After Years of Growth, Climate Philanthropy Barely Budged in 2022
/Shipping is one sector that saw increased interest among climate funders in 2022. Avigator Fortuner/shutterstock
Temperatures are rising. Sea levels too. Climate philanthropy? Not so much.
Total philanthropic funding from individuals and foundations to stem the climate crisis was virtually unchanged in 2022, according to a new report from ClimateWorks Foundation, a letdown for the movement after years of rising funding.
One positive was foundation funding for the crisis, which reached $3.7 billion, rising 12% from the year before, the philanthropic intermediary found. Yet even that represented a significant slowdown following several boom years, including increases of 34% in 2020 and 45% in 2021.
“We should see this report as a reality check and a call to action for all of philanthropy to up their game,” said Helen Mountford, president and CEO of ClimateWorks. “There are many solutions that exist today that are ready to scale but they must be funded like we want them to win.”
This year’s edition of the annual publication, “2023 Funding Trends: Climate Change Mitigation Philanthropy,” said the stagnant growth was the result of global economic challenges dampening philanthropic donations and a return to normalcy after exceptionally high giving in 2021, reflected in flat growth for philanthropic giving as a whole.
Climate change funding still represents well under 2% of all philanthropy, the widely cited figure established by past ClimateWorks reports, and this year’s edition notes it would have taken more than $10 billion in additional funding last year to pass that threshold. With total giving between $7.8 and $12.8 billion, according to the report, that remains a long way off — unless a few billionaire climate donors unleash MacKenzie Scott-like grantmaking.
Trends: Super pollutants, Africa and India, equity and justice
While overall funding flattened out, there were several new trends in foundation funding. For instance, funding rose 60% for combatting super pollutants, particularly methane, likely boosted by more than 20 philanthropies launching the Global Methane Pledge in late 2020, and committing $328 million to reducing emissions of the potent greenhouse gas.
Funding to decarbonize transportation and industry also saw increases, each rising 24%. Despite the double-digit gains, all three sectors are still relatively small, accounting for 4% each of total foundation funding. Meanwhile, the top sectors have not changed. Clean electricity remains the largest grantmaking category (11%), followed by forests (9%) and food and agriculture (8%), almost unchanged from 2021.
Philanthropy disproportionately funds climate action in the United States and Europe, and that did not change last year, with the two regions receiving nearly two-thirds of all country- and region-specific funding. But other geographies made up some ground.
Africa and India saw the fastest growth of all regions, rising 38% and 37%, respectively, along with Latin America (15%). Those three regions — which collectively account for about 40% of the world’s population — still receive just 20% of geography-targeted grantmaking.
“We are starting to see a shift where funding is flowing increasingly to the Global South, and this needs to continue,” said Helene Desanlis, lead author of the report and director of climate philanthropy for ClimateWorks’ Global Intelligence team.
The report also flagged a growing interest in equity and justice, though that should come as a surprise to no one in the sector, and has been cited in prior ClimateWorks reports. As in the rest of philanthropy and society as a whole, the racial justice protests of 2020 launched many discussions and internal shifts among green grantmakers, though it’s unclear whether an initial surge of funding has continued, and many longstanding gaps and challenges remain.
Emerging interests: Shipping, buildings, minerals, more
Based on its conversations with funders, ClimateWorks spotlights four emerging areas of interest: maritime shipping, the built environment, minerals for the energy transition and corporate accountability.
Like most sectors, the shipping industry receives a much smaller share of climate mitigation philanthropy (0.5%) than its share of global greenhouse gas emissions (3%). The good news is that funding for the sector tripled between 2018 and 2022. The bad news is that it still received only $16 million last year. ClimateWorks sees promise in several recent international efforts to raise the sector’s ambition and speed the transition to green shipping options.
The building and construction sector is in a similar state, accounting for many times more carbon emissions (37%, based on what ClimateWorks includes) than its share of climate philanthropy (5%). But the sector outpaced overall foundation funding growth, rising 20% between 2021 and 2022. In a microcosm of broader trends, two-thirds of funding goes to the United States, Europe and Canada, even as a population-driven urban boom in the Global South threatens to lock in long-term emissions.
Electrifying everything is going to require a lot of minerals, raising worries about shortages, environmental degradation, human rights abuses and national security. Like the rest of the world, philanthropy seems to have awoken to these concerns last year, allocating an estimated $35 million. ClimateWorks, for its part, has started a funder learning group on the issue.
Corporate accountability has seen funding more than quadruple, rising to $148 million last year. The work includes establishing benchmarks and commitments, ensuring standards are met, developing mandatory regulations and creating enforcement mechanisms.
What’s not in the report
This 28-page report offers the best available data on funding for climate mitigation, which has always been its focus. But as ClimateWorks readily acknowledges, there are a couple of related funding areas for which there are no hard numbers within its pages.
While the report notes anecdotal evidence of interest in equity and justice, it does not provide figures for how much climate justice funding is actually flowing to nonprofits. ClimateWorks attempted to put a number on such grantmaking in 2021, but later said it was seeking partners to ensure it accurately collected the data, particularly across different geographies. Two years later, that search continues, Desanlis said.
“We need to partner with people that have the required expertise and legitimacy to be able to track this funding,” she said. “We're working to try to find this partnership.”
Climate adaptation funding — which helps people adjust to climate chaos, rather than strictly to prevent it — is also not tallied in the report. Yet activity is growing. Philanthropy helped broker a couple of symbolic breakthroughs in 2021 and the report notes rising interest, if not yet hard numbers. That could soon change.
“We're working actively with a few partners to provide a better understanding of funding flows, and we hope to report more on this next year,” Desanlis said.