industry are challenge hanging in our closets: Can the women, gender lens consideratons are highly fashion industry become a source for good?” applicable as well. and “Ethical Fashion Meets Global Markets.” SOCAP18 featured the fashion ecosystem Conclusion as a “massive investment opportunity” for a Seasoned impact investors are already putng restoratve and regeneratve economy as part impact capital to work in ethical and sustainable of a discussion on the Circular Economy. fashion. The sector is widely recognized as an emerging fronter with massive impact Measuring the Impact of ethical and proft potental. Those who care about and sustainable fashion shaping a creatve economy that is inclusive, Coalitons of like-minded actors are helping to equitable, and sustainable will fnd numerous develop and implement measures for ethical opportunites to deploy their values-aligned and sustainable fashion in the U.S. and around capital in fashion across industry category (eg. the world. As part of these eforts, they are apparel, footwear, accessories) and impact area developing specialized metrics that touch on (eg. environment, gender, human rights). each stage in the fashion value chain, ofering Ethical and sustainable consumer brands are investors the opportunity to align with impact creatng the “storefront” into which the ethical areas including climate change, water use, and sustainable supply chain of farmers and deforestaton, soil degradaton, animal welfare, other fashion and apparel producers sells. consumer waste, corrupton and more. These These companies play a crucial role in front-line assessment systems are constantly evolving consumer educaton, helping their customers to refect advancements within the fashion understand and value the diferentaton that industry, as well as within environmental, comes from a producton process that treats social and governance (ESG) and sustainability workers, the community and the environment reportng overall. (See Appendix E.) well. Fashion and apparel items that are Investors focused on ethical and sustainable sustainably and ethically produced make it fashion can use general impact assessment possible for customers to align their values with tools including IRIS,48 B Analytcs49 and the their wallets — and do it in style. GIIRS50 portolio ratngs system. These tools focus on environmental impacts, fair trade and worker consideratons, impacts on the local community, and governance and

A Creatvity Lens: Impact Investng in the Creatve Economy 8 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix A: Ethical Fashion Organizatons

Copenhagen Fashion Summit The world’s largest event on sustainability in fashion for industry decision-makers Ecoluxe London A biannual exhibiton during London Fashion Week showcasing sustainable and ethical designers The Ethical Fashion Initatve Program of the Internatonal Trade Centre, a joint agency of the United Natons Conference on Trade and Development (UNCTAD) and World Trade Organizaton (WTO) that works with artsans living in urban and rural poverty to with the global fashion chain Fair Fashion Center Organizaton seeking to prove the business case for sustainability in the fashion industry through its comprehensive fair fashion guide and analytcal tool Fashion Revoluton A global grassroots movement working to radically change the way clothes are sourced, produced and consumed Fashion Takes Acton Canada’s fashion industry organizaton focused on sustainability Greenpeace Transnatonal organizaton orchestratng research and actvist campaigns, including Detox My Fashion Global Fashion Agenda Global leadership forum on fashion sustainability founded in 2016 anchored by founding strategic partners Kering, H&M, Target, BESTSELLER, Li & Fung and the Sustainable Apparel Coaliton Internatonal Labour UN agency that brings together governments, employers and workers to set Organizaton & The Beter labor standards, develop policies and devise programs promotng decent Work Program work for all people with substantal focus on workers in textles, clothing, leather, and footwear sectors Labour Behind the Label Campaign that works to improve conditons and empower workers in the global garment industry Love Your Clothes UK-based campaign that supplies consumer informaton for each stage of customer and product lifecycle Clean by Design Natonal Resources Defense Council’s initatve to encourage textle manufacturers to reduce polluton Nest Nonproft building a new handworker economy to increase global workforce inclusivity, improve women’s wellbeing beyond factories, and preserve important cultural traditons around the world

A Creatvity Lens: Impact Investng in the Creatve Economy 9 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix A contnued

Remake Nonproft sales and media platorm ignitng conscious consumer movement; Provides original documentary footage; shares facts and stories around fast fashion; sells curated collectons focused on women and the planet Responsibility in Fashion Industry group working to end the industry’s reliance on toxic chemicals, hazardous pestcides and inhumane practces Sustainable Apparel Coaliton Global alliance of retailers, brands, suppliers, advocacy groups, labor unions and academics coming together specifcally to develop an industry-wide index to measure the environmental and social impacts of the apparel industry. It counts more than 175 members in its ranks, or 40% of the global apparel industry Textle Exchange Global membership organizaton of textle suppliers, providers, manufacturers, brands and retailers and farmers founded in 2002 driving industry transformaton in preferred fbers, standards, and supply networks UN Alliance for Initatve of UN agencies and allied organizatons to drive coordinated acton Sustainable Fashion in the sector to make fashion a driver of implementaton of the Sustainable Development Goals World Resources Insttute Global research organizaton working on critcal goals to secure a sustainable future regarding climate, energy, food, forests, water, cites, and transportaton, with fast fashion and the global apparel industry as an emerging research focus

A Creatvity Lens: Impact Investng in the Creatve Economy 10 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix B: Reports and Artcles on the Impact of the Fashion Industry

Accenture in collaboraton with the H&M Foundaton, KTH Royal Insttute of Technology, and the Global Change Award, The Future of Sustainable Fashion, 10 April 2017 Annual report concurrent with the award addressing the queston: “What can we learn about the future of sustainable fashion by looking at disruptve ideas from 130 diferent countries?” www.accenture.com/t20170410T044051Z__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/ Documents/Global/PDF/Consultng/Accenture-HM-Global-Change-Award-Report.pdf Andrew Morgan, dir. The True Cost, Life is My Movie Entertainment and Bullfrog , May 29, 2015. Groundbreaking documentary flm about the clothes we wear, the people who make them, and the impact the environmental and social costs of the fashion & apparel industry www.truecostmovie.com Boston Consultng Group and Global Fashion Agenda, The Pulse of the Fashion Industry, 2018 Argues that improving social and environmental performance of the fashion industry would add €160 billion to the global economy by 2030 www.globalfashionagenda.com/pulse/ Deborah Drew and Genevieve Yehounme, The Apparel Industry’s Environmental Impact in 6 Graphics, World Resources Insttute, 5 July 2017 Data visualizatons illustratng why the apparel industry must a new approach to sustainably meet demand in tomorrow’s markets www.wri.org/blog/2017/07/apparel-industrys-environmental-impact-6-graphics Gladys Lopez-Acevedo, Raymond Robertson, Sttches to Riches? Apparel Employment, Trade, and Economic Development in South Asia, World , 2016 Report investgatng South Asia’s potental for expanding and improving jobs in the labor-intensive apparel sector with specifc policy recommendatons www.worldbank.org/en/region/sar/publicaton/sttches-to-riches-apparel-employment-trade-and-economic- development-in-south-asia McKinsey & Company, The State of Fashion, 2018 Annual report on the fashion industry at large; cites “sustainability credibility” as a top industry trend with 42% of the top 100 large fashion brands already disclosing supplier informaton www.mckinsey.com/industries/retail/our-insights/renewed-optmism-for-the-fashion-industry Nature Climate Change, The Price of Fast Fashion, Editorial, Vol 8, January 2018 Editorial alertng consumers to the growing environmental footprint of fast fashion www.nature.com/artcles/s41558-017-0058-9

A Creatvity Lens: Impact Investng in the Creatve Economy 11 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix B contnued

Sandra Roos, Environmental assessment of Swedish fashion consumpton, Mistra Future Fashion, June 2015 PhD student at Chalmers Insttute of Technology, Sweden; performed one of the most comprehensive life cycle analyses ever completed through evaluaton and comparison of fve diferent items: t-shirt, pair of jeans, a dress, a jacket, and a uniform. www.mistrafuturefashion.com/wp-content/uploads/2015/06/Environmental-assessment-of-Swedish-fashion- consumpton-LCA.pdf See also: Nathan Hurst, Smithsonian.com, 4 April 2017, “What’s the environmental footprint of a t-shirt?” www.smithsonianmag.com/innovaton/whats-environmental-footprint-t-shirt-180962885/ Sarah Berner, David Dietz, Fashion is Old Fashioned: Disrupton, sustainability and investment opportunity in the fashion and apparel industry, Grattude Railroad and NEXUS Ethical Fashion Lab, January 2018 White paper geared towards investment audience describing the current state of the global fashion industry and highlightng key trends and companies that are pushing the industry towards a greater focus on sustainability www.nexusglobal.org/wp-content/uploads/2018/01/Investng-in-Sustainable-Fashion_high-res.pdf Sereen Sumner, Fashion Industry’s Carbon Footprint Wearing on Our Environment, Climate Acton Business Associaton, February 2018 Overview of environmental impacts of fashion and examples of eco-friendly brands www.cabaus.org/2018/02/22/fashion-industrys-carbon-footprint-wearing-environment/ Vanessa Friedman, Fashion’s Latest Trend: Eco Bragging Rights, The Times, 10 October 2019 Coverage from 2019 fashion month in New York, London, Milan and Paris arguing that “sustainability was the hotest look of the day” www.nytmes.com/2019/10/10/style/fashion-lvmh-kering-sustainability-competton.html

A Creatvity Lens: Impact Investng in the Creatve Economy 12 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix C: Ethical Fashion Investment Funds, Accelerators, Investor Networks

Alante Capital VC fund backing companies that radically improve social and environmental sustainability in the textle and apparel industry Apparel Impact Insttute A collaboraton of industry stakeholders to select, fund and scale high-impact projects that improve the sustainability outcomes of the apparel and footwear industry; co-founded by the Sustainable Apparel Coaliton Closed Loop Ventures VC investng in sustainable consumer goods companies, advanced recycling , and services related to the circular economy Fashion Tech Lab Connects women-led, fashion-focused technology companies with fashion retailers Fashion Capital Partners Paris-based investment fund dedicated to fashion-tech Factory45 Online accelerator program taking sustainable fashion companies from idea to launch Heva Fund Impact fund that invests in the transformatve social and economic potental of the creatve economy in East Africa with a focus on fashion Nexus Fashion Lab Forum for NEXUS members to learn more about ethical fashion Plug and Play - Accelerator based in Amsterdam focused on social and environmental Fashion for Good impact within the fashion industry Textle Innovaton Fund Netherlands-based venture fund that focuses on innovatve companies in the textle sector, including fber technology, digital applicatons, and supply chain

A Creatvity Lens: Impact Investng in the Creatve Economy 13 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix D: Representatve Ethical Fashion Companies

A Peace Treaty Brand NYC-based Dana Arbib, champion of slow fashion and collaboraton with artsan groups Accompany Platorm Platorm for artsan-made and fair-trade apparel, accessories and home goods. (B Corp) Ecoalf Brand Transforms waste into fashion products; made from entrely recycled materials; 10% of sales goes to its clean oceans foundaton Etkie Brand Jewelry and accessories company celebratng traditonal Natve American crafsmanship. Working with women living on reservaton communites in New Mexico, their collectons are sold in over one hundred high-end boutques across the globe Everlane Brand Focused on a concept of “radical transparency” they brand works with the entre supply chain to source ethical and sustainable made garments for both men and women Evrnu Supplier Textle R&D company that transforms post-consumer coton waste into a high- quality cellulosic fber, connectng textle waste stream to the supply chain Indigenous Brand Artsan-made, luxury, eco-friendly fashion; a B Corp fnanced by RSF Social Finance, Root Capital, among others Intmately.co Brand Startup designing lingerie for women with disabilites; part of growing ‘adaptve apparel’ movement51 Izzy Lane Brand Britsh luxury brand focused on animal welfare, hand printed paterns and natural dyes Mara Hofman Brand Designer focused on sustainable materials, processes and producton to improve and extend each garment’s life Maison du Mode Platorm Luxury ethical fashion retailer founded in 2012 Melissa Joy Manning Brand Earrings, rings, necklaces, and bracelets handcrafed by ethical artsans in CA and NY Naadam Cashmere Brand Sources and produces luxury knitwear while preserving nomadic lifestyle in Mongolia Novica Platorm Online platorm that connects artsans to a global marketplace of socially conscious customers in associaton with Natonal Geographic Positve Luxury Platorm Curated platorm for luxury brands that demonstrate social and environmental impact; developer of Buterfy Mark certfcaton

A Creatvity Lens: Impact Investng in the Creatve Economy 14 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix D contnued

Reformaton Brand Sustainably and ethically produced womenswear Renewal Workshop Supplier Manufacturer using discarded apparel and textles to produce new artcles at scale and generate data for brand partners thredUP Platorm Large online consignment and thrif store Veja Brand Paris based brand of ecological and fair-trade footwear and accessories that works with producer cooperatves and social associatons

This is an illustratve — not exhaustve — sample of emerging brands, platorms and suppliers.52

A Creatvity Lens: Impact Investng in the Creatve Economy 15 Upstart Co-Lab Deep Dive: Ethical Fashion

Appendix E: Ethical Fashion Measures and Standards

Fashion Revoluton (www.fashionrevoluton.org) produces a transparency index of the top 100 global fashion companies. Good on You (www.goodonyou.eco) is an online resource and mobile app that provides ethical brand ratngs for 2,000 fashion brands using a methodology53 that rates brands on how they treat their workers, the environment and animals. Nest (www.buildanest.org) has developed a set of standards54 as well as a brand seal to ensure ethical compliance for workers in homes or small workshops including fashion, apparel and accessories. These tools are designed to further industry-wide transparency in a system of decentralized supply chains to make sure workers are treated fairly and that their cultural heritage is fully valued. The New Standard Insttute (www.newstandardinsttute.org) is a global community driving the fashion industry to achieve science-based environmental & social targets around climate change, producton, consumpton and waste, ocean polluton, and labor and gender issues. NSI’s Informaton Platorm is a web- based destnaton open to all that will serve as a global resource for the industry and its stakeholders which will include credible facts, research and reports, innovatve companies advancing environmental and labor solutons, organizatons in the space and industry conferences and events advancing sustainability. NSI was born out of the platorm Zady, whose New Standard manifesto set out to revolutonize the fashion industry through consumer educaton behind common textles and materials including coton, linen, wool, alpaca, cashmere and polyester. The Sustainability Accountng Standards Board (www.SASB.org) is an independent nonproft that provides sustainability accountng standards for use by publicly-listed corporatons in the U.S. in disclosing material sustainability informaton for the beneft of investors and the public. SASB identfes sustainability disclosure topics for the Apparel, Accessories & Footwear industry:55 Management of chemicals in products, labor conditons in the supply chain, sourcing & innovaton, environmental impacts in the supply chain. The Sustainable Apparel Coaliton (www.apparelcoaliton.org) Higg Index is a suite of tools that enables brands, retailers, and facilites to accurately measure and score sustainability performance. Scores are intended to incentvize businesses to take acton protectng the well-being of factory workers, local communites, and the environment along each step of their value chain. The Higgs Index consists of product tools56 to assess a product’s sustainability; facility tools57 to assess environmental and social conditons in manufacturing facilites; and a brand tool58 to assess sustainability of product lifecycles, environmental performance, and impacts like greenhouse gas emissions, energy use, water use, water polluton, deforestaton, hazardous chemicals, and animal welfare.

A Creatvity Lens: Impact Investng in the Creatve Economy 16 Upstart Co-Lab Deep Dive: Ethical Fashion

Acknowledgements Thank you to the following individuals for their contributons to this study: Dhanya Balasubramanian, @pap.reeka Maxine Bedat, The New Standards Insttute Kevin Eckerle, NYU Stern Center for Sustainable Business Cara Smyth, Fair Fashion Center Eric Stephenson, Align Impact Steph Stephenson, Cordes Foundaton Chris van Bergen, Nest Rebecca van Bergen, Nest

Upstart Co-Lab Advisory Board Cathy Clark, Director of CASE i3, Fuqua School of Business, Duke Jed Emerson, Chief Impact Strategist, ImpactAssets Jonathan Law, Partner, McKinsey & Company Will Rosenzweig, Co-founder and Managing Partner, Physic Ventures Surita Sandosham, Executve Director, Heartland Alliance Internatonal Andrew Stern, Founder and Executve Director, Global Development Incubator Dennis Whitle, CEO, Feedback Labs

Upstart Co-Lab Team Laura Callanan, Founding Partner Ron Anahaw, Program Assistant Nam Phuong Doan, Program Administrator Sarah Lang, Associate Ward Wolf, Senior Associate

This study was authored by Ward Wolf and Laura Callanan.

