Laudes Foundation on interlinking climate change and the inequality gap

 

Laudes Foundation launched in 2020 with the aim to address the dual crises of climate breakdown and challenge industries to implement business practices that ‘regenerate and restore nature.’ The new foundation is a part of the Brenninkmeijer family enterprise which founded fashion retailer C&A, next to the COFRA businesses and the family’s other private philanthropic activities, including PorticusGood Energies Foundation and Argidius Foundation.

As Alliance magazine’s June 2021 issue looks at climate philanthropy ahead of COP26 in Glasgow, we partnered with the International Philanthropy Commitment on Climate Change to ask a number of organisations around the world: what is philanthropy’s role in addressing climate change at this critical moment?

CEO, Leslie Johnston, joined Alliance to talk about the work of Laudes Foundation.

“To be frank, for many years, we were practically climate blind.”

Alliance and IPCCC: Has your organisation made any commitment to climate action or joined a climate pledge? If so, what?

We purposefully designed Laudes Foundation to tackle what we see as the interlinked crises of climate breakdown and inequality. It is therefore critically important to us that we align our (internal) operations with our ambitious (external) commitment to using philanthropy to spur climate action by business, industry, and financial institutions. While we are still at the beginning of our journey, we have taken the following steps:

First, we collected the data needed to understand our starting point. Specifically, we commissioned our first carbon footprint assessment in 2020, using Greenhouse Gas (GHG) Protocol and new methodologies to assess our carbon impact. We realise that our results were not typical (as travel drives the bulk of our emissions, and in a pandemic year, this was largely curtailed), and going forward, we will work to continuously reduce our travel activity from its pre-pandemic levels.

At the same time, several of our colleagues formed an employee-driven working group to investigate, together, practicable ways we can reduce our carbon footprint, which has led to new policies as well as working practices.

Specifically, we committed internally to four ways to mitigate our own emissions:

  • Most importantly, we commit to reducing our emissions consistent with SBTI guidelines;
  • In addition, we commit to offsetting 100 per cent of those emissions we cannot eliminate by investing in projects that prevent carbon from being released, focusing on initiatives in those Asian and Latin American countries in which the foundation operates. For 2020, we offset 222 Verified Carbon Units (VCUs), through Carbonext SA, a reforestation project in the Amazon;
  • Inspired by the ambition of others, we also commit to removing the equivalent carbon from the atmosphere, investing in restoration projects with a particular focus on biodiversity hotspots;
  • And finally (and most challengingly), we commit to supporting our partners with their own climate action. To enable this, we are also exploring how the science-based targets methodology can be applied to the non-profit and philanthropy sectors.

Secondly, we joined the movement to encourage other funders to accelerate their own climate action. As one of the first funders of the European Philanthropy Coalition for Climate (led and hosted by Dafne) and member of its steering committee, we are helping funders across Europe – particularly those without a climate focus – to start to incorporate climate considerations in their funding as well as own operating models. This work is activating the more than 220 signatories of national philanthropy commitments on climate change in France, Spain and the UK and supports the newly launched International Philanthropy Commitment on Climate Change, led by WINGS. 

What encouraged your organisation to start its climate journey?

To be frank, for many years, we were practically climate blind. While Laudes Foundation’s predecessor, C&A Foundation, had funded many initiatives that mitigated climate change (for example, by transitioning farmers to organic and regenerative practices), we did not necessarily call out ‘climate breakdown’ as the systemic challenge we were trying to address. But others did. And when I read, in January 2019, the compelling manifesto by the Union of Concerned Researchers in Fashion which called out the ecological crisis and the need for a better economic system, I knew we had to act.

In January 2020, we did so by launching a new foundation with a razor-sharp focus on not only climate mitigation, but also reducing social inequality, as the two are deeply interlinked and can amplify, if not exacerbate, each other. From the start, we felt that philanthropy – through its power to take risks, be disruptive and develop, test and scale ideas – has an important role to play in addressing these deep and systemic challenges.

