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Climate Philanthropy Growth: A Surging Trend in 2023

In a significant development, climate philanthropy funding surged by 20% in 2023, marking the first instance since 2020 where it has outpaced the overall growth in global philanthropic giving. The 2024 Funding Trends Report by the ClimateWorks Foundation reveals this remarkable increase, shining a light on critical financing gaps and the need for a more targeted philanthropic approach towards climate change amidst escalating environmental crises.

The report paints a comprehensive picture of the trends that have emerged in climate financing over the past five years, examining contributions from individuals and over 90 foundations. It estimates that between $9.3 billion and $15.8 billion was mobilized for climate change mitigation efforts in 2023 alone. This increase is a compelling indicator of the growing recognition of the urgency to address climate issues by philanthropic entities.

Helen Mountford, the President and CEO of ClimateWorks Foundation, stated, "The rise in climate financing is a positive step, but the stakes have never been higher. As the global landscape grows increasingly complex and the planet continues to warm, philanthropy plays a crucial role in catalyzing transformative climate actions that withstand political changes and prioritize what people need the most: economic and development opportunities, health, safety, and a livable planet."

Key Findings from the Climate Funding Trends Report

Key insights from the report include:

1. Record Growth: The climate funding sector saw donations reaching a record $4.8 billion in 2023, nearly three times the $1.7 billion reported in 2019. This reflects a sustained commitment from philanthropic institutions towards climate change.

2. Funding Priorities: The report highlights that sectors such as clean electricity, forests, and food and agriculture have been the top recipients of funding from 2019 to 2023. Moreover, public engagement remains the leading strategy for philanthropic investments in climate protection.

3. Geographical Disparities: Alarmingly, the distribution of funds heavily favors the U.S. and Europe, which together accounted for 60% of the total grants designated for climate action from 2019 to 2023. Conversely, regions such as Africa, the rest of Asia, Oceania, and Latin America received only about 20%, despite hosting over 6 billion people. This pronounced inequality in funding strategy emphasizes a critical need for more equitable distribution and support to lower-income countries.

4. Adaptation and Resilience Funding: For the first time, the report includes data on adaptation funding efforts, revealing that at least $600 million was allocated in 2023 to help communities enhance their resilience against the rising impacts of climate change.

5. Emerging Focus Areas: As global climate priorities shift, Brazil, the future host of COP30, and the industrial sector—responsible for a third of global emissions yet significantly underfunded—are beginning to receive increased attention from donors.

Despite this positive momentum, climate funding remains woefully behind, accounting for less than 2% of total global philanthropy, significantly undermining efforts needed to halve emissions by 2030 and avert the worst effects of climate change. Surabi Menon, Vice President of Global Intelligence at ClimateWorks, remarked, "The time is ripe for ambitious, strategic financing. Philanthropy must seize this moment to accelerate progress towards climate goals for 2030."

The Path Ahead

The report emphasizes three vital opportunities for philanthropy moving forward:

• - Unlocking the catalytic and collaborative potential of philanthropy to drive groundbreaking investments from public, private, and multilateral financing sectors towards climate solutions.
• - Making intensive investments in recipient capacity building and providing multi-year flexible core support, particularly in low to middle-income countries.
• - Advocating for holistic, integrated climate solutions that intersect with social issues such as human rights, public health, and economic development.

For those eager to delve deeper, the complete report is accessible through the ClimateWorks Foundation's platform, which has been instrumental in distributing over $1.8 billion across more than 850 funding recipients within over 50 countries since its inception in 2008.

Conclusion

By harnessing collective efforts and innovative strategies, philanthropy has the potential to bridge divides and contribute to building a sustainable and just future for all. The rising trend in climate philanthropy funding is a promising step toward achieving a greener planet, highlighting that concerted actions and investments are indeed making a difference in the fight against climate change.