A Creatvity Lens: Impact Investng in the Creatve Economy 17 Upstart Co-Lab Deep Dive: Ethical Fashion

Endnotes

1 www.fashionunited.com/global-fashion-industry-statstcs 2 www.cen.acs.org/artcles/93/i41/Cutng-Textle-Polluton.html 3 www.cabaus.org/2018/02/22/fashion-industrys-carbon-footprint-wearing-environment/ 4 www.thetmes.co.uk/artcle/q-how-much-water-does-it-take-to-produce-a-t-shirt-and-a- pair-of-jeans-a-20000-litres-w90zwbldpcp 5 www.unenvironment.org/news-and-stories/story/putng-brakes-fast-fashion 6 www.theguardian.com/sustainable-business/2017/jun/29/microfbers-plastc-polluton-apparel- oceans 7 www.theguardian.com/environment/2016/jun/20/microfbers-plastc-polluton-oceans-patagonia- synthetc-clothes-microbeads 8 www.downtoearth.org.in/news/environment/fashion-industry-may-use-quarter-of-world- s-carbon-budget-by-2050-61183 9 www.ran.org/issue/out_of_fashion/ 10 www.thebalancesmb.com/textle-recycling-facts-and-fgures-2878122 11 www.cleanclothes.org/resources/publicatons/factsheets/general-factsheet-garment-industry- february-2015.pdf 12 www.cleanclothes.org/resources/publicatons/factsheets/general-factsheet-garment-industry- february-2015.pdf 13 www.listverse.com/2017/03/17/10-truly-troubling-facts-about-the-clothing-industry/ 14 www.sustainablebrands.com/news_and_views/supply_chain/sustainable_brands/garment _worker_diaries_reveal_working_conditons_wage 15 www.triplepundit.com/special/sustainable-fashion-2014/brief-history-sustainable-fashion/ 16 www.fairlabor.org/blog/entry/bridging-divides-greater-good-taking-lesson-president- clinton%E2%80%99s-vision-reforming-us 17 www.fairlabor.org/accreditaton 18 www.fairlabor.org/our-work/code-of-conduct 19 www.fashionrevoluton.org/about/ 20 www.theatlantc.com/science/archive/2017/09/modern-meadow-lab-grown-leather/540285/ 21 www.theatlantc.com/science/archive/2017/09/modern-meadow-lab-grown-leather/540285/ 22 www.threadinternatonal.com/our-process/ 23 www.about.hm.com/en/sustainability/sustainable-fashion/materials/coton.html 24 www.news.nike.com/news/sustainable-innovaton 25 www.eco-business.com/opinion/what-we-knowand-need-to-knowabout-sustainable-fashion/

A Creatvity Lens: Impact Investng in the Creatve Economy 18 Upstart Co-Lab Deep Dive: Ethical Fashion

26 www.environmentalleader.com/2019/06/ralph-lauren-names-1st-chief-sustainability-ofcer- backs-goals-with-senior-leadership/ 27 www.voguebusiness.com/companies/kering-francois-henri-pinault-industry-pact-climate- emergency 28 www.whatshemakes.oxfam.org.au/wp-content/uploads/2017/10/Living-Wage-Media-Report_ WEB.pdf 29 www.forbes.com/sites/georgkell/2018/06/04/can-fashion-be-sustainable/#f640d53412b7 30 www.retaildive.com/news/7-trends-that-will-disrupt-and-defne-retail-in-2018/514064/ 31 www.zacks.com/commentary/366571/textle---apparel-industry-outlook-prospects-radiant 32 www.zacks.com/stock/news/287091/4-apparel-stocks-likely-to-cruise-ahead-of-industry-in-2018 33 wwd.com/business-news/fnancial/13-best-worst-fashion-retail-and-beauty-stocks-11083101/ 34 www.forbes.com/sites/samantharadocchia/2018/06/27/altering-the-apparel-industry-how-the- blockchain-is-changing-fashion/#2d14d4ba29f 35 www.mashable.com/2015/04/24/ethical-fashion-tools/#B88osX4tUuq1 36 www.nbcnews.com/news/us-news/retailers-fashion-brands-struggle-racial-insensitvity-n972601 37 www.ota.com/resources/market-analysis 38 www.therobinreport.com/beyond-sustainable-the-growing-demand-for-ethical-fashion/ 39 www.inc.com/this-way-up/sustainability-is-fashions-future-3-reasons-why.html 40 The Sustainable Apparel Coaliton is a global alliance of retailers, brands, suppliers, advocacy groups, labor unions and academics. See Appendix A for more informaton. 41 www.theguardian.com/sustainable-business/2016/jun/14/sustainable-apparel-coaliton-factory- environment-water-textles 42 www.upstartco-lab.org/creatvity-lens/ 43 www.impactalpha.com/ca-foundaton-ashoka-launch-seed-fund-for-sustainable-fashion/ 44 www.impactalpha.com/gender-bias-creates-gender-lens-investment-opportunites-in-ethical- fashion-in-indonesia/ 45 www.impactalpha.com/vinteds-raises-e50-million-by-catering-to-waste-conscious-fashion- consumers/ 46 Read an interview with Stephanie Cordes on opportunites for impact investng in global fashion in B the Change — www.cordesfoundaton.org/2016/12/09/b-the-change-feature 47 www.socialcapitalmarkets.net/ 48 IRIS is a performance measurement framework that focuses on themes including energy, environment, water; on benefciaries such as the environment, suppliers, employees; and apply lenses such as gender, poverty, and geography developed by the Global Impact Investng Network (GIIN).

A Creatvity Lens: Impact Investng in the Creatve Economy 19 Upstart Co-Lab Deep Dive: Ethical Fashion

49 B Analytcs’ “B Impact Assessment” benchmarks impact criteria around workers, community, and the environment against over 40,000 global businesses on over 300 indicators and is the primarily analytcal tool behind the B Corp certfcaton program. 50 GIIRS provides a portolio analysis using the B Impact Assessment. 51 www.entrepreneur.com/artcle/337075?mc_cid=710c3e5242&mc_eid=9b4f57e1a3 52 More examples can be found via “35 Fair Trade & Ethical Clothing Brands Betng Against Fast Fashion” — www.thegoodtrade.com/features/fair-trade-clothing 53 www.goodonyou.eco/wp-content/uploads/2018/12/Good-On-You-Brand-Ratng-System- Dec-2018-1.pdf 54 www.goodonyou.eco/wp-content/uploads/2018/12/Good-On-You-Brand-Ratng-System- Dec-2018-1.pdf 55 www.sasb.org/wp-content/uploads/2015/09/CN0501_Apparel-Accessories-Footwear_ Standard.pdf 56 www.apparelcoaliton.org/higg-product-tools/ 57 www.apparelcoaliton.org/higg-facility-tools/ 58 www.apparelcoaliton.org/higg-brand-tool/

A Creatvity Lens: Impact Investng in the Creatve Economy 20 DEEP DIVE Sustainable Food

Sustainable food defned million); food/beverage stores (3.2 million); and tangental jobs related to (3.3 The food and agriculture sector includes million).4 farmers, ranchers, and fshers who grow crops, raise , and harvest seafood. It also In 2017, American households spent $7,700 includes purveyors who create value-added on food and beverage (in home and out the food products, highlight the food experience as home) according to the Bureau of Labor central to the hospitality sector, and celebrate Statstcs.5 This includes $4,363 average home food as part of community and lifestyle through food expenditures (7.8% growth over 2016) services, channels, and platorms. These later and $3,365 spent on food outside the home actvites connect consumers to the overall food (6.7% growth over 2016).6 With 128 million US and agriculture ecosystem and are the focus of households, this translates to $1 trillion spent this review. on food annually.

The global food and agriculture industry is Despite increased interest in sustainable food estmated to be worth at least $8 trillion.1 in recent years, the food sector wrestles with According to the United States Department its role in a range of social and health problems, of Agriculture (USDA), agriculture, food, in additon to being one of the world’s largest and related industries contribute more than polluters.7 For example: $1 trillion to the U.S. economy annually, representng 5.4% of total annual GDP.2 In Human health and well-being 2017, 21.6 million full- and part-tme jobs • Over-use and misuse of antbiotcs in animals were related to these sectors, representng and humans is contributng to the rising 11% of total U.S. employment.3 Of this 21.6 threat of antbiotc resistance in humans.8 million, 19 million workers are employed within • 12 million people worldwide died in 2015 agriculture and food-related industries including from dietary risks “that arise from diets low in food service, eatng, and drinking places (12.5

A Creatvity Lens: Impact Investng in the Creatve Economy 1 Upstart Co-Lab Deep Dive: Sustainable Food

vegetables, nuts, whole grains, and seafood or and water sources, causing loss of biodiversity, diets high in (mostly from processed food) destroying the natural enemies of pests, and and sugary drinks.”9 reducing the nutritonal value of food.”16 • On every contnent over the past 50 years, • Globally, there are 400 low oxygen (hypoxic) there has been a common set of changes coastal ecosystem “dead zones” caused by from savory foods to sweet ones, from meals fertlizers, afectng more than 245,000 square to snacks, from small independent food shops kilometers (roughly 95,000 square miles).17 to giant supermarkets, from dinners cooked at • In 2015, 33% of global marine fsh stocks were home to meals eaten out or as takeout.10 being harvested at unsustainable levels; 60% • Measurements of fruits and vegetables are maximally sustainably fshed; and 7% are show that their , vitamin and protein underfshed.18 content has measurably dropped over the • Agriculture and irrigaton consume 70% of the past 50 to 70 years.11 world’s freshwater resources, and irrigaton • US agriculture ranks among the most is essental for 40% of the world’s food dangerous industries for workers, with a producton.19 work-related fatality rate of 21.4 deaths per • The food we waste contributes 4.4 gigatons 100,000 workers.12 of carbon dioxide equivalent into the • The meatpacking and poultry industries atmosphere each year — roughly 8% of total recruit and exploit vulnerable foreign workers, anthropogenic greenhouse gas emissions. including refugees.13 Ranked with countries, food waste would be the third-largest emiter of greenhouse gases • As of 2016, one-third of US farmworkers had globally, just behind the United States and incomes below the Federal Poverty China.20 Level; the average family income was between $20,000 and $24,999.14 The sustainable food and agriculture ecosystem depends on preserving biodiversity; supportng Planetary Health environmentally benefcial and low- to zero- • Second only to fossil fuels, livestock emissions carbon emission agriculture and fshing — including carbon dioxide, nitrous oxide, and practces; protectng animal welfare; minimizing methane — are responsible for an estmated or eliminatng non-recyclable or non-reusable 18-20% of global annual greenhouse gases.15 packaging; preventng and mitgatng food • In 2017, United Natons (UN) experts declared waste; ensuring equitable supply chains pestcides a “global human rights concern,” and labor practces; and supportng local with their excessive use “[contaminatng] soil economies. This paper will focus on products,

A Creatvity Lens: Impact Investng in the Creatve Economy 2 Upstart Co-Lab Deep Dive: Sustainable Food

brands, restaurants, hospitality companies, some, no meat.”22 The natural and organic food food service providers, and others who deliver movement saw the rise of macrobiotc diets, high quality products and curate experiences vegetarianism, whole grains, back-to-the-land that advance heritage and culture, community- organic farming, and co-ops.23 building, and environmental sustainability. Increasing consumer awareness and concern Creatves transform the ingredients produced about pestcides and food-borne illness scares by the food and agriculture ecosystem into (e.g. Mad Cow, listeria, E. coli, salmonella) something delicious and engaging, motvatng throughout the 1980s-90s stoked organic food customers to try new things and consider the demand. In 1990, the Federal Organic Foods impact of their eatng and drinking habits on the Producton Act established “natonal standards global community, human health, and planetary governing the marketng of organically health. Tasty food products and inspiring food produced products, [assuring] consumers experiences can engage consumers so that the that organically produced products meet a larger investment in a sustainable food system consistent standard.”24 Over tme, certfcaton pays of, both fnancially and in terms of its membership organizatons (e.g. Oregon Tilth, social and environmental impact. California Certfed Organic Farmers) formed to ensure specifc growing practces and prevent The sustainable food movement fraud within organics.25 The modern sustainable food movement grew Beginning in 2006, Michael Pollan’s out of the post-World War II industrializaton of The Omnivore’s Dilemma: A Natural History agriculture. Chemical fertlizers and pestcides, in Four Meals, In Defense of Food: An Eater’s combined with new government policies, Manifesto, and Food Rules: An Eater’s Manual yielded tremendous agricultural productvity.21 gained widespread recogniton for critquing the Along with advances in manufacturing, this food system at large. Throughout his books, he meant buying and preparing food became defned what he believes to be a holistc and cheap and convenient. healthy diet, popularizing the phrase: “Eat food. Not too much. Mostly plants.”26 In the late 1960s and early 1970s, eatng became a politcal and environmental act Food waste and its relatonship to food for the counterculture. Food had “to be insecurity entered the sustainable food grown diferently, sourced diferently, cooked agenda around 2010. According to the Natural diferently [as compared to their parents’ Resources Defense Council (NRDC), up to 40% generaton]… no pestcides, no favorings, no of the food in the United States is never eaten packages, no refned sugars or grains, and for while, at the same tme, one in eight Americans

A Creatvity Lens: Impact Investng in the Creatve Economy 3 Upstart Co-Lab Deep Dive: Sustainable Food

is food insecure.27 Increased awareness via exploitaton.”31 To date, the group has goten an Ad Council campaign, coupled with the fourteen mult-billion dollar food retailers idea that wasted food equals wasted money, — including Walmart, McDonald’s, Subway, helped spark fast responses from businesses, Sodexo and Whole Foods — to establish third nonprofts, foundatons, and governments alike, party-verifed “Fair Food Agreements” that even fnding bi-partsan politcal support.28 ensure more humane farm labor standards and fairer wages for farmworkers.32 Labor Focused on point of sale in the food supply Cheap, ofen migrant labor was another input chain, the worker-led “Fight for $15” began to the post-World War II era of industrialized in New York City in 2012 when 200 fast food food producton in the U.S. In the civil rights workers walked of the job as a demand for a era, farm workers’ rights garnered atenton and minimum $15/hour wage and union rights.33 became a focus within the labor movement. This has grown to a worldwide movement that In 1962, Cesar Chavez and Dolores Huerta includes other low wage workers. California, co-founded the United Farm Workers (UFW) Massachusets, New York, Maryland, New to address guest worker abuses and strike for Jersey, Illinois, and Connectcut now have a $15 higher wages, eventually as a union.29 minimum hourly wage. The 1970s saw the advent of the frst fairly traded cofee from cooperatves of small Food culture, products and enterprises farmers in Guatemala as part of a “trading The internatonal Slow Food movement began partnership based on dialogue, transparency, in Rome in 1989 with a manifesto for an and respect” to further sustainable “internatonal movement for the defense of development.30 Fair-trade agriculture addressed and the right to pleasure” that in part sought the interdependency between working to “escape the tediousness of ‘fast-food’ conditons, environmental stewardship, and [sic], [and] let us rediscover the rich varietes quality food products. It also introduced the and aromas of local cuisines.”34 Slow Food idea that consumers valued knowing where Internatonal found an early American ally in their food came from, and the conditons under Berkley, CA chef Alice Waters, who became which it was produced. the group’s vice president in 2002. Waters’ Chez Panisse has championed In 2001, the Coaliton of Immokalee Workers the values artculated by Slow Food since its (CIW) launched the Campaign for Fair Food opening in 1971. to “[forge] alliances between farmworkers and consumers that enlist the market power What started as a rebellion against the of major corporate buyers to help end that conventonal food system of the 1950-70s

A Creatvity Lens: Impact Investng in the Creatve Economy 4 Upstart Co-Lab Deep Dive: Sustainable Food

turned out to be a thriving market in its own are stepping into what have historically been right by the 1980-90s. In 1978, John Mackey considered government services. and Renee Lawson founded the vegetarian and Preceded by craf , chocolate, and cofee, organic store SaferWay in Austn, TX which two small and artsanal food and drink businesses years later became Whole Foods Market. Some have also launched across the country to ofer of today’s biggest organic brands — including “beter” alternatves in almost every category, Earthbound Farms, Organic Valley, Stonyfeld from pickles and granola to pasta and liquor. Farms, and Horizon Organic among others — The San Francisco-based Good Food Awards emerged during the subsequent decade. (which has strict triple-botom line criteria Picking up that legacy, food businesses were in additon to selectng “superior taste”) has among the frst Certfed B Corporatons since grown to receive over 2,000 entries from “food the certfcaton was established in 2006, 35 and crafers” across the country.36 The farm-to table now include Greyston Bakery, New Belgium movement has become a mainstream trend, Brewery, Stumptown Cofee Roasters, Danone and the number of farmers markets in the North America, Back to the Roots, and Ben U.S. grew from 2,000 in 1994 to over 8,700 in & Jerry’s. As familiar and readily accessible 2019.37 brands, these companies have helped As the food movement has grown, advance the idea of businesses that prioritze organizatons including Stone Barns Center the environment, their workers and their for Food and Agriculture,38 Food Tank,39 communites. FoodCorps,40 and Good Food Jobs41 have In response to ideals of regeneratve agriculture emerged to advance grassroots initatves for a and fshing practces, animal welfare, recyclable beter food system. Environmental nonprofts and reusable packaging, zero food waste, like the NRDC and the Environmental Working equitable supply chains and labor practces, Group (EWG) have started programs related new enterprises of all sizes have launched in to food systems reform, and universites have recent years. The rise of scratch cooking fast created food studies curricula — both looking at casual chains like Sweetgreen, plant-based the deep interconnectons among how food is and synthetc proteins such as Beyond Meat grown and produced and environmental, social and Impossible Foods, and meal kits Blue and human health. Apron are some examples of businesses that Publicatons focused on a beter food have tried to respond to these issues. Others system such as Edible Communites, Modern including Revoluton Foods and Brigaid, which Farmer, Civil Eats and New Food Economy partner with K-12 school districts provide beter have launched, and established news school meals, address nutriton and obesity,

