Rousing the sleeping giant of climate philanthropy

There’s a lot that will be different about COP28 in the UAE, and one of the most prominent innovations will be the inaugural Business & Philanthropy Climate Forum, being held from Dec. 1-2, as part of the World Climate Action Summit. Designed to engage the private sector more effectively in the COP process, the forum will bring 1,000 CEOs and leading philanthropists from all regions of the world together, along with policy heads, to share knowledge, exchange ideas, and agree on better ways of collaborating to address climate change.  

The presence of global philanthropists at the forum is not an afterthought. Although a lot has been said in recent decades about the crucial role that government and business must play in the fight against climate change and nature degradation, much less attention has been paid to the increasingly important role that philanthropy plays in this effort. This is despite the fact that well over $1 trillion in philanthropic capital is deployed around the world every single year. To put this in perspective, this equates to 10 times the value of all the climate finance provided last year by richer nations to developing nations, and about the same as total global climate finance flows in 2021/22.

Right now, though, only a fraction of this philanthropic capital is allocated to climate-related causes. In fact, according to a recent analysis by ClimateWorks Foundation, philanthropic giving by individuals and foundations focused on climate change mitigation made up less than 2 percent of global giving in 2022. Encouragingly, the same study showed a broadening appetite among strategic philanthropists for funding more diverse approaches to climate change mitigation, even if the total amount of climate-focused philanthropy remains relatively low.

This is an important trend, because it is not just the quantity of philanthropic capital that makes it a transformative resource in the global response to climate change. Philanthropic capital also has several distinctive characteristics that make it a qualitatively uniquely powerful tool for pushing the boundaries of what is possible and achieving urgently required scale. Among other things, philanthropic funding is often more flexible, risk tolerant and patient than other forms of capital. When strategically deployed at an early stage, de-risking follow-on investments, it can generate a multiplier effect by unlocking even larger pools of government and business capital.

Achieving an equitable climate and nature transition by 2050 is going to require an “all hands on deck” response from every part of the global community

Badr Jafar

Philanthropy can be a particularly powerful tool in the deployment of nature-based climate interventions — including with reforestation, restoring mangroves, and protecting biodiversity — that may not offer an immediate financial return and have historically struggled to compete for business and government funding. The increasingly recognized reality is that our nature and climate goals are inseparable, with research finding that natural climate solutions could yield one-third of the emissions reductions required to achieve a 1.5 C limit pathway. These reductions will not come cheaply, however. To address biodiversity loss and land degradation alone, it is estimated that nature-positive investments of $8 trillion is needed between now and 2050. Philanthropists could play a pivotal role in filling that gap. Which is why a number of sessions at the COP28 Business & Philanthropy Climate Forum will focus specifically on unleashing the catalytic effect of climate and nature philanthropy.

Of course, there are many things that we should already be doing to ensure more philanthropic capital is channeled towards climate and nature-based outcomes. First and foremost, we need to treat philanthropy with the respect that it deserves, and seek to harness it in ways that takes advantage of its unique strengths. Second, we need to listen to and engage with the growing cadre of strategic philanthropists across the Global South, home to three-quarters of the global population, many of whom are already dealing with the all-too-real effects of climate change. Third, we must not overlook the scale and consistency of faith-based giving, and the significant potential that exists for interfaith collaboration to address the universal threat that climate change poses to humanity. Finally, we need to make a sustained effort to facilitate greater coordination between the sectors of philanthropy, government and business — not just during high-profile moments such as COP28, but also in the precious months and years in between.

Achieving an equitable climate and nature transition by 2050 is going to require an “all hands on deck” response from every part of the global community. For many government stakeholders, that will mean properly raising ambitions and making good on commitments that they and their predecessors have already made. For many business leaders, that will mean making the essential leap from simple pledges and declarations to tangible action and implementation. For many of the world’s philanthropists, that will mean coming off the sidelines and throwing more of their considerable weight and unique attributes behind global efforts to address climate change. More than mere financial donors, I am optimistic that philanthropy can be the glue that binds business, government and civil society together in concerted action to achieve our net zero and nature positive goals.

• Badr Jafar is the COP28 Special Representative for Business & Philanthropy, and CEO of UAE-based Crescent Enterprises