Giving Compass' Take:
- Global philanthropy can put more effort toward climate and nature action-based solutions to address the looming threat of climate change.
- How can tapping global actors such as corporate offices, family philanthropists, and CSR leaders help build capital to navigate climate change?
- Read about climate philanthropy with an equity-centered approach.
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However, a recent report by ClimateWorks Foundation reveals that, despite the pioneering efforts of philanthropic leaders in the climate and nature space, global philanthropy at large is not putting its muscle behind addressing the dual climate and nature crises. While overall giving in the sector has grown significantly and an increasing number of philanthropic institutions are making climate commitments, especially in the past few years, the share of total global philanthropy dedicated to climate mitigation remains under 2 percent annually. Of the approximately US$810 billion of total philanthropic giving in 2021, only about US$7.5-12.5 billion was earmarked for climate mitigation. Giving for climate adaptation, just and equitable transitions, or for nature protection or restoration, is even less.
These figures are striking, and the inevitable conclusion is stark: The state of giving to climate and nature is nowhere near commensurate to the seriousness of the crises faced by our Earth systems, and the many species relying on them.
Six unique characteristics of philanthropic capital can change our course
However, philanthropy might be the unsuspecting actor who can play a transformational role in catalysing action and accelerating impact to reduce human emissions and reverse nature loss. The capital philanthropy can deploy can be truly catalytic thanks to six unique characteristics:
- Nimble: moves capital quickly to where it is most needed
- Risk-tolerant: de-risks and leverages new, additional capital
- Flexible: adapts to different types of funding needs
- Patient: waits for better, more impactful outcomes
- Equitable: focuses on the marginalised and vulnerable
- Systemic: takes systems-level approaches to solutions
There is a significant gap between stated climate and nature ambitions and pledges, and the capital made available to reach those objectives. Transitioning the planet to an equitable climate- and nature-positive future by 2050 will require total funding of $100+ trillion over the next three decades to engender systemic shifts, from how we grow our food to how we power our lives and transport goods to how we build our cities and communities. Most of this financing will need to come from businesses and governments.
However, if philanthropy and a broader spectrum of global giving actors, including family offices, corporate philanthropies and ultra-high net worth individuals (UHNWIs), were to raise their giving, and deploy these resources in a manner that, for example, de-risks investments or helps to develop the policy frameworks that factor in the risks of not doing so, then we could begin to mobilise the trillions of public and private investment needed, giving us a decisive edge in turning the tide in preventing the looming climate and nature breakdowns.
Read the full article about climate philanthropy by Neo Gim Huay at Eco-Business.