A Creatvity Lens: Impact Investng in the Creatve Economy 5 Upstart Co-Lab Deep Dive: Sustainable Food

outlets including The New York Times and on its membership model as it sells all of its the Washington Post have increased food goods at a loss, and neither Kroger nor Sprouts systems coverage. Along with Bon Appétt, has delivered for investors.44 and the James Beard Foundaton, mainstream The power of large trusted food brands has media regularly highlights the diverse chefs, diminished enormously as millennials — the entrepreneurs and organizatons seeking largest consumer demographic in America — to make positve change through delicious demand healthy, organic food from small local food. The role of food to strengthen local producers. Diversifed food producers (like Kraf economies and preserve cultural heritage is Heinz, Mondelez, Nestle) face challenges and, being demonstrated more ofen and in more in response, these companies have gone on innovatve ways. spending sprees acquiring fast-growing start-up 45 Relevant trends in food, brands. Companies such as J&J Snack Foods, beverage and restaurants Flowers Foods, Hershey, Mondelez receive top ratngs from analysts46 as they acquire more The 10 largest public food companies in the brands and market share through economies of U.S. — Amazon, Walmart, McDonald’s, Costco, scale. Starbucks, Mondelez, Target, Kraf Heinz, Sysco, The U.S. restaurant industry — spanning YUM!42 — are so diverse that a review reveals fast food, fast casual and full-service — is a the dominant trends in today’s rapidly changing mature, highly compettve market. Despite the food sector. saturaton, several large chains have recently Consolidaton characterizes the industry experienced healthy growth47 mainly driven by across the board; in partcular it has signaled a rewards/loyalty programs, partnering with food revoluton in where we buy groceries. Walmart delivery companies, and opening convenient is now the biggest grocer in U.S. and groceries locatons.48 Their rising stock prices refect the represented 55% of all their 2018 U.S. sales market’s optmism over these trends. Projected in-store and online. Target and Costco are close annual sales in the restaurant industry for 2019 behind.43 Public equity analysts agree that in are $863 billion; 4% of U.S. GDP.49 Examples a high volume, low margin grocery industry, include Starbucks (9,000 locatons) shifing away Walmart is expected to outperform over the from urban centers to drive-thru and delivery long-term due to e-commerce plus delivery capabilites; Dave & Buster’s opening 16 new capabilites; Amazon (the second company locatons in 2019 in their model combining food to ever reach $1 trillion in market cap) also and entertainment (and utlizing new arcade/ contnues to climb in value. The outlook is more VR technology); and Shake Shack which is up divided among other top grocers: Costco relies to 200 locatons (up from 84 in 2016) fueled by

A Creatvity Lens: Impact Investng in the Creatve Economy 6 Upstart Co-Lab Deep Dive: Sustainable Food

their IPO and growing consumer preference for ofers environmentally friendly food items.57 quality ingredients.50 Analysts say that the most The concern for where food comes from successful newer restaurant stocks are those is also an opportunity for the celebraton that hit on under-served consumer demand at of diverse , with preference for scale, like Chipotle,51 and recent large private global favors and global cuisine on the market valuatons of chains like Sweetgreen rise. Authentc representatons of heritage ($1.6 billion in September 2019)52 show that and traditon resonate in the market, investors agree. while perceived cultural appropriators are punished. On the venture side, Food+Tech Connect’s 2018 U.S. Food & Beverage Startup Investment Desire for new, delicious foods: There Report53 found $1.45 billion invested across 247 has been a rise of food media and food and beverage startup deals in 2018, with entertainment taking viewers on a dairy and animal-based protein alternatves journey to far away countries and new atractng one-third of that. Plant-based food neighborhoods. TV shows like Anthony sales grew 11% last year to $4.5 billion, fve Bourdain’s Parts Unknown and viral videos tmes the growth of the overall food market.54 from Bon Appétt have contributed to a UBS forecasts the plant-based meat market will ubiquitous “foodie” culture. As a result, grow by 28% a year and reach $85 billion by consumers demonstrate a willingness to 2030.55 try new things: goat milk, dairy free yogurt, plant-based meats, caulifower dough Four trends currently shaping the mainstream pizza. There is a growing obsession with overall put sustainable food deliciousness and the search for your city’s brands in a positon to deliver superior fnancial best ice cream/pho/fried chicken/tacos/ — plus social and environmental — returns for grilled cheese. As a result, craf products impact investors: like beer, cheese, baked goods, condiments, Transparency and authentcity: Consumers and meats contnue to be on the rise.58 place increasingly high value on knowing Craf breweries (approximately 7,000) in the where their food comes from, its journey U.S. are at an all-tme high, and are being to their plate, and the welfare of land, credited for reviving economically declining waters, farmers and animals behind it all. towns and playing a role in the revival of 60% of all US consumers say it is important local foods.59 that the food they purchase is produced in Demand for unique food experiences: The a sustainable way, up from 50% in 2017.56 desire for new foods crosses over to new 51% are more likely to visit a restaurant that food-related experiences, like gourmet

A Creatvity Lens: Impact Investng in the Creatve Economy 7 Upstart Co-Lab Deep Dive: Sustainable Food

food trucks, pop-up restaurants, and consumers, and shaping tastes and habits, can cooking classes as team bonding. Eaters are help address these issues. connectng with their community through Lack of clear labeling: There are limited their food, and increasing globalizaton regulatons placed on food labeling. means more cuisines are available than ever “Certfed Organic” is one of the only terms before. 45% of diners go out to eat multple used to market food that has a clear legal tmes a week; another 20% going out to eat defniton — and even that certfcaton once a week.60 Gathering places like craf has been expanded, watered down, and breweries, cofee shops, and food halls appropriated by conventonal agriculture. serve as an antdote to digital social lives. Since there is no efectve regulatory 78% of millennials say they would rather oversight, it is difcult to efectvely spend money on an experience, such as a communicate to consumers that all natural, restaurant or other actvity, compared to healthy, local, grass-fed, and similar labels purchasing an item from a store.61 make unsubstantated implicit or explicit Customer convenience: The consumer food health and environmental claims. As sector in the U.S. has been marked by rapid a result, consumers struggle to clearly technology transformatons in recent years diferentate sustainably raised/produced including e-commerce62 and efciencies food and value-added products that have in fulfllment, delivery, and customizaton. partcular health or environmental virtues This goes beyond grocery shopping: meal from conventonal food or unhealthy food- kit companies make home-cooked family like products promoted with confusing meals possible in a fracton of the tme with terms and well-funded marketng pitches. customized services catering to diferent Unfavorable public policy environment: tastes, dietary needs, and preferences. The playing feld is highly biased against the Independent restaurants compete with producton of unique, regional products chains by using partners like GrubHub to and specialty crops. Therefore, establishing fulfll delivery orders. compettve prices for good food grown well Challenges to scaling remains a challenge. Policies, subsidies, and sustainable food long-standing governmental and market- based systems favor what is typically Lack of informaton, policies favoring big described as “Big Ag(riculture),” resultng agriculture, and on-line shopping habits pose in large-scale, extractve, chemically challenges to scaling sustainable food. The based agricultural practces to produce role creatves play in informing and educatng inexpensive fats, sugar, and meat. There is

A Creatvity Lens: Impact Investng in the Creatve Economy 8 Upstart Co-Lab Deep Dive: Sustainable Food

no such support for farmers growing fruits Trillium ’s Framework65 and vegetables, organic or sustainably raised maps out how impact investors break down livestock, or small-scale localized producton opportunites in sustainable food: sustainable of value-added farm products. Less than producton; sustainable consumpton; 1% of farm subsidies support the kinds sustainable agricultural technology; of regionally specialized ingredients that conservaton and climate change; and social are used in food products that celebrate equity and sustainable livelihoods.66 This reveals culturally diverse food traditons. an unrealized opportunity for the food products and experiences that bring sustainable, Environmental impact of on-line shopping: ethically-sourced food to our plates, and As consumer demand for new, delicious educate eaters about the implicatons of the food coupled with convenience increases, choices they make. food purveyors will need to address the inherent tension in shopping online for Plant-based meat alternatves, consumer products intended to be sustainable. Direct- packaged goods brands, and restaurants to-consumer delivery creates signifcant are growing in popularity among investors, environmental impacts due to packaging, including impact investors. For example, transportaton and fossil fuel consumpton. Impossible Foods raised more than $750 million — from investors ranging from the sovereign Impact investng in wealth fund of Singapore to Katy Perry — at an sustainable food approximate $2 billion valuaton at most recent close in May 2019.67 Healthy fast-casual chain Impact investors are already well-atuned to Everytable — which uses a sliding-scale pricing opportunites in the large food and agriculture model68 that lets restaurants in low-income sector. According to the Global Impact Investng neighborhoods charge less than ones in high- Network’s most recent survey of impact income neighborhoods — raised $5.3 million investors,63 10% of all respondents’ assets from Kimbal Musk, Acumen and TOMS Social under management are in Food & Agriculture, Enterprise.69 And impact investors including with 58% of respondents allocatng capital to donor advised fund sponsor Impact Assets the sector, making it the most common area benefted from Beyond Meat’s successful IPO for investment. Toniic’s Powered Ascent 2018: which resulted in a more than $9.2 billion Insights from the fronter of impact investng valuaton. Plant-based egg alternatve JUST reported 6% of Toniic members allocated employs innovatve design and branding to impact capital aligned with UN Sustainable help their impact brand go mainstream and Development Goal 2: to end hunger; improve counts Khosla Ventures and Radicle Impact as nutriton; promote sustainable agriculture.64

A Creatvity Lens: Impact Investng in the Creatve Economy 9 Upstart Co-Lab Deep Dive: Sustainable Food

investors. S2G invested in Ripple Foods (pea- food represent more than 17% of all 1,200 based milk), which leverages its intellectual B-certfed companies domestcally,76 and property, proprietary technology, and impact- include Bigelow Tea, Sir Kensington’s, Stonyfeld forward design and branding eforts to bring Farm, Luke’s Lobster, Drive Change, Ox Verte, consumer awareness to issues like the carbon, and artst-founded Jeni’s Splendid Ice Cream. water and plastc saved by using their product.70 (See Appendix B for other examples of Tanka is a natve-owned meat protein bar emerging companies.) based on traditonal frst natons wasna recipe, Building the feld are startup accelerators using food as a vehicle to bring new life and preparing sustainable food entrepreneurs awareness of Oglala Lakota cultural heritage to to atract impact capital. Food System 6 is a the wider market.71 one-year program for sustainable food and Upstart Co-Lab’s recent landscape analysis agriculture entrepreneurs in San Francisco;77 of 100 impact funds investng in the creatve FoodFutureCo is a scale-up accelerator whose economy revealed that sustainable food is focus areas include local food, plant-based food, the category with the most actvity, with 49% sustainable seafood, and food waste;78 Social of funds analyzed actve in the sector. These Enterprise Greenhouse Food Accelerator is a funds, which represent an estmated $9.8 hub for food innovators in Providence, RI;79 and billion, include RSF Social Finance Food Systems Good Food Accelerator in Chicago, the naton’s Transformaton Fund,72 New Crop Capital,73 frst accelerator focused on building supply Radicle Impact,74 and PowerPlant Ventures.75 chains for sustainable local food.80

Upstart’s analysis of more than 125 creatve Impact-driven angel networks are pooling economy companies and funds raising impact resources to seed innovatve food businesses capital today includes 16 sustainable food — including SLoFIG (Sustainable Local Food examples collectvely raising more than $278 Investment Group) investng in Chicago’s food million. Examples include Greenbelt Hospitality, shed,81 and Foodshed Investors, an Austn- a community-oriented farm-to-table restaurant based group of investors at the intersecton of founded by artst Mathew Moore which is food, fnance and social good.82 (See Appendix currently taking root in Los Olivos Park in D for more Funds, Accelerators and Angel Phoenix; and Coastal Enterprises, just one Networks.) of many community development fnance insttutons lending to food businesses in their Measuring the impact of region. sustainable food The 208 U.S. B Corporatons in sustainable The creatve economy engages the food

A Creatvity Lens: Impact Investng in the Creatve Economy 10 Upstart Co-Lab Deep Dive: Sustainable Food

ecosystem where the milk becomes the cheese: focuses on farmers receiving a fair price for where the raw products are transformed, their products, environmental and community value is added, and the results are presented benefts related to the farming and processing engagingly and deliciously, and in community. of those productons, and best practces for Ultmately food products and food experiences workers’ rights, environment and community have the potental to change consumer development. But the certfcaton stops behavior and trigger acton, ensuring there short of measuring uniqueness, deliciousness, is strong demand for the sustainable food traditon or artstry. and agriculture ecosystem. But this means Uniqueness, deliciousness, traditon and measuring the environmental and social artstry are exactly what is measured by impact of food products, brands, restaurants, standards for food products following hospitality companies, food service providers, specifc preparaton methods and specifc to and others is a layered process. discrete bioregions which have existed for Does the food experience advance heritage many years. Labeling and legal requirements & culture or community-building among are intended to protect the unique value partcipants? Does the food product contribute of regional products, and set customer’s to environmental sustainability through expectatons for quality, consistency, and educaton and actvaton of consumers? Are the traditon. These standards help create economic farm and food industry workers producing and value for artsanal products using traditonal preparing these foods treated well? Is planetary placed-based methods of producton honed health maintained through the growing, over generatons. Standards like these — when farming, fshing, producton, and preparaton of coupled with concepts of Fair Trade, organic, these foods? sustainable — can begin to capture the whole power of food products and brands to engage, Measuring the impact of food products and educate and spur eaters to ethical acton. experiences sits adjacent to how impact is measured for the vast sustainable food and For example, European law protects Italy’s agriculture ecosystem, and will necessarily famed Parmigiano Reggiano cheese by limitng lead to some new ways to assess impact. specifc producton to traditonal areas in the Fair Trade certfcaton for cofee, chocolate, provinces of Parma, Reggio Emilia, Bologna, and other food products has been the most Modena and Mantua. Under European Union prevalent metric for craf and artsanal food law, only cheese produced by a certain method products applied by impact investors. Fair in these provinces may be labeled Parmigiano- Trade certfcaton ensures fairness at all Reggiano. points in the supply chain.83 Certfcaton

A Creatvity Lens: Impact Investng in the Creatve Economy 11 Upstart Co-Lab Deep Dive: Sustainable Food

Ratng food experiences has mainly been issues. In San Francisco, The Perennial, a the purview of restaurant critcs and lifestyle restaurant dedicated to addressing climate feature writers. But the growth of food change through delicious food (which with a focus on authentcity and regional operated from 2016-2019) set up its relevance suggests there are new measures own aquaponic farm, used energy efcient coming. For example, in 2003, Claus Meyer appliances, recycled materials, baked with the and Rene Redzepi opened the restaurant Noma only perennial grain on the market (Kernza), in Copenhagen creatng a mult-sensory dining and purchased meat from carbon-friendly experience and global sensaton that uncovered ranches. Founders Karen Leibowitz and and celebrated elements of local history and Anthony Myint also launched the Perennial culture. This restaurant quickly became the Farming Initatve, a non-proft dedicated to standard for food experiences that celebrate creatng a renewable food system through place, elevate local cuisine, and embrace Zero Footprint carbon neutral restaurants, by traditons and regional distncton. The Noma providing sustainability informaton for chefs phenomena invigorated a discussion which like a Healthy Soil Guide, and with advocacy resulted in the creaton of an internatonal eforts like Restore California focused on standard for new Nordic cuisine. restaurants, farmers and diners.84

In 2005, the Nordic Council’s agricultural Conclusion and food ministers from Denmark, Finland, Iceland, Norway, and Sweden launched the Understanding the power of food products new Nordic Food Program defning “local.” and experiences will contnue to evolve as The Council also provided more than 3 million customers demand and pay a premium to eat Euros to support development of food-related in a way that refects their values from farm products and business that met standards for to fork and sea to spoon. There is opportunity the new Nordic Environmental Sustainability. for metrics to evolve, assigning even more Establishing a legal framework and cogent measurable value to products and experiences defniton for regional cuisine added value and that foster a diverse, culturally authentc, cachet to an emergent eatng experience and equitable, and sustainable economy. previously unrecognized and under-appreciated What’s clear now, however, is that impact regional cuisine. investors who care about shaping a creatve Other restaurants have started to promote economy in these ways will fnd numerous environmental sustainability as part of their opportunites to deploy their values-aligned brand, providing a clear example of the food capital in food across industry category (eg. experience educatng eaters about bigger food waste reducton, dining, consumer packed

A Creatvity Lens: Impact Investng in the Creatve Economy 12 Upstart Co-Lab Deep Dive: Sustainable Food

goods) and impact area (eg. environment, labor rights, cultural heritage).

Creatves — whether they’re chefs, artsanal food and drink makers, or entrepreneurs — have been essental in captvatng and educatng consumers around social, economic, and environmental issues for decades. This will contnue, making it possible for consumers to act on their values without sacrifcing pleasure.

