It’s time for philanthropy to step up the fight against climate change

Climate change has begun to exacerbate societal challenges in many areas that philanthropies have prioritized, such as education, health, human rights, equality, and food security. Still greater threats to human well-being lie ahead. Climate hazards are set to become more frequent and more intense over the coming decade, and McKinsey research shows that levels of physical risk will increase unless global greenhouse-gas (GHG) emissions are drastically reduced.

Despite climate change’s impact on their work, philanthropies have historically allocated relatively small sums to addressing the problem. In 2020, US-based grant makers disbursed almost $64 billion. Of that, about $320 million went directly toward climate change (Exhibit 1). Additional funding went to related environmental priorities, such as air, land, and water conservation, for a total of $1.4 billion, but even these amounts pale in comparison to those spent on matters such as education ($10.5 billion).

More recently, major philanthropists have pledged large sums to climate change—$500 million from Michael Bloomberg, $750 million from Stewart and Lynda Resnick, $1 billion from Hansjörg Wyss, $3.5 billion from Laurene Powell Jobs, and $10 billion from Jeff Bezos—joining longtime climate funders such as the David and Lucile Packard Foundation, the William and Flora Hewlett Foundation, and the John D. and Catherine T. MacArthur Foundation.

Compared with other major categories, climate and adjacent environmental areas receive a low proportion of grant funding.
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Even accounting for these new commitments, philanthropic funding of climate-change solutions remains meager compared with the scale of the problem and the speed with which the world must act to stop climate change and the suffering it causes. To lower the odds of initiating climate change’s most dangerous effects, scientists estimate that it’s necessary to restrict warming to 1.5°C. This would require a major reduction of GHG emissions by 2030 and the achievement of net-zero emissions by 2050—an endeavor calling for trillions of dollars of additional capital spending. Still more funding will be needed to improve resilience against physical climate hazards that are now inevitable.

While much of that capital would come from companies, governments, and investors, philanthropists can play a vital role in the world’s response to climate change by targeting geographies, industries, and solutions that most need support. Foundations, charitable LLCs, and individual donors share a distinctive ability to deploy nimble, responsive, flexible, risk-tolerant, patient capital in ways that support high-value interventions directly and can attract more funding from other sources. And they have a broad range of funding mechanisms with which to drive impact, including grants, mission- and program-related investments, competitions and prizes, and venture philanthropy.

In this article, we illustrate opportunities for philanthropists to act on climate change by highlighting three promising focus areas: fostering policy environments and civil societies driven to fight climate change; investing in climate solutions that lack market support; and protecting people from climate risks and supporting environmental justice. We close with a call for the philanthropic community to increase their own climate funding, mobilize capital from other sources, and improve collaboration—all of which would make a significant impact on the climate challenge.

The climate imperative for philanthropy

The reason for philanthropies to address climate change is clear: a warming atmosphere puts pressure on the very causes and stakeholders that philanthropies most want to support. For communities around the world, climate change has worsened physical hazards, such as violent storms, floods, drought, and intense heat, that take a severe human and economic toll. Due to the warming power of GHGs already in the atmosphere, these harmful effects are set to become more widespread and intense through 2030. And if emissions continue to rise unabated, climate science tells us that feedback loops, such as forest declines (or “diebacks”), could cause significant further warming that would lead to even more intense physical hazards. These climate impacts multiply the risks to philanthropic endeavors in areas such as the following:

Global health and pandemics. Climate change increases the burden of disease and ill health in various ways. Between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year due to heat exposure in elderly people, diarrhea, malaria, and childhood undernutrition.

In India, some 160 million to 200 million people could annually face a 5 percent chance of being exposed to a lethal heat wave as early as 2030 without targeted adaptation action. Deforestation, which accelerates climate change, also increases the risk of zoonotic diseases—of which SARS-CoV-2, the coronavirus that causes COVID-19, is just one lethal example.

Inequality. Racial and ethnic minorities, low-income communities, and less-developed countries tend to be more exposed to climate hazards. For example, African farmers tend to be more vulnerable to fluctuations in rainfall, warmer temperatures, and variable yields than farmers in developed countries. Research by the McKinsey Global Institute indicates that Asia’s least-developed countries face the greatest climate risk and that the extreme heat that results from climate change will reduce working hours in poorer countries more than in rich countries (Exhibit 2). Typically, underprivileged groups also have less access to social programs and resources that might help them withstand these hazards.

Climate change is likely to reduce working hours more in poor countries than in rich countries.
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Displacement and statelessness. In 2017, weather events such as floods, wildfires, and storms displaced an estimated 22 million to 24 million people. Climate-induced displacement is likely to continue as extreme weather and chronic physical hazards make regions less habitable. The World Bank estimates that by 2050, some 143 million people in Latin America, sub-Saharan Africa, and South Asia will migrate domestically because of climate change.

Empowerment of women and girls. Climate hazards exacerbate underlying gender inequality. Women comprise the majority of individuals displaced by climate-related disasters worldwide.

Climate change and climate-related disasters have been shown to increase rates of domestic violence and gender-based sexual violence for women and girls.

Droughts, floods, and extreme temperatures disproportionally increase women’s workloads, as rural women and girls in developing economies rely more on agricultural work and carry the burden of gathering food, fuel, and water for their households.

By helping to stabilize the climate and blunt climate change’s locked-in effects, philanthropies can aid stakeholders whom they already aim to serve. To do so efficiently, philanthropies will…

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