Climate philanthropy report shows 'disappointing' lack of funding

Philanthropic funding for efforts to reduce or avoid the worst impacts of climate change have increased for some sectors and in some key parts of the world, such as Africa. However, it needs to ramp up much faster if funders want to meet the growing needs of a warming planet and an escalating number of climate disasters affecting low- and middle-income communities, climate philanthropy experts said. ClimateWorks Foundation published its latest annual funding trends report on Wednesday. The United States-based nonprofit tracks climate mitigation spending worldwide and is funded by foundations such as Bezos Earth Fund, Children’s Investment Fund Foundation, and Open Philanthropy. Its latest data shows climate mitigation received an estimated $7.8 billion to $12.8 billion of the total $811 billion in global giving last year. Key targets for climate mitigation spending include work to reduce emissions in the shipping industry. Foundation giving to the sector has more than tripled since 2018, reaching $16 million last year, the report said. Funding to reduce emissions in the building and construction sector also grew from $65 million in 2018 to $155 million in 2022. Funding for corporate accountability efforts also has steadily increased in recent years and represented 4% of foundation giving in 2022. And foundations spent about $35 million on efforts to obtain minerals needed to produce renewable energy. Additionally, ClimateWorks found that foundation funding to mitigate climate change in Africa more than tripled over the last five years, faster than giving to any other region. Food and agriculture, clean electricity, and forests were the top three sectors or strategies for foundation funding in Africa and collectively received $390 million in 2022, the report found. However, funding to Africa still represented only 6% of foundation funding for climate last year. More than two-thirds were directed to Europe, the United States, and Canada, which ClimateWorks called “concerning” given the disproportionate impact of climate change on countries in the global south. “There is a persistent disconnect between the disproportionate impacts of climate change in Africa and the lack of sufficient philanthropic investments to advance climate-positive development on the continent,” said Saliem Fakir, executive director of the South Africa-based African Climate Foundation, in a press release about the report. Too little, too slow Overall, funding for climate mitigation is lagging far behind the need for investments in efforts to reduce global warming, ClimateWorks said. The overall amounts given in 2022 were essentially unchanged from the previous year and still show that, as in 2021, funding to lessen the impacts of climate change lingers below 2% of all annual giving, ClimateWorks said. Slow economic growth, high inflation, and the poor performance of the stock markets may have contributed to that but it is not entirely clear why some foundations are giving less, the group said. Philanthropic funding is stagnating as the impacts of climate change intensify. The Northern Hemisphere just experienced the hottest summer on record and incidents of droughts, heatwaves, floods, and other climate disasters have increased throughout the global south. “This report should be a wake-up call for philanthropy. The intensifying climate crisis demands greater ambition, scale, and urgency to safeguard lives.” --— Helen Mountford, president and CEO, ClimateWorks Foundation Financing to help low- and middle-income countries mitigate and adapt to climate change is expected to be a focal point of discussions at the United Nations Climate Change Conference in Dubai that kicks off on Nov. 30. Major philanthropists such as Bill Gates are expected to attend. The findings paint a “fairly disappointing picture of climate philanthropy,” said Helen Mountford, CEO of ClimateWorks. “This report should be a wake-up call for philanthropy,” Mountford said in a press release. “The intensifying climate crisis demands greater ambition, scale, and urgency to safeguard lives.” “Now is the moment for philanthropy to move more funds, faster, to the places that need them, and work with a wider range of partners from government, to business, to civil society and communities to advance transformative and equitable solutions,” she said. There has been meaningful climate progress but current philanthropic funding is not commensurate with the urgency of the climate crisis, Mountford told reporters during a briefing on Tuesday. Philanthropy can play an essential role in driving public and private investments to sustainable economic development, Mountford said at the briefing. And multiyear grants are especially essential to stabilizing the funding to the field and allowing grantees to implement long-term strategies, she added. ClimateWorks' call for increased climate funding is being echoed by others in the sector. If more funding went to preparedness, mitigation, and anticipatory actions, then people wouldn’t have to go through some of these disaster events that we’re seeing, said Patricia McIlreavy, president and CEO of the Center for Disaster Philanthropy, which is based in the U.S. CDP operates multiple funds for domestic and international relief efforts and recognizes that climate change is a major driver of many of the natural disasters and conflicts to which it responds, she told Devex. “In general, globally, my concern is we’ve been too focused at times on the reactive and we need to be much more attentive to being proactive,” McIlreavy said. “How do we move into more preparedness and mitigation and thus, possibly, have less needs globally because we help people before they need help,” she asked. A few bright spots ClimateWorks’ annual findings are often cited in discussions about climate philanthropy and the organization is one of the key data trackers for the giving sector. As in 2021, the three sectors that received the most funding last year were clean electricity — 11%, forests — 9%, and food and agriculture — 8%, according to the report. It also highlighted growth in some other areas. The sectors that saw the most funding growth were super pollutants, transportation, and industry, according to the report. Funding collaboratives such as the Global Methane Hub — a Chilean-based initiative backed by Bloomberg Philanthropies, the Hewlett Foundation, IKEA Foundation, and other donors — were critical to increasing funding for the reduction of super-pollutant emissions, the report said. Methane is believed to have more than 80 times the warming power as carbon dioxide. “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,” Marcelo Mena, CEO of Global Methane Hub, said in a statement. Members of the Global Methane Hub contributed about $70 million of the $150 million spent on methane emissions reduction efforts last year, such as reducing or preventing emissions from the landfills, farming, and the energy sector, Mena said during the briefing on Tuesday. However, super pollutants and other fast-growth sectors highlighted in the report still received less than 4% of total foundation funding for climate change mitigation, ClimateWorks said.