A Creatvity Lens: Impact Investng in the Creatve Economy 13 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix A: Sustainable Food Organizatons

Chefs Collaboratve Natonal nonproft network with a mission to inspire, educate, and celebrate chefs and food professionals building a beter food system The Climate Manufacturers, retailers, distributors, brokers, suppliers and other concerned businesses Collaboratve from the natural foods industry working collaboratvely to take bold acton to reverse climate change Coaliton of Worker-based human rights organizaton internatonally recognized for its achievements Immokalee Workers in fghtng human trafcking and gender-based violence at work Culinary Breeding Nonproft building communites of plant breeders, seed growers, farmers, produce Network buyers, chefs and other stakeholders to improve quality in vegetables and grains Equal Exchange For-proft, Fairtrade, worker-owned cooperatve headquartered in West Bridgewater, MA Fairtrade America The U.S. arm of Fairtrade Internatonal working to promote fair trade and ethical consumpton in the US market Farm Labor FLOC represents thousands of seasonal farm workers, advocatng for beter working conditons and wages Fields Oceans Sponsored by the nonproft Seatle Good Business Network, this volunteer organizaton Ranches Kitchens engages chefs in promotng local and sustainable food purchasing Steward (FORKS) Food Chain Nonproft unitng 31 organizatons involved in the food system, working to improve Workers Alliance wages and working conditons for their over 340,000 workers Food Policy Acton Nonproft whose goal is to change the natonal dialogue on food policy by educatng the public on how elected ofcials are votng on these issues Food Recovery Nonproft empowering students, communites, and food businesses to reconstruct their Network perceptons and habits around surplus food Food Rescue Director of organizatons in the United States that rescue, clean, , prepare, and Locator distribute food to the those in need in their communites Food Tank Nonproft food think tank focused on building a global community for safe, healthy, nourished eaters Global Alliance Collaboraton of over 20 philanthropic foundatons that envisions healthy, equitable, for the Future renewable, resilient, and culturally diverse food and agricultural systems of Food (GAFF) Good Food Organizaton celebratng taste-making crafers at the vanguard of deliciousness and Foundaton social and environmental excellence

A Creatvity Lens: Impact Investng in the Creatve Economy 14 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix A contnued

GrowNYC New York City nonproft providing free tools and services for New Yorkers to help improve access to fresh, healthy local food The Happy Org Happy Actve Positve Purposeful Youth is a youth-led organizaton that addresses the physical, mental, emotonal, and social health issues faced today Hungry Harvest Fights food waste by connectng customers with surplus fruits and vegetables that would otherwise go to landflls Hot Bread Kitchen New York City nonproft social enterprise that creates economic opportunity through careers in food James Beard JBF’s mission is to preserve, nurture, and celebrate the diverse culinary heritage Foundaton (JBF) of the U.S. The Perennial Nonproft organizaton dedicated to building a renewable food system rooted in Farming Initatve healthy soil Readers to Eaters Publisher working toward food literacy among children and families ReFED Data-driven guide for businesses, government, funders, and nonprofts to collectvely reduce food waste at scale Refresh Working Research collaboraton made up of over 30 farmers, small business owners, researchers, Group corporate partners, nonproft leaders, educators, community organizers, and innovators working across the food system to examine the intersecton of technological innovaton and food Restaurant Works to raise restaurant industry standards for working conditons, wages, and Opportunites employee treatment. Centers United Slow Food USA Part of the global Slow Food network spreading a mission of good, clean, and fair food for all to over 100,000 members in more than 150 countries Small Planet Provides grants to visionary social movements and grassroots organizatons working to Foundaton transform the global food system Stone Barns Center Nonproft farm and educatonal center in New York focused on fostering young farmers; for Food and Blue Hill at Stone Barns is their partner restaurant Agriculture Southern Foodways An insttute of the Center for the Study of Southern Culture at the University of Alliance Mississippi, dedicated to the documentaton, study and exploraton of the foodways of the American South

A Creatvity Lens: Impact Investng in the Creatve Economy 15 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix B: Reports and Artcles on the Impact of the Food Industry

2019 Restaurant Success Report, Toast, July 2019 Industry report from restaurant sofware company Toast reportng data around restaurant best practces and diner preferences www.pos.toastab.com/resources/restaurant-success-industry-report

Andrea Strong, Fancy Snacks Are Having a Moment. Venture Capital Wants In. Eater, September 2019. Artcle that chronicles investor interest in the rise of value-added artsanal snack products www.eater.com/2017/9/6/16230534/artsan-food-funding-fnancing-venture-capital

Artsanal Trend Fuels Ingredient Innovaton, The Ingredients Network, September 2018 Artcle outlining the rise of craf and artsanal food and drink launches, with suppliers responding by investng in authentc, clean label ingredients www.ingredientsnetwork.com/artsanal-trend-fuels-ingredient-innovaton-news074695.html

Boston Consultng Group, Tackling the $1.6 Billion Food Loss and Waste Crisis. August 2018 BCG argues that there is $700 of business opportunity embedded in solving the food waste challenge. www.bcg.com/en-us/publicatons/2018/tackling-1.6-billion-ton-food-loss-and-waste-crisis.aspx

Food + Tech’s 2018 U.S. Food & Beverage Startup Investment Report, June 2019 Annual report examining U.S. based food and beverage investor trends, including a detailed overview of notable exists and investments. www.foodtechconnect.com/2019/06/06/2018-u-s-food-beverage-startup-investment-report/

John Eligon and Julia Moskin, 16 Black Chefs Changing Food In America, New York Times, July 2019 Editorial about chefs changing the culinary landscape through celebratng heritage and being the architects of a food future and culture that pushes past the Eurocentric traditons taught in culinary schools www.nytmes.com/interactve/2019/07/16/dining/black-chefs-restaurants-food.html

Kristn Lang, Joshua Humphreys, and Andreea Rodinciuc, Impact Investng in Sustainable Food and Agriculture across Asset Classes: Financing Resilient Value Chains through Total Portolio Actvaton, Trillium Asset Management, May 2017 A framework from leading impact investment frm for investors to invest in sustainable food systems across asset classes such as cash, public equites, and fxed income, as well as alternatve asset classes such as private equity, venture capital, and real assets in sustainable farmland and tmberland. www.trilliuminvest.com/wp-content/uploads/2017/05/Investng-in-Sustainable-Food-and-Agriculture.pdf

A Creatvity Lens: Impact Investng in the Creatve Economy 16 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix B contnued

Natural Marketng Insttute, Understanding the LOHAS Market Report, March 2008 A landmark demographic marketng segment and marketng report which highlights market trends and size for healthy food, beverage, and organic foods; it details market size and shape and is a good indicator for the development of craf food markets www.lohas.se/wp-content/uploads/2015/07/Understanding-the-LOHAS-Consumer-11_LOHAS_Whole_ Foods_Version.pdf

Natonal Academies Press, A Framework for Assessing the Efects of the Foodsystem, June 2017 Analysis of food’s impact on health, environment, climate, economic inequality. www.ncbi.nlm.nih.gov/books/NBK305181/

Natonal Restaurant Associaton, 2019 Restaurant Industry Factbook Fact sheet of key stats in the U.S. restaurant industry around employment, consumer trends and economic impact www.restaurant.org/Downloads/PDFs/Research/SOI/restaurant_industry_fact_sheet_2019.pdf

Nourish Food System Map Infographic mapping circular food system inputs and impacts designed by Nourish, an educatonal initatve from WorldLink www.nourishlife.org/pdf/Nourish_Food_System_Map_18x24.pdf

Scheherazade Daneshkhu, Consumer Goods: Big Brands Batle “Litle Guys,” Financial Times, February 2018 Artcle covering the rise of artsanal and craf foods and consumer package goods companies’ interest in acquiring craf brands www.f.com/content/4aa58b22-1a81-11e8-aaca-4574d7dabf6

Stephanie Strom, Small Food Brands Big Successes, New York Times, August 14, 2015 Strom writes about the emergence and market power of small food brands, reportng craf and artsanal food and drink launches have seen a global CAGR of 28% over the past 5 years www.nytmes.com/2015/08/26/dining/start-up-food-business-changing-appettes.html

A Creatvity Lens: Impact Investng in the Creatve Economy 17 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix C: Sustainable Food Investment Funds, Accelerators, Investor Networks

Acceleratng World’s frst nature-based business accelerator focusing on high-impact seed stage Appalachia businesses in sectors including food, craf beverage, forest products, and soil and water health innovatons AccelFoods VC fund focused on high growth packaged food and beverage companies AgFunder VC platorm investng in technologies to rapidly transform our food and agriculture system; one of the most actve agri-foodtech venture capitalists Anterra Capital VC fund investng in companies that are transforming the safety, and sustainability of global food Armonia Fund investng since 2007 in sustainable and regeneratve companies; also a pioneer investor in B Lab and founding member of the GIIN Austn Foodshed Mission-driven investment frm local “good food” ecosystems by playing in the Investors intersecton of food, fnance, and social good Beter Food Exclusively invests in entrepreneurs that are leveraging IT to transform the food and Ventures ag sector BIGR Ventures Boulder, CO- based growth equity fund providing value-added, strategic partnership and capital to promising early-stage natural and organic products Boulder Food Group VC frm focusing on early stage organic, non-GMO, healthy food and beverage consumer product companies Branchfood Largest community of food innovators in New ; provides resources to founders launching and scaling transformatve food-related businesses including co-working space, events, workshops, and mentorship Cascadia Foodshed Collaboraton of foundatons, investors and NGOs targetng fve impact areas: health, Funding Project social equity, family wage job creaton and preservaton, rural community resilience, and ability to infuence policy Colorado Food Supports a vibrant and healthy local food system by making small loans to farmers, producers, and food system entrepreneurs in Colorado who do not have access to traditonal sources of growth capital; invests in sustainable food products and the communites that create and consume them Fair Food Fund Impact investng arm of Fair Food Network; investng in early stage entrepreneurs growing community “health and wealth”; focus areas: improving healthy food access, supportng American farmers, ignitng local economies, and opening opportunites for more people in more places

A Creatvity Lens: Impact Investng in the Creatve Economy 18 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix C contnued

Food Angels Professional angel network of independent individuals with knowledge and expertse in food entrepreneurship Food Foundry Chicago-based growth accelerator program by Relish Works; supports, connects, and propels innovatve startups who are reimagining the food industry with focus on vendors, distributors, and operators Food Hatch Food focused accelerator providing seed and early stage funding and connectons to senior executves and successful entrepreneurs in the food industry Food System 6 Accelerator building a more equitable and sustainable food and agriculture system by supportng entrepreneurs focused on health, sustainability, and justce Food-X A top food innovaton accelerator out of SOSV; focus on innovatons in food system; promotng health and sustainability; providing delicious, healthy, afordable, convenient food FoodBytes! A series of transformatonal events from Rabobank in the food, agribusiness, and technology space; designed to connect food industry leaders and investors with startup companies that are innovatng and disruptng the food chain with groundbreaking ideas in food, agribusiness and technology FoodFutureCo Accelerator for established yet small organizatons providing unique products and solutons across our food system; focus areas include: consumer products, local food, plant-based food, sustainable seafood, ag tech, food tech and food waste Foodshot Global Coaliton of mission-aligned capital providers including Rockefeller Foundaton and Generaton Investment Management Greenmont Capital Impact investments in high growth consumer products since 2004, based in Boulder, CO. Partners In 2008, Greenmont II became a GIIRS Pioneer Fund InvestEco Sustainable Impact investment fund focused on high growth North American companies that Food Fund promote health and sustainability in the food & agricultural sector New Crop Capital Specialized venture fund investng in companies developing meat, dairy, eggs and seafood with plant-based ingredients or through cellular agriculture, as well as companies that promote and distribute these products PowerPlant Growth equity fund investng in emerging consumer food, beverage, and Ventures companies with focus on plant-centric brands Rural America Chicago-based private equity frm targetng the agribusiness market; makes partnership Fund investments in growing, lower middle-market operatng businesses principally in agriculture or ag-related industries

A Creatvity Lens: Impact Investng in the Creatve Economy 19 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix C contnued

S2G Ventures Mult-stage healthy and sustainable food and agriculture venture fund SKU 14-week accelerator for CPG companies Sustainable Local Network of accredited independent investors who share the mission of using private Food Investment investment to re-establish a robust and sustainable food system across the Group (SLoFIG) Chicago foodshed Social Enterprise Provides social entrepreneurs with tools, networks and resources along health & Greenhouse Food wellness, food, and impact tracks Accelerator Terra Accelerator Food and Ag tech accelerator rom Rabobank and RocketSpace Union Kitchen Washington DC-based food business accelerator building successful businesses that Food Accelerator launch locally, grow regionally, and scale natonally Village Capital Investment frm focused on access to opportunity for all communites (supportng ventures in health, educaton, and fnancial inclusion) and resource sustainability of the planet (supportng ventures in energy and agriculture)

Many corporatons administer their own food incubator/accelerator programs and venture funds. Examples include: 301 Inc (General Mills), 7-Ventures (7-11), Acre Venture Partners (Campbell Soup), Canvas Food + Drink Lab (Marriot), Chobani Incubator, Eighteen94 Capital (Kellogg’s), Tin Shed Ventures (Patagonia), Tyson New Ventures, Unilever Ventures, VEB Venture & Emerging Brands (Coca Cola), WeWork Food Labs Accelerator

A Creatvity Lens: Impact Investng in the Creatve Economy 20 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix D: Representatve Sustainable Food Businesses

Back to the Roots Indoor garden kit and organic maker whose products are in public school cafeterias across the country Basbaas Sauce Brooklyn-based, woman owned Somali hot sauce company Bavete , WI based woman owned butcher shop and restaurant serving local, sustainable meats and charcuterie Benne on Eagle Asheville, NC based restaurant paying homage to the Appalachian African-American culinary traditons Burlap and Barrel Direct trade, single origin, hand-harvested from around the world Brigaid K-12 school cafeteria chef-training program founded by former Noma head chef Dan Giust Brightland Oil Single-estate California olive oils; their farm partner is commited to organic practces and uses zero pestcides Brooklyn Delhi Condiments and sauces inspired by Indian culinary traditons California Olive Ranch Vertcally integrated olive oil company using sustainable methods to make award winning, top quality oils Diaspora Co. Single origin, direct trade Indian purveyor Dig (formerly Dig Inn) Fast casual farm to table chain with its own farm in New York State Dripkit Pour-over instant cofee with biodegradable flter Dock to Dish Internatonal network of small-scale fshermen who pioneered the restaurant supported fshery model Eat Ofeat New York catering company employing refugees as chefs; chefs make signature dishes from their home countries for the catering menu EatsPlace EatsPlace is a neighborhood restaurant and bar that’s a food incubator and restaurant accelerator Everytable Healthy fast food chain in LA serving low-income neighborhoods Farm & Sparrow Mars Hill, NC mill dedicated to expressing the regional terroir of American landrace grains and . FoodtoEat Woman-owned corporate catering concierge service that focuses on working with immigrant, women and minority-run food businesses throughout New York City

A Creatvity Lens: Impact Investng in the Creatve Economy 21 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix D contnued

Greyston Bakery Yonkers, NY based bakery whose profts are directed back to the community via a foundaton; also practce open hiring, which allows anyone to sign up regardless of background Jeni’s Splendid Award winning Columbus, OH Certfed B-Corp ice cream company using direct trade and Ice Cream fair trade ingredients Lef Bank Saxapahaw, NC based butcher and charcuterie shop using sustainable meats Mermaid’s Garden Sustainable seafood shop and community supported fshery share in Brooklyn, NY Ocean Hugger Plant-based protein alternatve sushi/sashimi (made from ingredients such as tomato, eggplant) from Master Chef James Corwell Pineapple Lifestyle and event brand for women who love food Collaboratve Proud Pour Wine and cider maker whose sales directly beneft environmental causes including oyster habitat restoraton Rancho Gordo Napa County, CA based specialty producer and seller of heirloom beans Red Bay Cofee Ensures their cofee producton is not only high quality and sustainable, but a vehicle for Roasters diversity, inclusion, social and economic restoraton, and entrepeneurship Revoluton Foods Certfed B-Corporaton helping schools serve compliant, delicious meals Seylou Bakery Washington DC bakery that partners with farmers for specifc grains, which are milled on site and baked into 100% whole grain breads in a wood-fred oven Spare Food Co. Co-founded by former Blue Hill culinary director Adam Kaye, a food waste business using culinary innovaton to create new products and processes that help design waste out of the food system Tanka Natve-owned, Kyle, SD-based bison bar makers who base their recipe on Lakota food traditons Teatuila Denver, CO-based B-Corp single garden direct tea company that owns its own regeneratvely farmed tea garden Teranga West African inspired, Harlem, NY fast casual restaurant inside The Africa Center making dishes inspired by traditonal home cooking The Meat Hook Brooklyn, NY based whole animal butcher shop, restaurant, and sausage company sourcing sustainable meats Toast Ale Award winning beer brewed with surplus bread; 100% of profts go to charity

A Creatvity Lens: Impact Investng in the Creatve Economy 22 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix E: Sustainable Food Measures and Standards

The American Cheese Society Competton (www.cheesesociety.org/competton) is the largest judging of American-made cheeses.

The America Grassfed Associaton (www.americangrassfed.org/become-a-certfed-producer) certfcaton program recognizes livestock producers that raise animals on pasture and use grassfed-fnishing methods.

Animal Welfare Approved (www.agreenerworld.org/certfcatons/animal-welfare-approved) sets standards for human treatment of all species of animals and provides certfcaton.

The Brewers Associaton’s Craf Beer Seal (www.brewersassociaton.org/independent-craf-brewer-seal) is dedicated to promotng and protectng America’s small independent craf brewers.

Demeter Symbol (www.demeter-usa.org/about-demeter/biodynamic-certfcaton-marks.asp) recognizes producton based in biodynamic agricultural methods.

Fair Trade Certfcaton (www.fairtradecertfed.org) For cofee, tea, chocolate, cacao, mangoes, bananas, grapes, apples: third party certfcaton process that evaluates farmer working conditons, access to capital and sustainable agricultural practces.

Global Animal Partnership (www.globalanimalpartnership.org) partners with Whole Foods and Amazon on a 5-point ratng system.

The Good Food Awards (www.goodfoodfdn.org) recognizes food purveyors and products that use responsible practces and who celebrate crafsmanship and favor.

The James Beard Awards (www.jamesbeard.org/awards) ofer awards in a variety of food industry categories. Recognizes best chefs and restaurants in the United States.

The Menus of Change Initatve (www.menusofchange.org) co-founded by the Culinary Insttute of America and the Harvard School of Public Health, recognizes insttutons that serve healthy, sustainable, and delicious food.

