Everything that matters is threatened by climate change. How can philanthropists respond?
Rising temperatures and the irreversible loss of critical climate systems are a threat to our existence. In developing countries, people are dying of hunger and thirst and are migrating in their millions. All over the world, rising temperatures are destroying homes and livelihoods and impacting physical and mental health.
Climate change exacerbates so many global challenges – including poverty, poor health and conflict – that it should arguably be one of the largest areas of philanthropic giving in its own right. However, raising money to fight climate change has traditionally been hard. The science behind it is incredibly complex, the scale of the challenge is vast and it can be hard to know where to begin. Many donors have understandably regarded it as an area that is too difficult, despite the urgent need.
Things are now changing. The rising awareness of just how interconnected climate and nature are to the wellbeing of current and future generations has brought new focus to climate related-philanthropy. New research conducted across the European philanthropic sector by the Bertelsmann Foundation showed that an overwhelming majority of European foundations now believe that climate change is a key issue they need to tackle. Philanthropists are increasing their funding of climate issues, adopting sustainable investment approaches, and applying a “climate lens” to their giving. In 2021, climate philanthropy grew by 25%, according to ClimateWorks, a San Francisco-based foundation focused on climate philanthropy.
If you are considering funding in the climate sector how do you start? We set out six practical steps that can help you. We recently discussed these issues in more detail in a Cazenove Capital podcast with Sophie Marple of Gower Street, a climate-focused foundation.
1. First and foremost, fund areas you are interested in
If you are not interested in an area, don’t focus on it! Being interested increases your engagement and will help you remain motivated when things get difficult. However, if it's an area of strategic importance, such as policy change, then consider funding some of the brilliant organisations and funders in that area. If you want to fund nature or a certain species because it gives you joy, then do it. The reality is that we need funding for both natural climate solutions and systems change – and there will be other people interested in the areas that are not for you. So our first piece of advice is to think foremost about what you love and are interested in and fund around that.
2. Align with your existing grantmaking
If you aren’t ready to switch your focus to climate philanthropy, then think about what you are already funding and how it interacts with climate issues. This is called a “climate lens.” For example, if you are currently providing funding for health issues, you may want to look at air pollution as a “lens” through which to consider the climate. Pollution caused by greenhouse gas emissions can damage the lungs, heart and other organs leading to cardiovascular and respiratory disease, causing millions of premature deaths each year. To turn this into a practical application, funders can think about how they might improve air quality. This could involve supporting campaigns for clean air here in the UK or more globally through an organisation such as The Clean Air Fund.
An organisation called Active Philanthropy provides useful information and advice on applying a climate lens to existing funding in an excellent guide called Funding the Future – How the climate crises intersects with your philanthropy. There is also a course for those who want to go further.
3. Get help
Understanding climate change is complex and it can be hard to know where you want to direct your giving. It is worthwhile investing time and money in getting some advice to catalyse your giving. If giving levels are sufficiently large, you may want to explore taking on specialist staff to help. There are some inspiring people and organisations who have worked with a wide range of philanthropists, helping them understand climate issues and define a strategy around their climate philanthropy.
Funded by the Quadrature Climate Foundation, Impatience Earth provides pro bono advice to philanthropists who are committing £100,000 or more to climate-related philanthropy.
4. Think about broader family assets
Many families own land, operating businesses and even social housing. Thinking about how climate intersects with these assets can be an important part of your contribution to tackling climate change. This is something that many of the families we work with are now doing.
Practical first steps can include hiring a consultant to help you understand your baseline carbon emissions and providing a pathway for reduction.
Families with land can consider looking at opportunities for rewilding or the creation of biodiversity credits. Those with operational businesses can explore emissions reduction within their own business and throughout their supply chains. Property owners, especially those in the social housing sector, can think about retrofitting and the environmental footprint of buildings. Insulation, for instance, reduces emissions while also helping those grappling with fuel poverty.
5. Don’t go it alone
To solve a big global challenge like eradicating malaria, Bill Gates needed to collaborate with other philanthropists. Climate change will be no different. The benefits of collaborating with others are clear in terms of pooling resources and knowledge sharing. However, there are also less tangible advantages. Funding in this sector is hard and the outlook can sometimes be bleak. This can be harder on you if you are working in isolation. Funding alongside others can help build your own resilience and increase the impact of your money.
Joining the Environmental Funders Network is highly recommended. It will give you a good overview of the sector and enable you to network and collaborate with other funders.
6. Use your investments
Irrespective of whether you want to apply a climate lens to your grantmaking or broader assets, you should think about the climate in the context of your investment assets. Most philanthropists give away around 5% of their charitable assets each year, leaving 95% invested. These assets can be aligned with climate by ensuring they are not financing fossil fuel expansion. It is also possible to allocate capital to investments across climate mitigation and adaptation, which actively help reduce emissions and limit long-term temperature rises. They can also help those already affected by climate change.
Climate change is a daunting issue for many of us. However, there are now clear, practical steps that wealthy individuals and families can take to reduce their environmental impact and make progress toward a better future. Whether you pursue all of these steps or just one or two, it is a step in the right direction. We have been at the forefront of advising families on climate philanthropy for many years now and are happy to make introductions to specialist advisers and like-minded individuals.
For further information or to discuss these issues further please get in touch via your usual Cazenove Capital contact.
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