Giving back to nature by unlocking scale and speed

Climate finance is rising, but there’s still a gap that philanthropy can help fill, writes Callum Ross. 

Environmental and climate philanthropy in Australia, and worldwide, has enormous potential to help bridge the gap in finance needed to reach net zero, reverse nature loss, and create a more sustainable, resilient world for both people and nature.

Climate finance is rising, but still falling well short of targets, even as urgency for action ramps up worldwide. Greening Australia brought together NAB Foundation’s Laura Cochrane and Macdoch Foundation’s Michelle Gortan for a dynamic discussion on how philanthropy can unlock scale and speed for climate action and ecosystem restoration.

Increasing investment

The scale and impact of the climate and biodiversity crises needs new levels of investment from all levels of government, financial actors, the corporate sector, and philanthropy to achieve equitable and positive environmental outcomes. 

There is enormous potential to mobilise philanthropic funds for nature. Globally, climate change giving   is still just a fraction of global philanthropic donations (less than two per cent in 2021), while Australia’s environmental charities receive less than one percent of the Australian charitable sector’s overall revenue (0.5 per cent in the 2019 reporting year).

That said, US-based ClimateWorks Foundation found that global climate philanthropy had grown by an incredible 25 percent in 2021, outpacing the growth in overall giving. Closer to home, the rate of donations and bequests to Australia’s environmental charities jumped by 10.9 per cent between 2018 and 2019.

In part this is due to growing awareness of the impacts of climate change and biodiversity loss, but “there’s also a generational shift happening in philanthropy, and we’re seeing climate change rise on the list of global priorities,” said Gortan. “That’s changing the funding landscape and moving investment into climate and nature-related areas.”

Both Cochrane and Gortan also highlighted the importance of collaboration between philanthropists to pool resources in support of large-scale initiatives that achieve greater impact for climate and nature. 

Some global examples were on display at the most recent UN climate talks (COP27), where philanthropic foundations and collaboratives donated more than $2 billion for projects such as reversing tropical deforestation (Forests, People, Climate), supporting an equitable energy transition, and scaling Africa’s carbon markets (Global Energy Alliance for People and Planet).

Early in 2023, the World Economic Forum also launched Giving to Amplify Earth Action, a global initiative to fund and grow public, private, and philanthropic partnerships (PPPPs), recognising the ‘multiplier effect’ philanthropy can have on funding for change.

Thinking in systems, not silos, for a just transition

Recognising the escalating urgency, scale and complexity of the challenges involved in climate change and biodiversity loss, both Gortan and Cochrane highlighted the need for a whole-of-system approach in Australia and worldwide.

“Philanthropy needs to move beyond the traditional silo approach of looking at single issues, and support funders to understand the interrelatedness of the issues,” said Gortan, pointing to the example of the Macdoch Foundation-initiated Farming for the Future program in partnership with the National Farmers Federation. 

“We need to recognise the nexus between climate, nature and agriculture in how we develop solutions. We also need to move beyond focusing so heavily on carbon emissions and look at the full suite of natural resources in our landscapes that contribute to restoration, mitigation and adaptation. And when we do look at carbon, we need to recognise nature loss as a driver of emissions on agricultural landscapes.”

“Taking a systems approach intentionally builds capability into every part of the sector to ensure we can transition in a way that brings an entire industry along. Environmental solutions also need to be economic solutions … It’s people and nature, not just nature.”

Cochrane explained that philanthropy is also increasingly taking a systems approach to how it supports for-purpose organisations, looking beyond traditional grantmaking to how funds and resources can be used to catalyse change at local and large scales, and build the capability of delivery partners.

Promoting collaboration 

Where governments can be hamstrung by election cycles and party politics, and corporations need to demonstrate success to shareholders and protect their bottom line, philanthropy’s independence means it is uniquely placed to broker cross-sector collaborations that can unlock scale and speed for change. 

Both Cochrane and Gortan highlighted the role philanthropy can play behind the scenes, supporting new and transparent conversations between diverse and sometimes unusual actors to find common ground and identify solutions for problems associated with climate change and biodiversity loss. 

“It’s important to start from a place of listening and learning, open-mindedness, and patience for the process … Philanthropy can get subject matter experts together in a room – without any bias or agenda – and find opportunities that can be tested for real impact,” said Cochrane.

Gortan agreed and added: “We can’t work in systems or at scale without working in partnership. Often the unlikely allies can be the most effective in delivering the change we need to see.” 

Backing research and innovation, taking risks

Philanthropy’s independence and financial freedom is a major advantage in supporting breakthroughs on climate change and biodiversity loss. The sector has a vital catalytic role in providing seed capital or enabling projects that public and private sector may consider too risky or too long term to back. 

As Cochrane said: “Taking considered risk is the most important thing we can do for the sector. Philanthropy is uniquely able to test and learn over the long term, to put money towards things that don’t need to have a commercial outcome – which is a privileged position.” 

Gortan also highlighted the opportunities and responsibilities for environmental and climate philanthropy in Australia to make meaningful change by deploying capital to address market failures and leading on aspects of the problem that are getting drowned out in the broader narrative.

“For example, mainstream agriculture has not traditionally worked with philanthropy, seen as the domain of big money and big business. But given the sector’s emissions profile and dependence on nature, it is the next frontier. If we mobilise philanthropy into nationally significant projects that deliver both economic and environmental solutions, we can create a just transition to a nature-positive, climate-resilient agricultural sector.” 

Both Gortan and Cochrane called out the need to shift away from reactive, disaster-driven environmental and climate philanthropy to proactive preparedness, prevention and resilience-building. 

“The 2019-20 bushfires were a tipping point for public awareness of the link between climate change and natural disasters,” said Cochrane. “That opened up the conversation about a different type of philanthropy around natural disasters, and now there’s momentum gathering around ways to help landscapes and communities both prepare for and recover from natural disasters.”

NAB Foundation’s Environmental Resilience Fund, for example, is supporting the Climate-Ready Restoration partnership between WWF-Australia and Greening Australia, exploring innovative environmental interventions to increase landscape resilience and reduce risk for people and nature in a changing climate. This sits alongside their ongoing grants for community-led innovation in disaster preparation and recovery. 

Restoring the future

In summary, environmental and climate philanthropy in Australia and worldwide is uniquely placed to facilitate cross-sector partnerships and funnel capital into innovative, systems-based solutions to climate change and biodiversity loss, helping unlock the scale and speed of change required at this critical tipping point for restoring the future.

“As the urgency of the dual climate and biodiversity crises becomes clearer, the philanthropic community is rising to the challenge by providing an unprecedented amount of funding to organisations committed to leaving a brighter future for the next generations. We’re calling on more people to follow their lead, including governments with the power to change their funding priorities to reflect the urgency of the climate challenge,” says Amanda Martin OAM, CEO of Australian Environmental Grantmakers Network.