Michelin Guide (www.guide.michelin.com/us) is a ratng system to grade restaurants on their quality.

Monterey Bay Aquarium Seafood Watch (www.seafoodwatch.org) is a list of fsh species that helps consumers and businesses make healthy choices for oceans.

The Non-GMO Project (www.nongmoproject.org) is advocatng for transparency around products that are GMO-based.

OneHealthAg (www.onehealthag.com) aims to help producers and consumers raise and sell meat that aligns with social and environmental values.

A Creatvity Lens: Impact Investng in the Creatve Economy 23 Upstart Co-Lab Deep Dive: Sustainable Food

Appendix E contnued

Organic and Biodynamic Wines are made without the use of artfcial pestcides, fungicides and herbicides according to rules established by organizatons like the U.K.’s Soil Associaton (www.soilassociaton.org/our- standards/what-are-organic-standards).

Refed is a non-proft dedicated to eliminatng food waste. Refed tracks progress against 27 solutons to food waste: (www.refed.com/analysis?sort=economic-value-per-ton).

USDA Certfed Organic (www.usda.gov/topics/organic): An agricultural product or food grown using methods approved by the U.S. department of agriculture.

World 50 (www.theworlds50best.com) is a list of the world’s 50 best restaurants sponsored by San Pellegrino.

ZeroFoodPrint (www.zerofoodprint.org) is an organizaton recognizing or organizing restaurants that are taking direct acton to address the climate crisis.

A Creatvity Lens: Impact Investng in the Creatve Economy 24 Upstart Co-Lab Deep Dive: Sustainable Food

Acknowledgements Thank you to the following experts who assisted with this study: Andrew Carter, Smallhold Martha Hodgkins, Stone Barns Center for Food and Agriculture Will Rosenzweig, Co-Founder and Managing Partner, Physics Ventures Julia Sze, Julia W. Sze Consultng Chloe Sorvino, Forbes Corey Vernon, Radicle Impact Ariel Lauren Wilson, Edible Manhatan and Edible Brooklyn

Upstart Co-Lab Advisory Board Cathy Clark, Director of CASE i3, Fuqua School of Business, Duke University Jed Emerson, Chief Impact Strategist, ImpactAssets Jonathan Law, Partner, McKinsey & Company Will Rosenzweig, Co-founder and Managing Partner, Physic Ventures Surita Sandosham, Executve Director, Heartland Alliance Internatonal Andrew Stern, Founder and Executve Director, Global Development Incubator Dennis Whitle, CEO, Feedback Labs

Upstart Co-Lab Team Laura Callanan, Founding Partner Ron Anahaw, Program Assistant Nam Phuong Doan, Program Administrator Sarah Lang, Associate Ward Wolf, Senior Associate

This study was authored by Jill Isenbarger in collaboraton with Ward Wolf and Laura Callanan.

A Creatvity Lens: Impact Investng in the Creatve Economy 25 Upstart Co-Lab Deep Dive: Sustainable Food

Endnotes

1 www.plunketresearch.com/statstcs/Industry-Statstcs-Global-Food-Industry-Statstcs-and- Market-Size-Overview/ 2 www.ers.usda.gov/data-products/ag-and-food-statstcs-chartng-the-essentals/ag-and-food- sectors-and-the-economy/ 3 www.ers.usda.gov/data-products/ag-and-food-statstcs-chartng-the-essentals/ag-and-food- sectors-and-the-economy/ 4 www.ers.usda.gov/data-products/ag-and-food-statstcs-chartng-the-essentals/ag-and-food- sectors-and-the-economy/ 5 www.bls.gov/news.release/pdf/cesan.pdf 6 www.bls.gov/news.release/pdf/cesan.pdf 7 Although global food security and nutriton are outside of the scope for this paper, these statstcs provide important context. 8 www.who.int/news-room/detail/07-11-2017-stop-using-antbiotcs-in-healthy-animals-to- prevent-the-spread-of-antbiotc-resistance 9 Bee Wilson, The Way We Eat Now p. xviii 10 Bee Wilson, The Way We Eat Now p. xxii 11 www.politco.com/agenda/story/2017/09/13/food-nutrients-carbon-dioxide-000511 12 www.cdc.gov/niosh/topics/aginjury/default.html 13 www.propublica.org/artcle/who-would-pay-26000-to-work-in-a-chicken-plant 14 www.doleta.gov/naws/research/docs/NAWS_Research_Report_13.pdf 15 P. Hawken (Ed.), Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming, p. 37 16 www.documents-dds-ny.un.org/doc/UNDOC/GEN/G17/017/85/PDF/G1701785. pdf?OpenElement 17 www.un.org/sustainabledevelopment/blog/2019/05/nature-decline-unprecedented-report/ 18 www.un.org/sustainabledevelopment/blog/2019/05/nature-decline-unprecedented-report/ 19 P. Hawken (Ed.), Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming, p. 68 20 P. Hawken (Ed.), Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming, p. 42 21 www.nybooks.com/artcles/2010/06/10/food-movement-rising/ 22 Jonathan Kaufman, Hippie Food, p. 7 23 Joshua Clark Davis, From Head Shops to Whole Foods, p. 3

A Creatvity Lens: Impact Investng in the Creatve Economy 26 Upstart Co-Lab Deep Dive: Sustainable Food

24 The fnal Natonal Organic Standards were not signed into law untl April 21, 2001. www..ucsc.edu/reg-hist/tmeline-cultvatng-a-movement-an-oral-history-series-on- organic-farming-and-sustainable 25 www.library.ucsc.edu/reg-hist/tmeline-cultvatng-a-movement-an-oral-history-series-on- organic-farming-and-sustainable 26 www.michaelpollan.com/books/in-defense-of-food/ 27 www.nrdc.org/issues/food-waste 28 www.foodtank.com/news/2019/09/new-bill-to-reduce-food-waste-enters-congress/ 29 www.ufw.org/about-us/our-vision/ 30 www.hwfo.com/about-us/history-wfo/history-fair-trade 31 www.ciw-online.org/about/ 32 www.ciw-online.org/about/ 33 www.fghtor15.org/about-us/ 34 www.slowfood.com/flemanager/Convivium%20Leader%20Area/Manifesto_ENG.pdf 35 Founded in 2006, B-Corps are businesses from all industries that meet the highest standards of verifed social and environmental performance, public transparency, and legal accountability to balance proft and purpose. 36 www.goodfoodfdn.org/foundaton/about/ 37 www.farmersmarketcoaliton.org/educaton/qanda/ 38 Stone Barns Center for Food & Agriculture is a nonproft farm and educatonal center in New York 39 Food Tank is self-described as a food think tank 40 FoodCorps is an Americorps program focused on food educaton 41 Good Food Jobs is a job listng website 42 www.fool.com/investng/the-10-biggest-food-stocks.aspx 43 www.fool.com/investng/how-to-invest-in-food-stocks.aspx 44 www.fool.com/investng/2019/06/26/will-sprouts-farmers-market-ever-thrive.aspx 45 Recent examples of acquisitons by large food players include: Plated by Albertson’s (2017), Pirate Brands and Amplify (maker of SkinnyPop) by Hershey (2018), Sir Kensingtons, Tazo Tea and Pukka Herbs by Unilever, Rxbar by Kellogg (2017), Annie’s by General Mills (2014), Dave’s Killer Bread by Flower Foods (2015), Enjoy Life Foods by Mondelez (2015) 46 www.thestreet.com/topic/21481/top-rated-equity-food-products.html 47 Growth is measured by new locatons, increased trafc and improving proftability 48 www.fool.com/investng/the-10-biggest-food-stocks.aspx 49 www.restaurant.org/Downloads/PDFs/Research/SOI/restaurant_industry_fact_sheet_2019.pdf

A Creatvity Lens: Impact Investng in the Creatve Economy 27 Upstart Co-Lab Deep Dive: Sustainable Food

50 Others experiencing recent growth include Dunkin Brands (278 new locatons in 2018, making it one of the fastest growing chains in the US); Jack in the Box; Burger King (8,000 locatons in US and stll growing); and Popeye’s (135 new locatons) 51 www.fool.com/investng/how-to-invest-in-restaurant-stocks.aspx 52 www.restaurantbusinessonline.com/fnancing/sweetgreens-latest-investment-sends-its- valuaton- 53 www.foodtechconnect.com/2019/06/06/2018-u-s-food-beverage-startup-investment-report/ 54 www.plantbasedfoods.org/2019-data-plant-based-market/ 55 www.markets.businessinsider.com/news/stocks/beyond-meat-ubs-plant-based-meat-market-85- billion-2030-2019-7-1028367962 56 www.foodinsight.org/wp-content/uploads/2018/05/2018-FHS-Report-FINAL.pdf 57 www.foodinsight.org/wp-content/uploads/2018/05/2018-FHS-Report-FINAL.pdf 58 www.kalsec.com/food-trends-2019/ 59 www.beveragedynamics.com/2018/09/10/number-of-u-s-breweries-should-reach-7000-in-2018/ 60 www.restaurant.org/Downloads/PDFs/Research/SOI/restaurant_industry_fact_sheet_2019.pdf 61 www.pos.toastab.com/blog/restaurant-management-statstcs 62 Food was once thought to be most resistant to the switch to e-commerce, including several notable false starts in the recent past. 63 www.thegiin.org/assets/GIIN_2019%20Annual%20Impact%20Investor%20Survey_webfle.pdf 64 Investment examples cited across asset classes include Triodos Sustainable Trade (cash/cash equivalents); Root Capital (fxed income); Whole Foods (public equity); InvestEco Food Fund II (private eqiuty); Farmland LP (real assets) 65 www.trilliuminvest.com/wp-content/uploads/2017/05/Investng-in-Sustainable-Food-and- Agriculture.pdf 66 Trillium’s detailed breakdown of these categories includes the following: Sustainable producton (crops, livestock, fsheries), animal welfare, tmber & wood products; Sustainable consumpton (nutriton, healthy foods, food safety, GMOs, food waste); Sustainable Ag technology (irrigaton, biowaste, sofware, big data, green chemistry, digital precision ag); Conservaton and climate change (climate change mitgaton & adaptaton, deforestaton, land care & soil health), water use, biodiversity; Social equity & sustainable livelihoods (fair trade, land grabs, workers’ rights, child labor, women farmers, food sovereignty) 67 The Impossible Burger is sold in 7,000 restaurants in North America and Asia including Burger King and White Castle. 68 www.businessinsider.com/everytable-healthy-fast-food-chain-changes-prices-depending-on- neighborhood-2016-7

A Creatvity Lens: Impact Investng in the Creatve Economy 28 Upstart Co-Lab Deep Dive: Sustainable Food

69 www.impactalpha.com/the-future-of-food-distributon-opportunity/ 70 www.ripplefoods.com 71 www.newfoodeconomy.org/tanka-bar-general-mills-epic-provisions-bison-bars/ 72 RSF Social Finance is a nonproft social fnance organizaton that ofers investng, lending and giving services to those who are commited to improving society and the environment. 73 New Crop Capital is a venture capital fund that provides angel, seed, and series A funding to companies developing meat, dairy, eggs, and seafood with plant-based ingredients or through cellular agriculture, as well as companies that promote and distribute these products 74 Radicle Impact is an early stage VC frm that invests in responsible fnance, clean energy, and healthy food sectors 75 PowerPlant Ventures is a growth equity fund that invests in emerging plant-centric consumer food, beverage, and foodservice companies 76 B Lab industry categories counted include Agricultural services (14), Catering and Meetng/Event Management (3), Food & Beverage (169), Growers (12), Restaurant 10 77 www.foodsystem6.org 78 www.foodfuture.co 79 www.segreenhouse.org/accelerate-your-enterprise/accelerator/ 80 www.familyfarmed.org/good-food-accelerator/ 81 www.slofg.com 82 www.foodshedinvestors.com 83 www.fairtradecertfed.org 84 www.perennialfarming.org

A Creatvity Lens: Impact Investng in the Creatve Economy 29 DEEP DIVE Social Impact Media

Social impact media defned US GDP.6 The U.S. entertainment and media industry is expected to reach more than $830 The media sector includes , literature, billion by 2022.7 In the US, flm and video alone journalism, flm & TV, emerging technologies contribute more than $100 billion to domestc like augmented reality (AR) and virtual reality GDP.8 The North American industry (VR), video games, and more. Primary business will generate $39.6 billion of revenue in 2019 — opportunites are related to the content (i.e. the a 11.7% increase from 2018, the fastest year- song, the , the TV series), and the platorm on-year growth rate of any global region.9 The or channel through which audiences listen, global video game market — currently $152 read, or view content. While the sector is vast, billion — is predicted to reach $196 billion in this paper will focus on content creaton and 2022 with a 9% CAGR. distributon platorms in flm & TV and video games, and how social impact can be leveraged The economic size and projected growth of through these mediums. the sector is also refected in its employment numbers. 2.6 million US jobs are supported Entertainment and media1 represented 2.5% by the flm & TV sector according to 2018 data of global GDP in 20182 or approximately (up from 2.1 million in 2017), with 47% higher $2.14 trillion. Global box ofce and home salaries than the natonal average for direct entertainment revenues were $96.8 billion,3 jobs.10 The US in 2018 while global revenues from traditonal and employed 230,914 people11 — representng over the top (i.e. streaming) TV reached $265 4.5% growth from 2017. In 2017, employment billion.4 The global video game market is in the video game sector grew more than predicted to reach $180 billion in 2021.5 double the rate of the US job market overall.12 At $735 billion, the U.S. has the largest The reach of media is powerful. 74% of U.S. entertainment and media industry, representng homes have a streaming device (up from 65% one-third of the global market and 3.7% of last year and 25% in 2010).13 Media use among

A Creatvity Lens: Impact Investng in the Creatve Economy 1 Upstart Co-Lab Deep Dive: Social Impact Media adults in the U.S. is 11 hours per day.14 70% • In 2017, women held only 18% of key of Americans play video games.15 Given this creatve roles (i.e. directors, screenwriters, signifcance, it is unfortunate that flm & TV and producers).22 video games have come under valid critcism • The majority of people working in the US — not just in recent years but for decades — video game industry are white (65%) and around sexism and a lack of diversity. Regardless male (74%).23 of the reasons why, the facts tell a striking story: • The Academy of Moton Picture Arts and A review of the 100 top grossing flms for each Sciences — the votng body for the Oscars — of the last 12 years revealed a signifcant lack of is 89% white and 73% male, although recent diversity:16 commitments have been made to diversity.24 • Only 28% featured female leads/co-leads Despite these limitatons and challenges, media • Only 16% featured leads/co-leads who were has demonstrated its potental to shif social Black/African American, Hispanic/Latno, norms and spur legislatve change on issues of Asian/Asian American signifcance; to promote diversity, equity, and inclusion by featuring the work of creatves • 71% of all speaking characters were white who refect the diversity of society; and to A new in-depth review of flms focusing on reach large and heterogeneous audiences Latno representaton17 showed only 4.5% of with the help of technology. Blockbusters like all speaking or named characters and 4% of Assassin’s Creed III: Liberaton, Atlanta, Black directors were Latno.18 Panther, Black-ish, Coco, Crazy Rich Asians, How to Get Away with Murder, and Never While 4.5% of U.S. adults identfy as LGBT,19 Alone have demonstrated that authentcally- only 1.1% of the 4,544 characters that could told, culturally-specifc stories can atract large be evaluated for apparent sexuality across the audiences, critcal acclaim — and make money. top 100 flms of 2016 were lesbian, gay, or Movements like #OscarsSoWhite, #TimesUp, bisexual.20 There are only 17 playable black #MeToo, and #WomenAreTooHardtoAnimate female protagonists in mainstream video have positoned the media sector as ready games.21 for investors prioritzing social justce. Nearly Who is in front of the or the protagonist all the major studios have diversity fast-track in the game may not be surprising once we programs.25 Given all these factors, it’s not realize who has creatve control: surprising that impact investors are beginning to take notce.

