Ethex is a crowdfunding platform that helps people invest directly in extraordinary organisations across the UK. Its sister platform Energise Africa enables anyone to invest from £50 in businesses that install life-changing solar energy systems in homes across Africa.
Together, they have raised more than £100 million from everyday investors to support projects that are making a positive difference to the planet and people while targeting a fair financial return.
We spoke to Lisa Ashford, CEO of Ethex and Energise Africa, about the successes of the platforms so far, her goals for the future, and what she wants to see achieved at the COP26 climate talks.
Why was Ethex set up and how has it evolved since then?
“Ethex was launched in 2013 to provide pioneering businesses with the essential finance they need to grow. Back then, community energy was just starting to take off. To scale up, organisations needed the flexible finance that a crowd can deliver. At the same time, there was an increasing desire from people to put their money into direct investments that make a positive difference.
“It was a kickback from the financial crisis, when there were lots of opaque financial products that didn’t speak to people’s values. This demand has grown fast over the last five years, with sustainable investing now much more mainstream. We quickly built a reputation for being able to raise this type of finance and started to diversify into other sectors. So on top of community energy came affordable housing, food and farming, sustainable transport and tech for good.”
How did Energise Africa come about?
“In 2016, the Department for International Development (DFID) was looking to back organisations that could use innovative forms of finance to help speed up clean energy access in sub-saharan Africa. Alongside Virgin Unite, they wanted to launch a new investment crowdfunding platform specifically for that purpose.
“We combined our skill set with Lendahand, which has valuable experience in emerging economies, and formed a joint venture – Energise Africa. The backing we had allowed us to quickly gain credibility with both the crowd and solar businesses, which were in desperate need of affordable, flexible finance that they couldn’t find elsewhere.”
Has the Innovative Finance ISA encouraged more people to invest on your platforms?
“More than 50 per cent of our investments in Energise Africa are through the IFISA. Minimum investment is just £50 so it’s a very accessible product. It allows people to build up a diverse portfolio in a tax-efficient way. Investors can easily reinvest their money because the interest and capital comes back on a six monthly basis.” Capital is at risk and returns are not guaranteed.
What have Ethex and Energise Africa achieved so far?
“More than £100 million has now been invested through Ethex and Energise Africa combined, from around 25,000 investors. The impact of this is huge. On Energise Africa it’s allowed more than 500,000 people to access clean, affordable energy.
“In terms of reducing Co2 emissions, Ethex has avoided more than 300,000 tonnes just through its community energy organisations. Energise Africa has reduced 130,000 tonnes.”
What is your next big goal?
“We want to raise £100 million on Energise Africa by 2023, and another £100 million through Ethex over the next few years. To build up the platform we need to build awareness. People will often say “That’s such a great idea, I can’t believe I’d never heard of it!”
How has the outlook for sustainable investing changed from the Paris Agreement in 2015 to the upcoming COP26?
“We have more high profile environmental champions, which has made climate change feel closer to home and more pressing. People are beginning to understand the link between their finances and the wider world. But in general, it’s still difficult for individuals to find the types of products that reflect their moral compass. There is still a lot of financial jargon. Also, with the popularity of sustainable investing comes the risk of greenwashing.
“Politically, there is a willingness to do more and to speak of green policies. But in terms of taking action and delivering on promises, there’s still a long way to go. I hope that we can come out of COP26 with a real commitment for action.”
What policy commitments would you like to see from COP26?
Solutions don’t have to be all top down. Yes, you have to have the right policy framework, but we need everyone to be brought along on this journey. Grassroots action, social enterprises and community organisations – which are people-powered – are all key to making that happen, and they can often be overlooked. COP26 is a real opportunity to get governments, organisations and people all working together to make change happen.
This article is in partnership with Ethex and Energise Africa