And our journey started by talking to more than 300 people including business leaders, grassroots activists, investors, policymakers and labour rights leaders. These dialogues helped us to understand the root causes in our global economic system which perpetuate the climate crisis and deepening injustice. We also visualised this system in a dynamic economic system map to help us understand how our strategic choices can accelerate the change we want to see.

We are still at the beginning of our journey and have a long way to go to meet our 2030 ambition of a climate-positive and inclusive economy. And we hope to join with others to use philanthropy – smartly and strategically – to both inspire and challenge business and industry to step up its efforts around climate and inequality.

Can you share an example of the changes that your organisation has made in its embrace of climate work?

When we made the decision to tackle what we see are the two biggest challenges of our lifetimes – climate breakdown and deepening inequality – we made significant changes to how we operate and organise ourselves. We retired our previous branded foundation (C&A Foundation) and launched a new one, Laudes Foundation, that puts climate and inequality at the centre of everything we do. This has also changed the ‘lens’ through which we frame our work across multiple industries. Rather than focus on making industry X a ‘force for good’, we have asked ourselves how industry X can be nudged and prodded to do more to mitigate climate as well as reduce inequality. In other words, industry and finance become important levers in the fight against climate change, and we are using philanthropy to de-risk and inspire business to step up, as business as usual will not get us to where we need to be.

Internally, we continue to walk the talk, designing new policies to keep our carbon footprint low. These include a travel policy proposing using only low-carbon transport modes and providers; a flexible working policy which will reduce staff commuting once the pandemic has ended; and a procurement policy requiring more robust sustainability credentials from future suppliers.

While we work towards carbon neutrality, we’ll continue to offset our emissions. In 2020, we offset 222 Verified Carbon Units (VCUs) through Carbonext SA, a carbon-offsetting reforestation project in the Amazon. And we are allocating funds and resources to support partners to assess their own carbon footprint and co-create climate mitigation strategies to reduce their emissions.

In this key decade for climate action, many are recognising the intersection of climate with other areas of work. How are you integrating a climate lens into your other focus areas?

Climate change exacerbates the inequality gap and is inextricably linked to social and environmental progress globally.

We have a distinct positioning at Laudes Foundation where we don’t focus on climate breakdown or inequality, rather, we work at the intersection of both of these systemic challenges and focus on how they impact, accelerate, complement, and exacerbate each other. This is white space for philanthropy, and the one that we’re most eager to explore.

And we are seeing this interdependence across all of our work, whether it’s the human rights considerations of ‘going green’ with renewable energy and its unintended impact on human rights via the sourcing of various components, or the deep vulnerability experienced by migrant farmers and garment workers in those countries hit hardest by climate change (e.g. Bangladesh).

What kind of impact have you seen your climate focus having already? If you have a story, please share it.

2021 has been a milestone year for climate resolutions and investors have become

increasingly intolerant of greenwashing by fossil fuel companies. Laudes Foundation has embraced an approach that both engages and activates investors to use their considerable influence to accelerate change. Follow This, one of Laudes Foundation’s partners has had significant success in this area. Shareholder support for its resolution at Shell more than doubled from 14 percent in 2020 to 30 percent in 2021, despite the company rejecting the resolution and filing its own weaker version. Support for the same Follow This resolution at BP also increased despite the company convincing many investors it was already on track for Paris-alignment.

Follow This also won a milestone ruling in the US when the Securities and Exchange Commission (SEC) overruled pushback from three US oil companies that sought to avoid votes on their accountability for Scope 3 emissions. All three resolutions subsequently won majorities with the resolution at Phillips66 securing 80 per cent of the vote.

What are some of the challenges you have encountered so far in your climate work? 

Greenwashing may reduce the urgency to act. With the growth of sustainable investing, a vast range of new products and ideas have come to market and companies are increasingly keen to showcase their green credentials (but often embracing options full of jargon with questionable credentials).