A Creatvity Lens: Impact Investng in the Creatve Economy 2 Upstart Co-Lab Deep Dive: Social Impact Media

The social impact media and festvals across the country connected movement audiences with flms highlightng issues they cared about.28 Film & TV Since the 1990s, there have been training Film and television have always addressed programs and similar initatves designed major social issues of the day. Environmental to diversify the media industry such as the awareness (Soylent Green, China Syndrome), Sundance Insttute’s Diversity Initatve,29 the women’s empowerment (Nine to Five, The City of Los Angeles’s Evolve Entertainment Color Purple), civil rights (To Kill a Mockingbird, Fund,30 and the Natonal Hispanic Media Guess Who’s Coming to Dinner, A Gentleman’s Coaliton.31 More recently, industry standards Agreement), and the ant-war movement (Deer like the Inclusion Rider32 (a clause included Hunter, Platoon, Apocalypse Now) are among in contracts to “counter bias in interviewing/ the many topics tackled through narratve auditoning and hiring/castng in specifc feature flm of the past 60 years. Television employment positons in the entertainment has played a similar role featuring African industry”), the ReFrame Stamp identfying Americans and women in roles that challenged gender balanced flm and TV projects,33 a stereotypes such as The Mary Tyler Moore pledge by leading flm festvals to reserve press Show, Murphy Brown, Roots, The Jefersons, passes for critcs of color,34 and the Britsh Good Times — even Star Trek. And there is no Film Insttute’s Diversity Standards outlining denying the role Will and Grace, The Ellen Show, diversity requirements for consideraton of a Brokeback Mountain, and other ttles played in BAFTA award,35 demonstrate a range of ways advancing the gay marriage U.S. Supreme Court to encourage greater diversity in the media verdict. sector.36 Ultmately, the potental for media to have social impact depends on the stories being Video Games told, who gets to tell them, and how audiences While recently the potental for video games to see themselves portrayed on screen. Startng promote violence, enable addictve behavior, in the 1950s, flm festvals26 and the “New and increase social isolaton has received a lot Hollywood”27 movement created opportunites of (ofen misplaced) atenton, video games for a new generaton of storytellers working have always had the power to drive learning beyond the major studios. In the 1980s, the and develop problem-solving and critcal Sundance Insttute and Sundance Film Festval thinking skills. Since the 1970s, games have ushered in the independent cinema movement been used to teach positve things like the with a focus on diversity of perspectve, basics of coding. In the 1980s, the proliferaton

A Creatvity Lens: Impact Investng in the Creatve Economy 3 Upstart Co-Lab Deep Dive: Social Impact Media

of personal computers and CD-ROMs in homes such as University of Southern California’s and classrooms led to an “edu-tainment” boom Game Innovaton Lab (2004) and Arizona with ttles like Where in the World is Carmen State University’s Center for Games & Impact Sandiego?, Reader Rabbit, and Math Blaster (2011) launched with a focus to expand the focused on geography, reading, and math.37 The body of research and talent pipeline leveraging 1990s saw ttles that engaged players in real games for the public good. These eforts world simulatons and cultural & civic issues, were rewarded when in 2013 the American like SimCity, Civilizaton, and Railroad Tycoon. Psychological Associaton published research In 2006, the Nintendo Wii reached a broad on the positve learning, health, and social audience by incorporatng physical ftness benefts of video games.41 applicatons and social play into video games. More recently, there are examples of successful In the 2000s, social impact video games really commercial impact game companies, and a came into their own. Major philanthropic growing body of popular social impact video foundatons began to fund research into the game ttles with sustainable revenue models. potental of games to drive social impact The revolutonary Oregon Trail franchise and make grants to the games themselves. (popular in the 1980s and 1990s) contnues Milestone philanthropically-supported ttles to evolve to the present day for mobile and showcase the range of social impact topics other platorms. Peacemaker (2007) simulates that can be the subject of a game: Re-Mission resolving the Israel-Palestne confict through a (2006) was developed by Pam Omidyar in two-state soluton. Minecraf (2011) promotes collaboraton with HopeLab Foundaton as creatvity, collaboraton, and problem-solving, a game for young cancer patents;38 iCivics and its educaton editon (2016) integrates (2009) from a team including the Honorable reading, writng, and math skills. E-Line Media’s Sandra Day O’Connor centers around how Never Alone (2014) is an adventure game based diferent branches of government work;39 on a traditonal Iñupiaq tale developed in Partcipatory Chinatown (2010) engages players collaboraton with the Cook Inlet Tribal Council in the master planning process of Boston’s of Alaska. This War of Mine (2014) is a war Chinatown. survival game based on the Siege of Sarajevo during the Bosnian War focusing on the civilian Games for Change was founded in 2004 “to experience of war. Papers, Please (2013) empower game creators and social innovators puts the player in the role of an immigraton to drive real-world change using games and ofcer in a dystopian geo-politcal landscape. technology that help people to learn, improve Akili Interactve42 is currently in Food and their communites, and contribute to make Drug Administraton trials for therapies fusing the world a beter place.”40 Academic centers

A Creatvity Lens: Impact Investng in the Creatve Economy 4 Upstart Co-Lab Deep Dive: Social Impact Media

neuroscience, technology and video game the gaming community.47 Unlike flm & TV, the entertainment. game industry has not yet come forward with voluntary standards refectng goals of diversity, Today, commercial social impact video games equity, and inclusion. span three categories: • Learning across a range of subjects including Relevant trends in flm & TV science, technology, and math and video games (STEM) The flm & TV and video games industries are • Health including physical ftness, cognitve booming. On-line and mobile distributon skills, mindfulness, and disease management of content and high rates of daily media consumpton are dramatcally afectng the • Broad social impact, including advocacy media landscape in the US. Growing evidence on topics such as civics, social justce, and suggests that entertainment investments are environmental conservaton, celebraton recession-proof; the entertainment industry of cultural heritage, confict resoluton, saw notable success during and immediately and more afer the 2008 recession.48 Like in the flm & TV sector, there are dedicated eforts to ensure video games refect the stories Zacks Investment Analysis’ review of companies and perspectves of a diverse community, within the Film and Television Producton and that the industry ofers a career path for a Distributon Industry indicates that the majority diverse workforce, and supports healthy beat earnings projectons in the most recent gaming communites. Gameheads trains quarter, with year-to-date total return outpacing 49 low-income students of color in iShares SP500. The dominance of streaming and development.43 Culture Shock Games platorms like Netlix indicates that companies develops narratves that accurately represent producing and licensing original content with experiences of people of color.44 Women robust user data capabilites will have the in Games Internatonal is a membership edge in the future. Analysts note that success organizaton promotng the inclusion and in the industry is now based on fexibility — advancement of careers in the global games responding to changing demographics and industry.45 Black Girl Gamers builds community consumer demand — over efciency. Even for black female gamers and promotes traditonal providers (eg. Comcast, AT&T, Dish) diversity in the gaming industry.46 Fair Play which have been hit in the short-term by this Alliance is a coaliton of more than 120 gaming transiton are projected to deliver for investors companies focused on reducing toxicity in as they leverage their strong assets and historical 50 gaming culture and encouraging inclusivity in positon to adapt to the new environment.

A Creatvity Lens: Impact Investng in the Creatve Economy 5 Upstart Co-Lab Deep Dive: Social Impact Media

In 2018, the world’s top 35 public game content while traditonal producers (like companies (eg. Tencent, Sony, Microsof, Apple, Disney, Viacom) have launched their own Actvision Blizzard) generated revenues of $114 streaming services for the same reason: billion, representng 14% growth over 2017.51 to be able to assess consumer preferences That year the U.S. video game industry logged and respond quickly to consumer demand. an 18% year-over-year increase in revenues. Large video game companies are also Goldman Sachs initated coverage of fve video out subscripton streaming services game stocks in 2019 under expectatons for high (e.g. Apple Arcade, Google Stadia) which single-digit growth across the sector (including will create high demand for new and console, PC and mobile revenues), multple diferentated game content. With the help upside opportunites, and a promising long- of technology, distributers can proftably term outlook for the industry, citng the $135b sell content designed for niche audiences industry as one to watch.52 Analysts predict into the long tail of the market as never e-sports, mobile gaming, subscripton models, before.57 In additon, social media ofers streaming services, and signifcant penetraton a promotonal platorm deepening viewer into new markets will act as long-term catalysts engagement to what they watch. With for gaming stocks. 53 The Motley Fool lists Take- unprecedented choice, consumers have Two Interactve, Tencent, Actvision Blizzard, increased expectatons for the media they Electronic Arts, and Capcom as top gaming consume, including its personal relevance stocks for the long-term in their useful 2019 and authentcity. primer for investng in video games.54 Growing diversity of viewers: A refecton Two forces currently shaping the media sector of shifing populaton demographics, put flm & TV and video games in a positon to audiences and gamers in the U.S. are more deliver superior fnancial and social return for diverse than ever. More than half of the impact investors: gaming populaton in the U.S. between ages 6-29 will be people of color within 10 Changing distributon and consumpton: years.58 African Americans, Asian Americans, Content is increasingly delivered through and Latnos represent an outsized and the and mobile via an ever-growing growing share of flmgoers measured by array of channels and platorms. Binge yearly atendance, frequent atendance, and watching55 is commonplace, partcularly box ofce tcket sales.59 So it’s no wonder among adults age 18-34 who consume that the streaming giants are engaging 62% of their media via a streaming diverse story tellers who can reach these service.56 Streaming platorms (like Netlix, audiences, such as Charles King and Shonda Amazon, Hulu) are producing their own

A Creatvity Lens: Impact Investng in the Creatve Economy 6 Upstart Co-Lab Deep Dive: Social Impact Media

Rhimes (Netlix60), and bringing on C-suite despite the success of a flm like Pixar’s Coco executves like Albert Chang and Vernon which demonstrated how an investment in Sanders (Amazon61) to lead an inclusive authentc storytelling can win an Oscar and culture from the top. Similarly, leading video set box ofce records in a range of markets game companies like Riot Games and Twitch including China, Mexico, and the United have brought on diversity executves,62 States. and popular ttles like Star Wars, Walking Questons about risk: Most impact Dead, and Overwatch feature multcultural investors are not familiar with the media characters and themes.63 Celebrity sector and allow that lack of industry infuencers like Spike Lee, Lin-Manuel knowledge to hold them back from Miranda, and Ali Wong, and emerging investng. Like any sector impact investors community-specifc platorms like BET+, are actvely engaged in — from sustainable Revry (LGBTQ), and Black on Purpose TV fsheries to wind power to cancer drugs — help ensure audiences fnd these new ttles. a combinaton of due diligence, working Challenges to scaling with experienced industry professionals, social impact media and common sense risk mitgaton (like investng in a portolio of opportunites Despite increased demand for content, called a “slate” in flm & TV) can close the decreased costs of distributon, and the ability industry knowledge gap. While there are as never before to target audiences looking to opportunites to invest in content (which see their own diversity on screen, there are may present a unique set of risk factors), three major barriers to scaling social impact there are also investment opportunites in media: distributon platorms (like Seed & Spark or Kweli.tv) and physical infrastructure (like Questons about proftability: Industry sound stages) which share atributes with leaders point to a lingering mispercepton other investment opportunites familiar to that content with a strong social value impact investors (i.e. fntech platorms and necessitates a trade of with entertainment community real estate). value (and by implicaton proftability). Somehow social impact in media is ofen Lack of standards: Despite emerging equated with “eatng your vegetables” initatves, there is a dearth of accepted rather than a great story or engaging industry-wide standards for diversity and gameplay.64 Similarly, stories from a specifc sustainability in flm & TV or in video games, community or culture are falsely viewed as especially when compared to other areas niche, lacking mainstream appeal. This is impact investors are focused on, like ethical

A Creatvity Lens: Impact Investng in the Creatve Economy 7 Upstart Co-Lab Deep Dive: Social Impact Media

fashion and sustainable food. Measurement recognizing the power of interactve technology frameworks are emerging for distnct and games to prepare young people for success aspects of impact media, but there is not in school, careers and communites. Since then, yet a single soluton that cuts across the other foundatons including Omidyar Network, entre industry. Existng impact investng Robert Wood Johnson Foundaton, the Knight metrics designed for non-media businesses Foundaton, the Rockefeller Foundaton, and delivering products and services have the United Natons Foundaton have made limited applicability in the content-focused grants and program-related investments to social impact media sector. This means specifc games to promote goals related to that impact investors engaging in social health, educaton, empathy and empowerment. impact media today need to be comfortable As 21st century Silicon Valley entrepreneurs contributng to the development of relevant began to engage in philanthropy and impact impact norms and metrics. investng, they gravitated to Hollywood. Impact investng in These new infuencers understood the social impact media power of media to drive social change and recognized how technology was altering 40 years ago, philanthropic foundatons media consumpton. eBay co-founder Jef recognized the power of TV: the Ford Skoll launched Partcipant Media to produce Foundaton and the Carnegie Corporaton commercially-successful socially-driven flms helped bring Sesame Street,65 Mister Rogers’ like Spotlight, Roma, and An Inconvenient Neighborhood, and similar programs to Truth.69 eBay’s other co-founder Pierre Omidyar generatons of kids. As part of its social justce and his wife, Pam, launched HopeLab to bring mission, the Ford Foundaton’s JustFilms health games like Re-Mission to cancer patents, program has funded social justce storytelling and their fnancing of flms such as Merchants and the arts infrastructure that supports it since of Doubt helped expose shadowy tactcs 2011. Fifeen years ago,“flm-anthropists”— employed by the . philanthropists backing social issue In 2017, widow of Apple founder Steve Jobs, documentary and independent flm — started Laurene Powell Jobs, along with Ford, Kellogg, to blend concepts of philanthropic giving, and other foundatons, made a $150 million investng, and producing by forming groups like program related investment to support a Impact Partners66 and Chicken & Egg.67 slate of six flm and television projects by Startng in 2004, the John D. and Catherine T. Charles King’s MACRO, the producton banner MacArthur Foundaton pioneered grantmaking behind Fences and Mudbound. The goal of the and research around Digital Media & Learning,68 investment was to support MACRO’s mission

A Creatvity Lens: Impact Investng in the Creatve Economy 8 Upstart Co-Lab Deep Dive: Social Impact Media

to create content “driven by people of color Productons and Partcipant Media — suggest that encompass universal themes to which all opportunites are growing for investors seeking people can connect and relate.”70 This was a to be socially responsible and have impact. (See breakthrough example of an impact investment Appendix D for other examples of emerging in a producton studio (as opposed to a single companies.) ttle) where unlike Skoll and Omidyar, the investors did not take a creatve role (efectvely Measuring the impact of social funding their own projects). Hopefully this impact media signals an important milestone for the Current measures used in social impact media expansion of impact investng and social impact focus on audience engagement with the media. subject mater, and diversity of the creatves Upstart Co-Lab’s recent landscape analysis making — and the people represented in — the of 100 impact investment funds actve in the story. But impact investors can also consider creatve economy revealed that 24% invested in good environmental practces and economic impact media.71 These funds, which represent development impacts when assessing their an estmated $25.7 billion, include New Media investments in the media sector. Ventures72 and Backstage Capital.73 Building the feld there are business accelerators preparing Audience Engagement impact media entrepreneurs to atract impact The Partcipant Index mines social media capital, including Creatve Startups,74 the conversatons and audience opinion data to leading accelerator for creatve companies; and determine audience reactons to flm, TV, New Inc.75 the New ’s efort to help and video content. The Media Measurement creatves develop sustainable business models. Framework similarly looks at how individuals (See Appendix C for more Funds, Accelerators are changed from their experience (i.e. and Angel Networks.) awareness, attudes, behaviors), as well as whether there are societal changes such as Upstart Co-Lab’s analysis of more than 125 policy change and resource allocaton. While creatve economy companies and funds raising many academic and medical studies explore the impact capital today reveals 18 media examples positve psychological and cognitve efects of collectvely raising more than $232 million. This video games, a useful framework for measuring includes E-Line Media’s new Impact Slate Game player engagement has not yet taken hold. Fund and kweliTV, an interactve streaming platorm that celebrates the African Diaspora. Diversity The 122 media and communicatons B UCLA (Diversity in Hollywood) and USC Corporatons76 in the U.S. — including Cage Free

A Creatvity Lens: Impact Investng in the Creatve Economy 9 Upstart Co-Lab Deep Dive: Social Impact Media

Annenberg’s Inclusion Initatve (Inequality Following Hurricane Katrina, flm & TV in Popular Films) publish yearly studies producton was one of the few industries able on representaton across the flm & TV to carry on in the devastaton of industry, connectng these trends to box thanks in part to a robust tax program ofce performance and proftability. The which incentvized hiring and spending locally. Internatonal Game Developers Associaton This efort was anchored by Second Line publishes an annual survey tying issues of Stages which was founded in 2009 as the frst diversity to the game industry’s future success independent green studio in the US. Today and growth prospects.77 Second Line delivers 200-300 jobs per year and drives economic mobility and environmentally Environment sustainability for the NOLA region. Investors can reward producers (like In Georgia, flm & TV represented $9.5 billion NBCUniversal, Fox, Warner Bros.) and projects of economic impact in 2017, including 85,300 (like Marvelous Mrs. Maisel, The Amazing jobs and $4.2 billion in total wages (direct and Spider-Man 2, and Danny Boyle’s Yesterday) indirect).82 This was the result of a conscious that follow the Green Producton Guide78 15-year investment by the state to become a from the Producers Guild of America, the center for flm & TV. Green Seal79 certfcaton scheme from the Environmental Media Associaton, or work With more than 500 serialized shows in with producton sustainability consultants producton in North America in 2018,83 other such as Earth Angel.80 These eforts target regions with limited industry but lots of natural the large ecological footprint of flm & TV assets are looking to become media economies. producton which includes waste from sets, In New York’s Hudson Valley, Upriver Studios carbon emissions, flm chemicals, and food (a New York State beneft corporaton) and waste. Young companies like Tandem Pictures Stockade Works (a non-proft) aim to create are prioritzing environmental sustainability on 2,000 quality jobs by following Georgia’s set and developing new best practces to share example. Diversity in who gets these jobs can what they learn with the feld. be linked to the government flm tax , as California demonstrated in 2018.84 Economic Development Film & TV producton ofers an economic Other development soluton for states and regions Investors focused on impact media can also willing to ofer fnancial incentves81 and invest use general impact assessment tools, including in the human capital and physical infrastructure IRIS, B Analytcs, and the GIIRS portolio required. ratngs system, which focus on the culture and

A Creatvity Lens: Impact Investng in the Creatve Economy 10 Upstart Co-Lab Deep Dive: Social Impact Media

practces of a company. These tools focus on Entertainment investments are uncertain by environmental impacts, worker consideratons, nature — but impact investors are in a unique impacts on local communites, and other areas positon to drive their impact objectves and relevant to media. Creatvity and culture are return expectatons by focusing on diverse also at the heart of four of the United Natons stories and new voices, emerging platorms Sustainable Development Goals (SDGs): and distributon channels, and the physical educaton, employment, sustainable cites, infrastructure for producton and job pipeline and sustainable producton and consumpton. for media careers. Many impact investors align their strategy Film & TV and video games have the power to to the SDGs. (See Appendix E for a list of change attudes and behaviors and get people measurement systems and standards.) to care about issues on a deeply personal level. Conclusion The stories they convey are powerful because they are personal, emotonal, and make facts Some impact investors see media as a means come to life. This golden age of storytelling is a of communicatng on a partcular social issue. critcal moment for impact investors to not just As an investor commited to the environment, harness the power of impact media to deliver they might invest in a game about oceans as social change, but also to help shape who the part of a portolio that includes sustainable creatves, producers, and audiences will be in fsheries and alternatves to plastc. Other the media sector of the future. investors see the power of media to be used limitlessly, as a tool for advancing the full complement of impact priorites: diversity, equity and inclusion; preserving culture and heritage; generatng quality jobs and economic development; benefts for women and girls; and focusing on social justce.

