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Philanthropists gave $810 billion in 2021, but just 2pc went towards reducing emissions

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By Phyllis Muchoki in Davos and Agencies

The global philanthropic financing for climate mitigation has risen in recent years, but still represents less than 2 percent of total philanthropic giving, which stood at $810 billion in 2021.

Environmentalists are now concerned, saying it is not enough.

Those calls emerged during the ongoing World Economic Forum, being supported by more than 45 partners in Switzerland – where some 2,700 leaders from 130 countries, including 52 heads of state and government, are attending the annual meeting in Davos.

Slated to end on January 20, the forum saw the launch of the Giving to Amplify Earth Action (GAEA), on Monday – a global initiative to fund and grow new and existing public, private, and philanthropic partnerships (PPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.

With the energy and cost of living crises, the ambition of steering the planet towards a 1.5-degree Celsius warming pathway hangs in the balance.

Estimates show that current funding is relatively slow and inadequate, and as a result new approach would be crucial to getting capital flowing. Philanthropic giving is seen as a smart move in addressing this shortfall.

“We are at a tipping point in our efforts to put the planet back on track to meet our climate ambitions.  To reach the speed and scale required to heal the Earth’s systems, we need to unlock not only private capital and government funds, but also the philanthropy sector as a truly catalytic force to achieve the necessary acceleration,” said Klaus Schwab, Founder, and Executive Chairman, World Economic Forum.

GAEA’s growing body of philanthropic partners includes Active Philanthropy, the African Climate Foundation, André Hoffmann Family Office, the Arab Foundations Forum, Bezos Earth Fund, BMW Foundation, Children’s Investment Fund Foundation, the Clean Air Fund, Climate Leadership Initiative, ClimateWorks Foundation, Eleven Eleven Foundation, the Gordon and Betty Moore Foundation, Growald Climate Fund, IKEA Foundation, Laudes Foundation, Noa’s Ark Foundation, Open Society Foundations, the Patrick J. McGovern Foundation, Pearl Initiative, Philanthropy Asia Alliance (by Temasek Trust), Philea, The Rockefeller Foundation, Trottier Family Foundation, United Nations Foundation, the Wellcome Trust, WINGS, Workday Foundation.

Individuals, academic institutions, companies, and public sector organizations supporting the initiative include: the Cambridge Institute for Sustainability Leadership, Capital for Climate, Carbon Direct, Center on Global Energy Policy at Columbia University, Centre for Strategic Philanthropy at the University of Cambridge, Climate-KIC, Crescent Enterprises, Government of Egypt, HCLTech through their chairperson Roshni Nadar Malhotra, McKinsey Sustainability, Ocean14, Prince Maximilian von und zu Liechtenstein – Chairman of the Board LGT Group, Salesforce, Singapore University for Social Sciences, Stanford University Center for Ocean Solutions, Strategic Philanthropy Initiative at NYU Abu Dhabi, UN Environment Programme World Conservation Monitoring Centre, We Mean Business Coalition, World Association of PPP Units & PPP Professionals.

Greater philanthropic funding for climate and nature will support, not detract from, existing social priorities. As recently noted by Rajiv Shah, President, of The Rockefeller Foundation: “Climate change poses a singular threat to humanity … we must directly confront climate change, even as we redouble efforts in our traditional program areas: health, power, food, and equity.”

Over the next 12 months, supported by McKinsey Sustainability as a knowledge partner, GAEA will work with founding members to build momentum around three clear objectives:

Convene leaders from the public, private and philanthropic sectors to identify and target climate and nature solutions where they are best positioned to play a catalytic role

Pilot and refine funding models that can support PPPP interventions

Scale up and replicate successful approaches to new sectors, regions, and actors

GAEA will build on existing examples of success. For example, the Clean Cooling Collaborative, founded with the help of an initial $10 million of philanthropic funding in 2016, has mobilized more than $600 million in public and private finance to improve equitable access to low-carbon cooling and support 4.2 gigatons of avoided CO2 emissions by 2050.

Similarly, the Government of Seychelles has leveraged philanthropic funding, public loan guarantees, and private investment to raise $15 million through a blue bond and convert $22 million of government debt into conservation funding to protect 13 marine areas, covering an area larger than Germany.

Wendy Abrams, Chief Executive Officer, of Eleven Eleven Foundation, said: “We need more companies, family offices, individuals, and the new generation of philanthropists to get involved in the climate and natural conversation. If we do not solve this together, there will be nothing to pass on to the next generation. GAEA can be a good platform for getting all the right stakeholders and amplifying action at scale.”

Rania Al-Mashat, Minister for International Cooperation, Government of Egypt, said: “This call to action is extremely timely, as it builds on the directions set during COP 27 in Sharm El-Sheikh, ‘the COP of implementation’ under the Egyptian presidency.

We need more philanthropies to join us at the table and help scale up multilateral development bank finance to unlock private investments to accelerate the green transition. Egypt will work closely with the World Economic Forum to build effective and impactful philanthropic public-private partnerships, and promote the role of the prominent ‘P’ – Philanthropy.”

Per Heggenes, Chief Executive Officer, IKEA Foundation, said: “We are proud to support the launch of the GAEA initiative.

Philanthropies can uniquely encourage urgent, radical, and unprecedented collaboration between the public and private sectors. It’s only by working together at the scale that we can unlock the investment required to achieve our ambitious climate goals and protect the planet.”

Badr Jafar, Chief Executive Officer, Crescent Enterprises, said: “There is a historic opportunity to harness the full potential of philanthropic organizations, family offices and other innovative capital players, in unity with government and business to address our climate and nature goals.

COP28 in the UAE will raise the bar in terms of ambition and the creation of a global architecture for all capital actors to act together at speed and at scale. The World Economic Forum and GAEA is powerful platforms and amplifiers to enhance these efforts.”

Helen Mountford, Chief Executive Officer, ClimateWorks, said: “By unleashing the small but mighty ‘P’ of philanthropy, we can create truly catalytic partnerships that unlock ambitious and collaborative public, private and philanthropic action to improve people’s lives.”

Lim Seok Hui, Chief Executive Officer, of Philanthropy Asia Alliance (by Temasek Trust), said: “Philanthropy Asia Alliance will continue to amplify its impact by supporting initiatives such as GAEA to pool our collective resources and expertise and translate ideas into action.

GAEA’s first Asia-focused key deliverable which will be launched later this year by PAA in partnership with the World Economic Forum is a climate philanthropy report on multi-stakeholder partnerships as a force to combat complex climate challenges.”

Bob Sternfels, Chief Executive Officer, McKinsey & Company, said: “We are very excited to support GAEA’s aim to better connect philanthropic capital with public and private sector efforts to strengthen climate and natural solutions.

Our collective hope is to accelerate thinking and action towards tipping points in these arenas, and to assure economic growth is increasingly sustainable and inclusive.”

The World Economic Forum Annual Meeting 2023 will convene the world’s foremost leaders under the theme of Cooperation in a Fragmented World.

With input from CNBC Africa

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