Data availability is not yet sufficient to spur action. This year, CA100+, one of the largest investor engagement initiatives on climate change, has launched the Net-Zero Company Benchmark to assess the performance and ambition of some of the world’s largest greenhouse gas emitters and other companies with significant opportunity to drive the net-zero transition. The benchmark offers the first detailed, comparative assessment of individual focus company performance against the initiative’s three high-level goals: emissions reduction, governance and strengthening climate-related financial disclosures. While having a benchmark allowing a comparative assessment sets clear engagement priorities for investors and others, few companies score well across all indicators. The lack of detailed data, pathways, measurement structures and commitment to, for example, the alignment of value chain GHG (Scope 3) emissions, often remain a blind spot, thwarting any ability to establish whether an organisation is really Paris aligned or just setting empty net-zero targets.

Technology is not yet at scale. Many believe we can keep emitting CO2 as long as we develop carbon capture technologies. However, many of the technologies we are relying on to solve our problems are not yet economically viable, or even viable. In the IEA’s new 1.5-degree Celsius Net Zero Roadmap, it acknowledges that while clean energy technology is well-established in the electricity sector, there is a pronounced need for innovation for carbon capture storage and hydrogen and around 55 per cent and 75 per cent, respectively, of the cumulative emissions cuts attributed to these technologies in the net-zero emissions are still at the demonstration or prototype stage.

Policy and legislation may lag behind ambition. We know that the European Green Deal (which has set an ambitious target of reducing emissions by 55 per cent of 1990 levels by 2030) is an extraordinary opportunity to transform the European economy. But as the Economist said when it was announced, the EGD ‘is a slim, 24-page document with an enormous scope and a dearth of detail‘. The extent to which national legislators will adopt it isn’t clear. This is a critical time, in particular with French and German elections approaching and the mounting pressure of COP26. Will policymakers rise to the challenge?

How did your organisation convince its board to take on climate work or applying a climate lens framing to work in other areas?

Years of working to make fashion a force for good, through our work at the now retired C&A Foundation, gave us some important lessons. Notably, you cannot impact an industry or sector and its supply chain without looking at the broader economic system driving the problems we are trying to tackle (particularly the broken incentives and information flows at the heart of each industry, and the role of policymakers and civil society in rebalancing power). This systemic lens is what has helped us understand the need to focus on what we see as the two greatest challenges of our lifetime: climate breakdown and inequality.

Do you think philanthropic foundations should be held to account for their climate commitments, such as with an independent climate action tracker? Why or why not?

The role of every organisation in addressing sustainability challenges has never been more important.

When foundations integrate climate considerations not only into their own operations and to their programmes, we have immense potential for positive climate impact.

However let’s not forget the bulk of emissions comes not from foundations but from industries reliant on burning fossil fuels. Let’s focus instead on how philanthropy can be activated in the right way – as a catalyst to nudge innovation, address market failure and derisk new models.

Do you have any advice to share with other foundations embarking on their own climate journey? 

When it comes to philanthropy’s role in tackling climate breakdown, we need to go where others will not or cannot go. We need to help show what’s possible, in order to inspire others to step in. And we need to help create the parameters, rules, policies and norms to create a level playing field that celebrates the leaders and pushes up the laggards.

And while philanthropic capital will never be enough to tackle the climate crisis alone (in 2019 the level of climate funding from foundations was approximately EUR 1.6 billion, which is dwarfed by the current investment from business and government), we can do what philanthropy does well, namely:

  1. Getting out of our siloes and working with others. Through our convening power, ability to take risks and develop, test and scale ideas and approaches, philanthropy can play an important and catalytic role in climate action. By mobilising networks of funders to collaborate and coordinate activities through existing donor collaboratives, or exploring others that need to be established, we can design the most effective and efficient responses to climate breakdown and look beyond the short-termism that afflicts public sector decision-making.
  2. Staying laser-focused on the problem to be solved. The fight against climate breakdown requires the rapid development of responsible business models, new legislation and / or regulation, and the adoption of new technologies, products and mechanisms; some of which are being developed and adopted at pace. It’s critical to stay current and outcome focused and ask ourselves: how will doing X maximise the impact of mitigating climate breakdown?
  3. Building agile and resilient cultures and embedding an environment of learning enables us to pivot our strategies quickly to adapt to shifting contexts. The world is changing rapidly, with big implications for business, policy and civil society, and foundations need to be nimble in our strategic responses.

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