A Creatvity Lens: Impact Investng in the Creatve Economy 11 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix A: Social Impact Media Organizatons

Center for Games Video games Launched by Professors Sasha Barab and James Gee in partnership with and Impact E-Line at Arizona State University Cinema of Change Film/TV Maintains a Cinema of Change ecosystem which serves as a directory of the largest collecton of 130+ major players in social impact entertainment Defne American Film/TV Nonproft consultant to flm/TV to humanize the conversaton on immigraton and fght ant-immigrant hate through storytelling; produces annual flm festval about immigraton and American identty Evolve General LA public-private partnership that creates new career opportunites for Entertainment communites that have been historically excluded from the entertainment Fund industry — women, people of color, and low-income Angelenos Future of General Community of media, technology and communicatons professionals Storytelling exploring how storytelling is evolving in the digital age; produces workshops, showcases, exhibitons and an annual summit Games for Video games For more than 15 years has facilitated the creaton and distributon of Change social impact games that serves as critcal tools for humanitarian and educatonal purposes. Maintains a database of more than 175 games that engage contemporary social issues in a meaningful way MAKERS General Media brand working to accelerate women’s movement through stories of real-life experiences that ignite passion and acton Natonal Hispanic General Media watchdog for the Latno community; ensuring that Latnos are Media Coaliton fairly and consistently represented in news and entertainment and that their voices are heard over the airwaves and on the internet The Representaton Film/TV Founded by First Partner of California, Jennifer Siebel Newsom, focused Project on limitng gender stereotypes in media and society through flms, programming, youth outreach and social media actvism Skoll Center for Film/TV Newly launched center at UCLA to advance the power of entertainment Social Impact and performing arts to inspire social change Entertainment Sundance Insttute Film Nonproft dedicated to the discovery and development of independent artsts and audiences; programs that seek to discover, support and inspire independent flm, media and theater artsts in US and around the world and bring new audiences into their work Women Make Film The largest distributor of flms by and about women in the world; Movies for more than 45 years has helped elevate diverse women directors and producers and improved equity in the flm industry

A Creatvity Lens: Impact Investng in the Creatve Economy 12 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix B: Reports and Artcles on the Impact of the Media Industry

Cara Buckley, New York Times, Artcle archive Cara Buckley is a leading journalistc voice on diversity and social issues in Hollywood with regular coverage on the topic. www.nytmes.com/by/cara-buckley Cynthia Litleton, Is Hollywood Doing Enough to Fight the Climate Crisis?, Variety, September 2019 The industry magazine Variety featured this cover story in its September 2019 issue exploring whether Hollywood can “muster its storytelling power and infuence to sound the alarm on global warming” through content with organizatons like the NRDC and sustainability practces on set. www.variety.com/2019/biz/features/climate-crisis-hollywood-environment-movies-tv-1203329390 Dr. Darnell Hunt, Dr. Ana-Christna Ramón and Michel Tran, UCLA Hollywood Diversity Report 2019 Sixth editon of a series of annual reports examining relatonship between diversity and profts in the entertainment industry. Ofers comprehensive analysis of representaton on-screen across demographic groups. www.socialsciences.ucla.edu/wp-content/uploads/2019/02/UCLA-Hollywood-Diversity- Report-2019-2-21-2019.pdf Ennel van Eeden and Wilson Chow, PwC, Perspectves from the Global Entertainment & Media Outlook 2018-2022 Annual report into data and analysis of 15 segments across 53 territories; this iteraton spotlights a new wave of convergence across entertainment & media, technology and telecommunicatons. www.pwc.com/gx/en/entertainment-media/outlook/perspectves-from-the-global-entertainment-and- media-outlook-2018-2022.pdf Ian Simmons, Spotlight on Impact Investng: In Hollywood, Big Issues Can Mean Big Business, March 2016 Guest post from co-founder of Blue Haven Initatve which makes the case for atractng impact investment to flm & TV by highlightng recent success of impact media companies. www.forbes.com/sites/kerryadolan/2016/03/18/spotlight-on-impact-investng-in-hollywood-big-issues-can- mean-big-business/#3565c2bc730f ImpactAlpha (impactalpha.com), the leading news publicaton for the impact investng industry, regularly features impact media as part of their Creatve Economy beat. Recent coverages on the flm/TV side includes Charles King’s MACRO;85 Queen Latfah,86 who joined the investment commitee for Essence Ventures which launched a $20 million fund for flm, TV and documentary productons by women of color; Laurene Powell Jobs and the Emerson Collectve, “equal parts think tank, foundaton, venture capital fund, media baron, arts patron and actvist hive”;87 Roshnee Desai,88 the cartoonist using visual art to spark acton around women’s right and social issues in India; all in additon to coverage of Upstart’s work89 analyzing the current impact investng landscape.

A Creatvity Lens: Impact Investng in the Creatve Economy 13 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix B contnued

Recent coverage of impact video game happenings include Enuma,90 maker of educatonal games that cater to special needs students and others who face cultural and economic barriers to educaton, which received $4m in new fnancing in April 2017; and Marcopolo,91 which raised $8.5 million for early educaton apps in April 2017. Liz Manne, Unbound Philanthropy and Nathan Cummings Foundaton, #PopJustce Report series, March 2016 Serves as a guide for funders, advocates, and entertainment industry professionals interested in the promise and potental of popular culture as an agent of change, including Social Justce and the Promise of Pop Culture Strategies, Mapping the Players and Economic Data & Foundaton Grantmaking. www.nathancummings.org/popjustce-report-series Neilsen, Total Audience Reports (Quarterly) Measures and analyzes media audiences across platorms, providing key stats quarterly on demographics, consumer habits and tastes, and levels of engagement. www.nielsen.com/us/en/insights/reports/2019/q3-2018-total-audience-report.html UCLA Theater, Film and Television — Skoll Center for Social Impact Entertainment – The State of Social Impact Entertainment (www.thestateofsie.com), March 2019 Landmark report ofering a comprehensive overview of the impact entertainment industry. Features a map92 of the key stakeholders behind successful works of impact entertainment — television, narratve flm, documentary flm, funders, impact agencies, conveners, and more — as well as a calendar93 of relevant convenings across impact media. Includes numerous artcles by infuencers such as the authors94 of UCLA’s Hollywood Diversity Report and leaders95 of CAA, the frst talent agency to develop a social impact department. Peter Bisanz, executve director the center, explains in a blog post why social impact entertainment is ready for the spotlight in Hollywood96 — that mass entertainment and deeper social messages are not exclusive. USC Annenberg Inclusion Initatve, Inequality Across 1,200 Popular Films – Examining Portrayals of Gender, Race/Ethnicity, LGBT & Disability from 2007-2018 Leading think tank studying diversity and inclusion in entertainment through original research and sponsored projects; each year adds the top 100 flms to the study to provide aggregate data. www.assets.uscannenberg.org/docs/inequality-in-1200-flms-research-brief_2019-02-12.pdf USC Annenberg Norman Lear Center, Hollywood, Health & Society Regularly publishes impact studies and content analyses on topics such as how TV storylines afect us and transgender portrayals. www.hollywoodhealthandsociety.org

A Creatvity Lens: Impact Investng in the Creatve Economy 14 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix C: Social Impact Media Investment Funds, Accelerators, Investor Networks

Creatve Startups Video games Leading accelerator for companies in the creatve economy including games and interactve media; based in Santa Fe with a footprint around the world Edge Creatve Video games Fund launched in 2015 providing capital and services to creatve Enterprise Fund content-driven enterprises Endless Network Video games Cultvates digital literacy among youth around the world; its Endless Studios is an incubator for “learn to code” games, enabling the coming generaton to shape their technology instead of being shaped by it Essence Ventures Film/TV Created the Essence Creators and Makers Fund, a $20 million funding opportunity that will “create and fnance flm, television, digital and documentary-style content that refect the lives and experiences of women of color.” The fund is also an efort to create additonal revenue streams to reinvest back into the community to “black makers and creators so that we can own our content and not just be work for hire.” Mater General Impact fund which includes a -oriented accelerator model to support early-stage media ventures “that have the potental to make society more informed, connected and empowered” Media General Provides afordable fnancing and technical assistance to independent Development news and informaton businesses in challenging environments, helping Investment them to become fnancially sustainable. They invest in media that Fund provide the news, informaton and debate that people need to build free, thriving societes. Has invested more than $172.5 million in over 115 independent news businesses in 40 countries since 1996. New Inc. General Incubator out of the New Museum that helps creatve practtoners across art, design and technology develop sustainable business models New Media General An impact fund catalyzing progressive change; incorporates a seed fund Ventures and angelnetwork, as well as a structure that allows investment in both nonproft and for-proft business models in advocacy, civic engagement, and votng systems, as well as the media and story-telling platorms Pop Culture Film/TV Philanthropic resource and funder learning community that uses grantmaking, Collaboratve convening, narratve strategy, and research to transform the narratve landscape around people of color, immigrants, refugees, Muslims, and Natve people especially those who are women, queer, transgender, and/or disabled. Included are Unbound, the Nathan Cummings Foundaton, Ford Foundaton, Open Society Foundatons, and W.K. Kellogg Foundaton. Staton 12 Video games Venture capital investment fund focusing on media, entertainment, gaming, and other related industries VR for Good Video games Oculus-hosted Creators Lab leveraging VR to drive meaningful social change

A Creatvity Lens: Impact Investng in the Creatve Economy 15 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix D: Representatve Social Impact Media Companies

11 Bit Video games Polish development company whose seminal game This War of Mine focuses on Studios the civilian experience of surviving war as opposed to frontline combat. Based on Siege of Sarajevo during the Bosnian War. Alucia Video games Media producton studio — including video games — focused on oceans and Productons environmental issues is part of a $100m+ efort by the Dalio Family Foundaton Anonymous Film/TV Producton and management company partally owned by Emerson Collectve Content prioritzing projects that highlight issues of social justce and inspire change Archer Gray Film/TV Hybrid producton, fnance and venture investment company with a flm & TV arm that develops, produces and fnances original stories and a venture arm which invests in innovatve media companies; focused on amplifying diverse voices and promotng equality. Brainpop Video games Creator of animated content covering topics within Science, Math, Social Studies, English Language Arts, Technology, Engineering, Arts, Music, Health, Reading, and Writng Cinereach Film Independent flm producton company, fnancier and foundaton dedicated to the support of vital, artul flms. Helps expand flms’ creatve potental through adaptve development, fnancing, producton, and other support models that align with the unique vision of each supported flmmaker. Projects include Sorry to Bother You, I Am Not Your Negro, Citzenfour and Beasts of the Southern Wild. E-Line Media Video games Double-botom line video game developer and publisher harnessing the power of video games to help players understand and shape the world, including BAFTA-winning Never Alone. Key driver of impact game initatves including Natonal STEM Video Game Challenge, the Games and Learning Council, and the ASU Center for Games and Impact. Filament Video games Producton studio that exclusively creates learning games. The company’s Games games combine best practces in commercial game development with key concepts from the learning sciences. First Look Film/TV Launched by Pierre Omidyar; American media organizaton with award- Media winning entertainment studio, Topic, which develops, produces and fnances content for all screens including feature flms, television, digital series and podcasts. Groundswell Film/TV Independent flm fnancing company behind many impact ttles across Productons flm & TV Hello Sunshine Film/TV Media brand founded by Reese Witherspoon focused on female authorship and agency

A Creatvity Lens: Impact Investng in the Creatve Economy 16 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix D contnued

MACRO Film/TV Media company founded by Charles King representng the voice and perspectve of persons of color. Creates and fnances flm, TV, digital content, technologies and brands that encompass universal themes to which all people can connect and relate. One Film/TV Producer Scot Budnick’s actvist content company with $50 million in slate Community fnancing for content seeking to increase diversity and representaton in Hollywood; works with ttles in various stages of development. Partcipant Film/TV Founded by Jef Skoll; annually produces up to six narratve feature flms, Media fve documentary flms, three episodic television series, and more than 30 hours of digital short form programming (SoulPancake) all aimed at entertainment that inspires social awareness and engages audiences to partcipate in positve social change. Films have collectvely earned 73 Academy Award nominatons. Playmatcs Video games Playmatcs specializes in creatng digital and real-world interactve games and experiences for people all around the world. Founded in 2009, Playmatcs has collaborated with PBS, AMC, the New York Public Library, and others to create unique experiences including from web games, museum installatons, digital comics, storytelling games, and augmented reality. Prodigum Film/TV Social impact digital cinema and video producton company, including moton Pictures pictures, music videos and commercials Schell Games Video games Full-service game design and development company specializing in creatng transformatonal games and innovatve, interactve experiences Second Line Film/TV New Orleans independent green flm studio, the frst in the US. Born in the Stages afermath of Katrina to help build the local economy through flm producton. Leverages traditonal flm industry tax credits in addito to New Markets Tax Credits, state and federal Historic Tax Credits — bedrocks of the community development feld — to drive quality jobs, neighborhood revitalizaton, and educaton opportunites. Tiltactor Video games games that use psychological principles to promote learning, attude change, and behavior change; robust portolio of commercial games and academic research Upriver Film/TV Forming as a certfed B Corporaton Limited Partnership to upft and manage a Studios total of 105,000 square-feet of state-of-the-art sound stage and post-producton studios in New York’s Hudson Valley. Will prioritze sustainability and inclusion, develop an efcient, environmentally innovatve facility, and draw from a workforce trained through nonproft partner Stockade Works’ Crew Boot Camp program to help bring quality jobs back to the post-industrial Hudson Valley.

A Creatvity Lens: Impact Investng in the Creatve Economy 17 Upstart Co-Lab Deep Dive: Social Impact Media

Appendix E: Social Impact Media Measures and Standards

The Britsh Film Insttute Diversity Standards (www.bf.org.uk/supportng-uk-flm/diversity-inclusion/bf- diversity-standards) serve as guidance policy for project funding that focuses on underrepresented groups in flm and media. These standards include on-screen representaton, themes and narratves; project leadership and creatve practtoners; industry access and opportunites; and opportunites for diversity in audience development. Three major movie funders in Britain have signed on, as have the BAFTA Awards.97 Deepening Engagement for Lastng Impact, a 2013 study from the Gates Foundaton and Knight Foundaton ofers the industry standard Media Measurement Framework (www.dl.orangedox.com/Media-Measurement- Framework). Impacts are categorized as “direct” and “cumulatve” and increase in scale at each level: • Direct impacts (resultng in changed individuals): Awareness/knowledge, Attudes/beliefs, Behaviors Cumulatve impacts (resultng in changed groups, insttutons and systems): Social norms, standards; • Policies, public discourse, movements, resource allocaton; Social or physical conditons (poverty, health, conservaton) Doc Society has the industry standard Impact Field Guide & Toolkit (www.impactguide.org) which is a comprehensive set of tools and guides designed for all those working in flm to drive impact. Includes worksheets, impact plans, sample budgets + MOUs. Also includes the framework Analyzing the Story Environment98 to determine which types of flms are most successful and defning success. E-line Media (www.elinemedia.com) has developed a worksheet99 for creators of impact games which serves as a useful framework for determining where and how games drive outcomes which impact investors can track. Topics include: Impact objectves and assessment plan; target audience (demographic and psychographic); Context (consumer or insttutonal); Platorm & distributon; Game design The Environmental Media Associaton’s Green Seal (www.green4ema.org/ema-green-seal-producton) is a recogniton program honoring progress in sustainable producton. Producton companies are assigned ratngs based on how well they compy with EMA’s sustainability criteria as well as the sustainability departments of the major studios. The Green Producton Guide (www.greenproductonguide.com) by the Producers Guild of America features a searchable database of recommended green vendors and two tools: the Producton Environmental Accountng Report (PEAR) – a downloadable carbon footprint calculator — and the Producton Environmental Actons Checklist (PEACH), which details best practces for sustainable flm and television producton. Partcipant Media (www.partcipantmedia.com) developed The Partcipant Index (TPI), a media impact research system that examined the social impact of entertainment on its audience through a mixed dataset on social media conversatons, viewership informaton, and audience opinion data.100 The ReFrame Stamp (www.reframeproject.org/stamp), co-created by Women in Film Los Angeles and the Sundance Insttute and launched with IMDbPro, is a mark of distncton based on criteria101 that recognizes flm & TV productons with women in key on- and ofscreen jobs.102 Dr. Stacy L. Smith at USC Annenberg developed an Inclusion Rider (www.assets.uscannenberg.org. s3.amazonaws.com/docs/inclusion-rider-template.pdf) — a “living” customizable template — to “counter bias in interviewing/auditoning and hiring/castng in specifc employment positons in the entertainment industry.” This includes hiring people from underrepresented groups for roles on screen and behind the camera. (Warner Bros. is the only major studio to date to commit to using inclusion riders.)103

A Creatvity Lens: Impact Investng in the Creatve Economy 18 Upstart Co-Lab Deep Dive: Social Impact Media

Acknowledgements Thank you to The Knight Foundaton; Madison Wells Media (MWM); the Waterman II Fund of the Philadelphia Foundaton, at the recommendaton of David Haas; and Veris Wealth Partners for supportng a day-long discussion on “Impact Investng and Social Impact Media” in February 2019 which informed this research.

