Q&A: Per Heggenes on how philanthropy can help mitigate climate change

The IKEA Foundation has been part of some of the largest, recent philanthropic initiatives to combat climate change, including a coalition of 20 philanthropies that have committed to reducing global methane emissions and a $1 billion initiative with The Rockefeller Foundation to boost investments in renewable energy.

The IKEA Foundation also is part of the newly announced Global Energy Alliance for People and Planet, which builds on its partnership with The Rockefeller Foundation. The alliance includes development banks and financial institutions, and aims to raise $100 billion in public and private investments to support the development of renewable energy in the global south.

The Netherlands-based IKEA Foundation has said that it wants its philanthropic environmental work to align with the Paris Agreement and to support the transition away from fossil fuels. CEO Per Heggenes told Devex that the foundation has been spending about €200 million ($230 million) annually for its climate work. Grantees have included the European Climate Foundation, Climate Action Network, Shakti Sustainable Energy Foundation, and SELCO Foundation.

The IKEA Foundation board also recently voted to spend another €200 million per year on reducing greenhouse emissions for the next five years. Part of that funding was used to help launch the new Global Energy Alliance for People and Planet.

“That says something about the awareness of our board and many other boards among companies, organizations, and governments that this actually is something that’s really urgent,” Hegenes said.

Devex sat down with Heggenes to learn more about the organization’s work and how he thinks philanthropies can work together to prioritize climate change mitigation funding.

This interview has been edited for length and clarity.

What is the IKEA Foundation’s strategy for addressing climate change?

It's a rapidly developing issue, and it's multifaceted and we try to play a role the way philanthropy can play a role. That's what I would say. So, if you take a step back and look at what the IKEA Foundation is all about, it's about creating a better everyday life for many people. We focus on children and children living in poverty. In that context, we have developed a strategic philanthropy that is quite narrowly focused in two different areas — it's in climate change, and in livelihood developments. We believe that the two biggest threats to children's future are basically climate change and poverty.

So we fund organizations that help us help countries understand what it is they need to do, how they can do it better, and organizations that hold them to account — basically look at the commitments they make and to what extent they deliver on the commitments because that's important to do, and it's important to have independent organizations verifying these commitments. We do that. We work with business. We started our climate work with businesses when we funded something that turned into something we call the We Mean Business Coalition that started back in 2014.

With a coalition like the Global Energy Alliance for People and Planet, which represents several sectors, how do you reach agreements and come to decisions?

Well, the interesting thing about climate is the science is pretty clear and 99% of scientists in the world agree on what needs to get done. So it's not so difficult to agree on what we need to push for. It's how to do it that's key. We believe very strongly in what we call unprecedented collaboration. We believe that bringing organizations together and actually working together is more effective, and it also means that they can muster larger financial resources to do that.

We also work with the financial community to understand the climate risk, as we call it, and we also work with organizations to understand what energy transition means.

How does the Global Energy Alliance build on the $1 billion climate change initiative that you launched earlier this year with The Rockefeller Foundation?

We built a partnership with the Rockefeller Foundation back in May, and they had already worked for a couple of years on developing this concept of a global alliance. They needed another partner to come in with them and to create a base of $1 billion that would attract banks.

With philanthropy money you can not only invest money in developing energy projects in the countries where we operate, but we can also de-risk investments. If we can de-risk investments, more financial resources will come from the development banks and maybe from the private sector because the global south is a more risky area to invest in. It's harder to attract capital to the global south. If we can have this blended finance model where we use philanthropy money to catalyze other investment funds, then we can drive and accelerate the access to energy and renewable energy in a way that otherwise wouldn't be the case.

What will be the breakdown between grant and loan money?

That will depend on the country, the program, the risk, the type of money we can attract. But we hope to use this platform to also attract more philanthropy money. Only 2% of philanthropy money in the world goes towards climate change. And when you think about the fact that climate change is the biggest threat to society today, you should hope that more philanthropy money would come in and and and join us in driving this agenda forward.

We focus on the global south partly because we link it to energy access for the poor. And with energy access to the poor we can also drive job development and increase the standard of living for the poor, but also because the largest growth in energy will happen in the global south. That’s where the population growth is. That’s where the access to energy is limited today but where the need is enormous.

What accountability measures will be in place, especially when it comes to working with local communities?

So two important points on that: First of all, we're going to take a country-led approach. We will work with the countries that are interested in working with us. So go to the country, to the government of that country, work with the governments, the different actors, the private sector community related to energy, and work with the regional and local communities and make sure that we do what's right for that country in close collaboration with people in that country. So that's one thing.

The second thing I wanted to say is that we will set up a very robust monitoring and evaluation system around us. So we will be very focused on measuring the impact and what we do on an ongoing basis, and doing that not only to ensure that we deliver on what we have promised and deliver on our ambitions, but also that we can course correct in a way if we see that certain things aren't working and we need to do it differently.

What’s next for the IKEA Foundation?

We have a lot of work to do with this alliance, but we also work together with others. We also made a commitment as a foundation to fund what's called a Breakthrough Energy Catalyst initiative, which is something that was set up by Bill Gates focused on investing in early-stage technologies that have the potential to be an important part of cutting carbon and cutting greenhouse gases. So we put $100 million into that as an anchor partner.

Another example, which I think is hugely interesting and it's sort of coming to fruition now, is something called methane reduction commitments that we also committed to. More than 20 foundations have come together to actually commit more than $200 million to drive the reduction in methane.

And methane emissions today make up about 50% of total global warming at the moment, and we don't talk a lot about methane. We talk a lot about carbon and cutting carbon. Methane is an area that requires and should have much more focus.