Less than 2% of philanthropic capital is directed towards fighting climate change. But targeting “big wins” in this field can lead to more investment, according to research commissioned by the IKEA Foundation.
The IKEA Foundation has unveiled analysis laying out the best ways global philanthropic organisations can tackle climate change.
The research, which was presented last week at the UN climate change conference, COP27, in Sharm el-Sheikh, Egypt, identified eight high impact opportunities. These included providing targeted financial support for a fair and inclusive energy transition, creating a market for minimising upstream methane emissions, shifting to alternative and plant-based proteins and supporting the market for electric two and three-wheeled vehicles.
The results of its latest research will help decide how the IKEA Foundation will deploy €600m in climate funding, the organisation said.
Last year, its board announced it would spend €1bn over the next five years to speed up the reduction of greenhouse gas emissions. The IKEA Foundation has since earmarked €400m for the Global Energy Alliance for People and Planet, which was launched during last year’s UN climate change conference, COP26, in Glasgow.
‘Decisive decade for our planet’
Currently, less than 2% of global philanthropic annual grants are dedicated to climate change, the foundation said, citing recent analysis by the ClimateWorks Foundation.
“We know that a rapid and sustained decrease in global emissions is required if the world is to meet its pledge of keeping global warming at or below 1.5°C,” said Per Heggenes, CEO of the IKEA Foundation. “By sharing our research we hope to support and inspire other philanthropies, during this decisive decade for our planet, to step up their ambition to safeguard our environment.”
Lena Hansen, interim chief programme & strategy officer at the Rocky Mountain Institute, said collaboration “is critical to implement solutions that set off catalytic tipping points and keep warming to 1.5C”.
The methodology laid out in the research “could be the critical unlock that helps foundations prioritise the highest impact interventions to reduce emissions and deploy capital fast”, said Jeremy Oppenheim, founder of Systemic. Although more funds need to be allocated towards fighting climate change, “this is not just a volume game”, said Oppenheim. “It matters where and how philanthropy uses its capital.”
The fact that the IKEA Foundation has made its analysis public “demonstrates their deep commitment to urgent climate action and belief in the catalytic role of a strategically coordinated philanthropic sector”, Oppenheim said.