The following individuals partcipated in this discussion:

Lalo Alcaraz, Cartoonist Ken Hertz, memBrain LLC Adrian Alperovich, Madison Wells Media Maegan Houang, Writer/Director Darla Anderson, Netlix Jess Jacobs, Invisible Pictures Michael Angst, E-Line Media Jason Fitzroy Jefers, Third Horizon Arteen Arabshahi, WndrCo Jonathan David Kane, Borscht Corporaton Melinda Arons, Partcipant Media Robert Karimi, The People’s Cook Marcela Davison Aviles, The Chapultepec Group Samantha Katz, Lef Tackle Capital Dennis Bartels, Endless Network Charles King, Macro Ventures Hebru Brantley, Angry Hero Entertainment Clint Kisker, MWM Laura Callanan, Upstart Co-Lab Mary Stuart Masterson, Upriver Studios Beth Davenport, Upriver Studios Marie-Louise Mendy, CIT Bank Nonny de la Peña, Emblematc Group Julie Menter, New Media Ventures Jessica Devaney, Multtude Films Bonny Moellenbrock, Millbrook Impact Joosje Duk, Filmmaker Aric Noboa, Discovery Learning Alliance Jackie Emerson Julia Paliare, RSL Investments Jed Emerson, Blended Value Eric Phillips, Angry Hero Entertainment Patricia Farrar-Rivas, Veris Wealth Partners Kevin Plunket, Jigsaw Productons/ Elevaton 7 Danielle Feinberg, Pixar Gigi Pritzker, MWM Anders Ferguson, Veris Wealth Partners Abby Pucker, MWM Brigid Ferraro, Smithsonian Enterprises Victoria Rogers, Knight Foundaton Amy Fredeen, Cook Inlet Tribal Council, Inc. DeShuna Spencer, kweliTV Alan Gershenfeld, E-Line Media Kareem Tabst, O Cinema Nicolas Gonda, Meow Wolf Megan Westerby, MWM Mariah Gregory, Madison Wells Media Diane Wheeler, Second Line Stages David Haas, Wyncote Foundaton Williams, MWM John Hendrix, Mississippi Band of Choctaw Indians Simon Wise, Mucho Mas Media

A Creatvity Lens: Impact Investng in the Creatve Economy 19 Upstart Co-Lab Deep Dive: Social Impact Media

The following MBA students from UCLA served as notetakers for the “Impact Investng and Social Impact Media” discussion in February 2019: Emily Bestwick Sarah Klein Oxana Ermolova Ashley Wright Helena Hong

Thank you to the following experts who assisted with this study: Peter Biskind, flm historian Jonny Blitstein, Tandem Pictures Leah Fischman, LF Strategies Alan Gershenfeld, E-Line Media Kevin Plunket, television writer and producer Marlene Saritzky, MSS Associates Diane Wheeler, Second Line Stages

Upstart Co-Lab Advisory Board Cathy Clark, Director of CASE i3, Fuqua School of Business, Duke University Jed Emerson, Chief Impact Strategist, ImpactAssets Jonathan Law, Partner, McKinsey & Company Will Rosenzweig, Co-founder and Managing Partner, Physic Ventures Surita Sandosham, Executve Director, Heartland Alliance Internatonal Andrew Stern, Founder and Executve Director, Global Development Incubator Dennis Whitle, CEO, Feedback Labs

Upstart Co-Lab Team Laura Callanan, Founding Partner Ron Anahaw, Program Assistant Nam Phuong Doan, Program Administrator Sarah Lang, Associate Ward Wolf, Senior Associate

This study was authored by Ward Wolf and Laura Callanan.

A Creatvity Lens: Impact Investng in the Creatve Economy 20 Upstart Co-Lab Deep Dive: Social Impact Media

Endnotes

1 Per PwC, accounts for 17 segments, including advertsing, books, cinema, internet video, magazines, music, newspaper, TV, video games and virtual reality — www.pwc.com/gx/en/industries/tmt/media/outlook.html 2 www.pwc.com/gx/en/entertainment-media/pdf/outlook-2017-curtain-up.pdf 3 www.mpaa.org/press/new-report-global-theatrical-and-home-entertainment-market-reached- 96-8-billion-in-2018 4 www.globenewswire.com/news-release/2018/10/24/1626350/0/en/Global-TV-Databook-2015- 2018-Revenues-will-Reach-265-Billion-in-2018-from-254-Billion-in-2017-234-Billion-in-2015.html 5 venturebeat.com/2018/04/30/newzoo-global-games-expected-to-hit-180-1-billion-in- revenues-2021 6 www.selectusa.gov/media-entertainment-industry-united-states 7 www.selectusa.gov/media-entertainment-industry-united-states 8 www.arts.gov/art-works/2018/taking-note-flm-industry’s-contributons-natonal-and-state- economies 9 www.newzoo.com/insights/trend-reports/newzoo-global-games-market-report-2019-light- version/ 10 www.mpaa.org/wp-content/uploads/2019/03/Economic_contributon_US_infographic_Final.pdf 11 www.ibisworld.com/industry-trends/market-research-reports/informaton/moton-picture- sound-recording-industries/video-games.html 12 www.businesswire.com/news/home/20170214005285/en/U.S.-Video-Game-Industry-Expands- 50-States 13 www.multchannel.com/blog/study-74-u-s-tv-homes-have-at-least-one-connected-tv-device 14 www.qz.com/1344501/americans-now-spend-11-hours-with-media-in-an-average-day-study/ 15 Entertainment Sofware Associaton, “Essental Facts About the Video Game Industry,” www.theesa.com, 2018 16 www.assets.uscannenberg.org/docs/inequality-in-1200-flms-research-brief_2019-02-12.pdf 17 www.assets.uscannenberg.org/docs/aii-study-latnos-in-flm-2019.pdf 18 www.annenberg.usc.edu/news/research-and-impact/latnos-lose-out-when-it-comes- hollywood-flms 19 www.news.gallup.com/poll/234863/estmate-lgbt-populaton-rises. aspx?g_source=link_NEWSV9&g_medium=TOPIC&g_campaign=item_&g_ content=In%2520U.S.%2c%2520Estmate%2520of%2520LGBT%2520Populaton%2520Rises %2520to%25204.5%2525

A Creatvity Lens: Impact Investng in the Creatve Economy 21 Upstart Co-Lab Deep Dive: Social Impact Media

20 www.annenberg.usc.edu/research/mdsci/hollywood-stcks-script-flms-arent-more- inclusive-despite-decade-advocacy 21 www.theguardian.com/technology/2017/mar/15/video-game-industry-diversity- problem-women-non-white-people 22 www.womenintvflm.sdsu.edu/wp-content/uploads/2018/01/2017_Celluloid_Ceiling_Report.pdf 23 www.qz.com/quartzy/1467237/video-game-companies-leave-much-more-than-just-money- on-the-table-if-they-lack-diversity 24 www.complex.com/pop-culture/2016/07/the-academy-oscarssowhite-john- boyega-idris-elba 25 For example, NBC Universal has created an entre diversity division and hosts labs and contests like NBC ShortsFest and StandUpNBC to discover diverse and female creators 26 The Columbus Internatonal Film & Video Festval is credited as the frst festval established in the US in 1953 — www.columbusinternatonalflmfestval.splashthat.com 27 Also called the American New Wave or Hollywood Renaissance, New Hollywood is a period from the 1960s-80s in which scores of new young voices and flmmakers came into prominence and the role of the major studio was deemphasized in favor of the director. 28 Frameline (founded 1976, the country’s longest-running LGBT festval); Natve American Film and Video Festval (founded in 1979); Philadelphia Jewish Film Festval (1981); Rocky Mountain Women’s Film Festval (1987); Pan African Film Festval (founded 1992, the largest black flm festval in US); Environmental Film Festval in DC (founded 1993, longest running environmental flm festval); Slamdance; and Arab Film Festval (1996). 29 The Sundance Insttute Diversity Initatve aims to increase diversity of projects submited for consideraton to Sundance programs — www.sundance.org/initatves/diversity 30 Los Angeles public-private partnership that creates new career opportunites for communites that have been historically excluded from the entertainment industry – www.lamayor.org/ mayor-garcet-launches-evolve-entertainment-fund-boost-diversity-entertainment-industry 31 Media watchdog for Latno community focused on fair and consistent representaton in media and entertainment — www.nhmc.org 32 Frances McDormand famously called out the Inclusion Rider during her 2018 Oscar’s acceptance speech. Michael B. Jordan announced that his producton company, Outlier Society Productons, would adopt the Inclusion Rider for its projects. 33 www.reframeproject.org/stamp 34 www.variety.com/video/brie-larson-crystal-lucy-awards-critcs 35 www.deadline.com/2018/06/bafa-new-diversity-requirements-2019-flm-awards-1202412383/

A Creatvity Lens: Impact Investng in the Creatve Economy 22 Upstart Co-Lab Deep Dive: Social Impact Media

36 Inclusion has a snowball efect: according to a recent study “Indie Woman” from San Diego State, in flms with at least one female director, women made up 72% of writers and 45% of editors versus flms directed exclusively by men where women made up 11% of writers and 22% of editors. www.nytmes.com/2019/06/18/movies/women-flmmakers.html 37 www.immersedgames.com/the-history-of-educatonal-video-gaming 38 www.re-mission.net 39 www.nytmes.com/2016/03/28/technology/sandra-day-oconnor-supreme-court-video-games. html?_r=0 40 www.gamesforchange.org 41 www.apa.org/news/press/releases/2013/11/video-games 42 Akili Interactve is a project of Neuroscape, a transitonal neuroscience center at the University of California – San Francisco engaged in technology creaton and scientfc research to beter assess and optmize brain functon of both healthy and impaired individuals. 43 www.gameheadsoakland.org 44 www.wearechicagogame.com/press/index.php 45 www.getwigi.com 46 www.theblackgirlgamers.com 47 www.airplayalliance.org 48 www.theconversaton.com/overlooked-creatve-industries-are-recession-proof-22205 49 Zacks Investment Research – www.zacks.com 50 www.investorplace.com/2018/04/5-tv-stocks-that-netlix-cant-beat/ 51 www.newzoo.com/insights/trend-reports/newzoo-global-games-market-report-2019-light- version/ 52 www.fnance.yahoo.com/news/zynga-two-top-picks-goldman-201504493.html 53 ETFs to watch include the industry’s frst ETF dedicated to gaming, GAMR, which tracks the EEFund Video Game Tech Index holding 78 stocks from global frms that support, use, or create video games, as well as ESPO following the MVIS Global Video Gaming and eSports Index. 54 www.fool.com/investng/top-video-game-stocks-to-buy-2019.aspx 55 Binge watching, a modern habit facilitated by streaming and DVDs, refers to viewing multple episodes of a partcular program in rapid succession. According to a 2019 Deloite study, 77 percent of Americans who watched streaming TV consumed an average of four hours per sitng (Digital Trends Survey, 13th Editon, March 2019). 56 Nielsen Total Audience Report 2018 57 www.nytmes.com/2019/07/10/magazine/streaming-race-netlix-hbo-hulu-amazon.html

A Creatvity Lens: Impact Investng in the Creatve Economy 23 Upstart Co-Lab Deep Dive: Social Impact Media

58 www.qz.com/1433085/the-era-of-white-male-games-for-white-male-gamers-is-ending/ 59 From 2017-2018, per capita cinema atendance increased for all ethnicity categories tracked, with highest growth in African American/Black, Asian, and Hispanic/Latno categories; Caucasian/ White atendance represented the lowest growth. (Moton Picture Associaton of America, 2018 Theme Report, www.mpaa.org/wp-content/uploads/2019/03/MPAA-THEME-Report-2018.pdf) 60 www.variety.com/2018/tv/news/shonda-rhimes-netlix-development-slate-eight- series-1202880065/ 61 www.hollywoodreporter.com/lists/50-agents-change-empowering-diverse-voices- hollywood-1202935/item/empowerment-list-stephanie-allain-1202861 62 www.theverge.com/2019/3/1/18246622/riot-games-chief-diversity-ofcer-hire-sexism- allegatons-toxic-culture 63 www.thegamer.com/10-tmes-games-got-diversity-right-and-10-they-really-didnt/ 64 As Alan Gershenfeld of E-Line Media explains of social impact video game developers, what you do not want is “chocolate and broccoli,” i.e. inorganic alignment of gameplay, entertainment and social impact. 65 It is worth notng that Sesame Workshop as a nonproft generates sustainable revenue streams and employs high-end distributon. 66 Impact Partners uses an equity investng model to fund independent documentary storytelling – impactpartnersflm.com 67 Chicken & Egg Pictures provides grants and resources to women nonfcton flmmakers catalyzing social change – www.chickeneggpics.org 68 www.macfound.org/programs/learning 69 UCLA’s new Skoll Center for Social Impact Entertainment in 2019 released a landmark report, The State of SIE, to document the current state of the feld — www.thestateofsie.com 70 www.staymacro.com 71 www.upstartco-lab.org/wp-content/uploads/2018/10/Hiding-in-Plain-Sight-Imp-Inv-in-the- Creatve-Economy-.pdf 72 VC fund that invests in media and tech startups disruptng politcs and catalyzing social change – www.newmediaventures.org 73 VC fund that invests in early stage companies led by underrepresented founders – www.backstagecapital.com 74 www.newinc.org 75 www.creatvestartups.org 76 B Lab industry categories counted include: Film & Music Producton (9); Books & Media (6); Electronic Distributon (3); Marketng & Communicatons Services (101); Print Publicatons (3).

A Creatvity Lens: Impact Investng in the Creatve Economy 24 Upstart Co-Lab Deep Dive: Social Impact Media

77 www.polygon.com/2018/1/8/16855940/videogame-diversity-report-igda 78 www.greenproductonguide.com 79 www.green4ema.org/ema-green-seal-producton 80 Earth Angel integrates a standardized method of environmental accountability throughout the entertainment industry – www.earthangel.nyc 81 There are more than 80 flm &TV tax incentve programs in place natonwide according to Upriver Studios. See an overview of several of the major ones: www.hollywoodreporter.com/news/flm- tv-tax-credit-batle-heats-up-us-1128027 82 Notably, the outsized contributon of the state to the country’s flm/TV industry has also exposed it to social and politcal backlash, as evidenced by the recent calls to boycot productons in the state due to the newly passed highly restrictve aborton legislaton. 83 34% of these productons were flmed on the East Coast 84 California’s renewed producton tax credit program requires flm and TV projects to report diversity statstcs, designate people to handle sexual misconduct claims, and created the Career Pathways Training Program for training Californians in underserved communites for skilled producton careers. See www.hollywoodreporter.com/news/california-extends-flm-tax- credits-2025-1123674 85 www.impactalpha.com/fences-producer-macro-raises-150-million-to-diversify-flm- e55b8141ed45/ 86 www.impactalpha.com/queen-latfah-backs-essence-fund-for-women-of-color-in-the-arts/ 87 www.washingtonpost.com/news/style/wp/2018/06/11/feature/the-quest-of- laurene-powell-jobs/ 88 www.impactalpha.com/how-one-artst-is-changing-indias-male-dominated-culture- one-cartoon-at-a-tme-d36e93ee08ac/ 89 www.impactalpha.com/hiding-in-plain-sight-more-than-100-funds-that-are-investng- in-the-creatve-economy/ 90 www.impactalpha.com/enuma-secures-4-million-to-fll-early-learning-gaps/ 91 www.impactalpha.com/marcopolo-learning-atracts-8-5-million-for-early-educaton-apps- 6fc70c0ffea/ 92 www.thestateofsie.com/siemap/ 93 www.sfo2.digitaloceanspaces.com/skoll-sie-wp/2019/02/convenings-calendar.pdf 94 www.thestateofsie.com/darnell-hunt-ana-christna-ramon-representaton-diversity-progress/ 95 www.thestateofsie.com/michelle-kydd-lee-natalie-tran-caa-social-impact-creatve-change- makers/ 96 www.thewrap.com/social-impact-entertainment-hollywood-peter-bisanz/

A Creatvity Lens: Impact Investng in the Creatve Economy 25 Upstart Co-Lab Deep Dive: Social Impact Media

97 www.thejakartapost.com/life/2018/06/19/bafa-awards-implements-diversity-requirements.html 98 www.impactguide.org/introducton/analysing-the-story-environment/ 99 E-Line Media Impact Game Worksheet — www.drive.google.com/drive/u/0/my-drive 100 www.takepart.com/sites/default/fles/TPI%20Inaugural%20Report-Key%20Findings%20 %28June%202014%29%5B1%5D.pdf 101 www.statc1.squarespace.com/statc/58a204bf3db2b8884d8c01f/t/5c940faa652dea194a18 ac39/1553207211924/ReFrame+Stamp+2019+Submission+Form+-+Narratve+Feature.pdf 102 www.nytmes.com/2019/06/19/movies/inclusion-rider.html 103 www.yahoo.com/entertainment/diversity-hollywood-2019-tme-change-5-possible- solutons-155527855.html

A Creatvity Lens: Impact Investng in the Creatve Economy 26