The climate crisis is a wake-up call for philanthropy

 

Helene Desanlis and Helen Mountford

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You may have heard that 2023 is on track to be the warmest year on record. As the world grapples with the stark reality of a planet that has been overheating about 40 percent faster during the past 15 years than before, philanthropy must recognize that the greatest problems people face around the world aren’t isolated from, but rather deeply intertwined with, climate change. Yet the majority of philanthropic giving still goes toward causes other than ending the climate crisis.

As a sector committed to making the world a better place, philanthropy has a unique opportunity to play a pivotal role in catalyzing intersectional solutions that address the major challenges we face today while paving the way for a sustainable future.

2022 was a disappointing picture

There is no way to sugarcoat the devastating impacts of the climate crisis. According to the World Health Organization, heatwaves, wildfires, floods, tropical storms, and hurricanes are increasing in scale, frequency, and intensity. Research shows that 3.6 billion people already live in areas highly susceptible to climate change. That fact is worth repeating. Our global addiction to fossil fuels has put nearly half the world’s population at risk, today.

Similarly, it’s impossible to downplay that most of philanthropy continues to sit on the sidelines of this defining issue of our time. Total philanthropic giving reached an estimated $811 billion in 2022, of which less than 2 percent, or $7.8 billion to $12.8 billion, was directed to reducing the emissions that cause climate change. Just for perspective, that’s roughly the same amount that Americans spent on Halloween decorations and candy this year.

Since 2015, funding to mitigate climate change from both foundations and individuals has grown steadily. In particular, foundation funding has risen from $900 million in 2015 to $3.7 billion in 2022. But after years of consistent growth, total funding for climate change mitigation plateaued last year, a notable contrast to the 25 percent increase witnessed the previous year.

‘In 2022, foundation funding increased 12 percent year-over-year. While this represented a slowdown from previous years, the increase helped offset decreases in other philanthropic funding to climate action.’

Overall, data from our latest funding trends report paints a disappointing picture of climate philanthropy. In a year marked by a surge in climate-related disasters, philanthropy could have done more to join the climate fight and accelerate transformative action. Put simply, this is not the direction we should be heading in if we are going to give ourselves a fighting chance for a livable future.

Climate philanthropy’s expanding focus

Nonetheless, a few areas stand out for their remarkable growth last year: foundation funding, reducing emissions from super pollutants, securing minerals for the transition, maritime shipping decarbonization, and bolstering climate action in Africa.

In 2022, foundation funding increased 12 percent year-over-year. While this represented a slowdown from previous years, the increase helped offset decreases in other philanthropic funding to climate action.

Efforts to reduce emissions of super pollutants saw remarkable funding growth in 2022, with an increase of 60 percent, driven by collaborative efforts like the Global Methane Hub. This is massive for a sector that accounts for less than 4 percent of total foundation funding for climate change mitigation and has more than 80 times the warming potential of carbon dioxide. As the Global Methane Hub’s CEO Marcelo Mena puts it, ‘Quickly mitigating methane would be like hitting the emergency break on global warming. Methane is the quickest way to decrease the temperature to buy time to address other dangerous pollutants.’

While our findings show that funding allocation remains heavily concentrated in the United States and Canada, and Europe, the data shows the seeds of an important shift. Philanthropic funding is starting to flow increasingly to the Global South. Funding for climate action in Africa has tripled since 2018, with a nearly 40 percent surge between 2021 and 2022. However, this still represented just 6 percent of total foundation support for climate change mitigation in 2022 and is nowhere near the amount needed to fully address the global crisis.

According to Zira Quaghe, Nigeria Focal Person at the African Climate Foundation, ‘The fact that Africa will house a quarter of the world’s population by 2050 underscores the importance of climate action in the continent – it’s not just an African issue, but a global issue. There are opportunities to leverage the continent’s resources for sustainable economic growth, and climate philanthropy can make this development more sustainable in a rapidly growing population. We’re seeing positive trends, like an increase in funding to local grantees, which improves the entire ecosystem with a diverse range of actors to mitigate climate change.’

More inclusive and regionally diverse philanthropic support will be critical as population growth and rapid urbanization across Africa, Asia, and Latin America create demand for housing and green growth strategies.

Other promising trends include philanthropy’s increased focus on facilitating a just transition from a fossil fuel-based economy to one built on renewable energy sources, creating job opportunities and leaving no worker behind. The field is also exploring how to secure a responsible supply chain for clean technologies while preventing negative environmental and social impacts, particularly as demand for minerals is expected to quadruple by 2040. Additionally, efforts to mitigate emissions from industries, like maritime shipping and the buildings and construction sector, have ramped up in recent years.

Our planet needs you

Despite the growing interest in these particular strategies, we need philanthropy to help catalyze momentum across all areas of climate action. Our collective efforts will help set us on a path toward the future envisioned in the Paris Agreement. As temperatures rise, so do our responsibilities to the communities we already fund.

Philanthropy is increasingly recognizing that the climate crisis impacts everything we hold dear — how we provide for and feed our families, where we live, and the air we breathe. Ambitious climate investment leads to cleaner environments, better jobs, new industries and innovations, sustainable development, and a healthier planet. Increasing our collective ambition goes beyond increasing funding amounts. It also means more coordination and engagement — not only from the largest foundations and from long-standing climate funders but from the entire philanthropy community.

The good news is that most of the climate solutions we need exist today, and many are ready to scale. They just need to be funded like we want them to win. We need an influx of funding for these solutions in this decade, in this year, at this moment. Now is the time for everyone to step up and shape a brighter future for all.

Helen Mountford is the president and CEO of ClimateWorks Foundation. She has almost 30 years of global experience at the intersection of environmental action, economic development, and climate policy.

Helene Desanlis is the director of climate philanthropy, Global Intelligence at ClimateWorks Foundation. She is an author of the ClimateWorks Foundation Funding Trends report and leads the development and management of philanthropic datasets in support of climate strategies.

 

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