Giving Compass' Take:
- Investors can support the communities most affected by climate change by helping implement climate resilience strategies while also receiving a financial return.
- What could donor capital do to strengthen climate resiliency and action?
- Read more about climate justice here.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
The fight against climate change is a story half-written, and so far, big, powerful economies have mostly been the ones to tell it. That needs to change.
The shift, or transition, to a low-carbon world is gaining momentum. The number of countries and companies that have made commitments to transition their activities to net-zero emissions has increased dramatically. Indeed, 90 percent of global gross domestic product is now covered by these commitments.
But it isn’t enough. Real-world policies and action are currently projected to result in a 2.7 degrees Celsius global warming level. Yet the goal of the 2015 Paris Agreement is to limit long-term temperature increases to well below 2 degrees—preferably 1.5 degrees—Celsius. Moreover, the people in emerging and frontier economies who are set to feel the most pain are ill-equipped to protect themselves. In many cases, their ability to anticipate, prepare for, and respond to disturbances related to climate change is already at the limit.
The level of climate preparedness within emerging and frontier economies varies widely but overall is very low. Many of these economies are currently more dependent on fossil fuel use than developed ones, which means that in the race to reach net zero emissions, the playing field isn’t level.
If we are to achieve a just transition to a lower-carbon, more resource-efficient, and more socially inclusive economy, governments and businesses need to take more action to realize their commitments, and not only build a green economy, but also put people and human rights at its center. They must help ensure that the people who are most impacted by climate change are equipped to protect themselves.
The same holds true for private investors. Many recognize this and are asking: How can we combine economic initiatives that move away from carbon creation while generating opportunities for employees, workers, and local communities?
The answer is (at least) three-fold. Investors must commit to climate adaptation strategies, or what the Glasgow Climate Pact defines as “helping those already impacted by climate change,” not just reducing emissions. They must also work to improve financial and insurance products designed for people at risk, and measure their impact through community feedback.
Read the full article about climate justice investment by Maria Teresa Zappia at Stanford Social Innovation Review.