Recapping a Big Week in Green Funding: a $5 Billion Pledge, Major Divestment News and More

Climate Week NYC feels like something of an anachronism in an age when scarcely a week goes by without a hurricane, forest fire, cold snap, heat wave or other brutal reminder of our out-of-whack climate.

Yet the yearly event, held by the Climate Group, remains one of the busiest seven days for big climate philanthropy announcements. This year was no exception. The event also coincided with the U.N. General Assembly in New York, which added to the fanfare.

By far the biggest news was that a group of nonprofits and foundations have pledged $5 billion over 10 years for conservation work, including a $1 billion commitment from the Bezos Earth Fund. But that was not all. The MacArthur Foundation became one of the most prominent funders to publicly divest its endowment from fossil fuels. And two new climate-friendly investment funds have drawn several major philanthropists in a small but promising sign of efforts to flex endowment assets.

Here’s a closer look at all three developments.

A massive conservation pledge

The headline news: Nine organizations have pledged $5 billion over 10 years to create, expand and manage more protected swathes of land and sea around the world. Called the Protecting Our Planet Challenge, the effort will support the international campaign to protect 30% of the planet’s land and waters by 2030, known as 30 x 30. By the organizers’ account, it is the largest private funding commitment for biodiversity conservation. By any account, it is a lot of money for a critical cause.

It’s also worth stepping back to get some perspective on such a pledge. First, it’s always helpful to lay out the math: Spread out over a decade, the pledge equates to $500 million a year. No small sum, but a bit less impressive when you put it that way, especially considering the size of the problem, the make-or-break nature of the next 10 years, and the fact that participants are among the richest people and institutions in the world.

Second, the figures so far are a little fuzzy. In the public announcement of the effort, only three of the partners put a dollar amount on their commitments: the Bezos Earth Fund ($1 billion), Wyss Foundation ($500 million) and the Rainforest Trust ($500 million). Press releases from other partners—including Bloomberg Philanthropies, Re:wild, Rob and Melani Walton Foundation—did not give any indication how much they would spend.

Also, it’s always important to remember that a pledge is just a pledge. While institutional pledges are more reliable than individual commitments, any promise of future funding is still a promise, not cash in hand for nonprofits. In this case, it’s probably more solid than most, as many partners are already giving a lot to conservation.

One pledger, the Gordon and Betty Moore Foundation, has in recent years spent roughly $100 million annually via its environmental conservation program, which, if continued, would add up to $1 billion over 10 years. Another partner, Arcadia, gave out nearly $48 million in both 2018 and 2019 through its environmental program, which, over a decade, would add up to almost $500 million.

Of course, not all future grants under those programs would necessarily fall under this pledge. But the point is that this commitment, though large, is not entirely about new streams of funding for this cause. It’s as much about a public and united philanthropic commitment—and a desire to snatch headlines for that cause.

And the need is great. A million plant and animal species are at risk of extinction. Vast and vital ecosystems—such as coral reefs—are at risk of collapse. Populations of mammals, fish, birds, reptiles and amphibians have dropped by more than two-thirds on average since 1970.

The partnership is also focused on working with Indigenous peoples and local communities on these projects. One partner, Nia Tero, is an international nonprofit focused on empowering Indigenous peoples to safeguard their territories while earning a livelihood. Studies have repeatedly found greater biodiversity and climate benefits in such arrangements. The key will be how this plays out on the ground, but a prominent commitment to partnership is a promising start.

One thing should be emphasized: These nine are going to need plenty of help. A major U.N. report on biodiversity estimated $66 billion to $626 billion in investment is needed for protected terrestrial and marine areas—which is but one of 20 targets needing substantial funding. This might be the largest gift ever for biodiversity, but as long as we’re in an age of multi-billionaire environmentalists sitting atop growing fortunes, fingers crossed that the record is broken again soon.

MacArthur divests from fossil fuels

Earlier this month, Harvard University bowed to years of pressure from students and activists by announcing it had divested its $42 billion endowment from fossil fuels. It joined a long list of divested campuses, ranging from other U.S. Ivy League institutions like Brown and Cornell, to its neighbor Boston University, to many campuses overseas.

While it was a long time coming, the decision also marks a potential tipping point. Harvard has the world’s largest academic endowment. Its announcement did not fully embrace the divestment movement—it didn’t even use the word “divest”—the change nevertheless puts more pressure on its even-slower-moving peers (often some of the largest) to follow suit. And the steps those top-flight institutions take will help show the way for smaller holdouts to follow.

So does MacArthur Foundation’s Climate Week announcement that it will divest carry the same weight? At first glance, I’m skeptical. It is by some accounts the largest foundation to divest, but that’s only if you don’t count the Bill and Melinda Gates Foundation’s quietly announced intention to exit its fossil fuel holdings. Cross-campus student activism can build pressure within the academic sphere, but there isn’t a comparably potent force in philanthropy. Foundations face little pressure to follow their peers.

That is not to say it carries no weight at all. Indeed, MacArthur President John Palfrey explicitly acknowledged the power of prior examples, writing “there are some foundations and advocates who have been ahead of us and shown the way,” in his statement. Coming less than a year after the Rockefeller Foundation—founded with oil wealth—formally announced its intention to divest from fossil fuels, MacArthur’s decision offers yet another case study for cautious but divestment-curious peers.

Evidence is mounting that divestment has limited oil and gas companies access to the capital they need to grow and expand. And time is running out to slow the warming of the planet before catastrophic damages become incalculable ones. Let’s hope this ongoing trickle of announcements turns into a flood.

Editor’s Note: For an in-depth exploration of the process of divestment and what holds back many foundations from making the commitment, check out IP’s two-part series on the topic.

Prominent philanthropists join new climate funds

It’s a tired if vital point: foundation assets do not get enough attention. Most coverage, including my own, focuses on grantmaking, or even promises of future funding, as above. Yet philanthropic assets—which now exceed $1.2 trillion—rarely get the same scrutiny.

So perhaps a pair of climate funds started during Climate Week deserve more attention: Galvanize Climate Solutions and Earthshot Ventures. Two bold-faced philanthropic names—Emerson Collective and Tom Steyer—have invested in each of them, as well as some billionaire philanthropists, including Marc Benioff and John Doerr.

Granted, the philanthropists named above are not exactly your standard institutional funders. Emerson Collective, after all, is an LLC. And other than Laurene Powell Jobs’ organization, it’s unclear if any of the other investors’ participation is tied to their philanthropic funds.

Nor are these new investment vehicles particularly unique. The last few years have seen what’s been called a “climate-focused fund frenzy” (and some studies say it is rife with greenwashing). But to have some philanthropic names attached with them is intriguing.

Perhaps these tech-enriched philanthropists will prove to be early adopters of a trend that reaches more widely across philanthropy. Foundation assets may pale in comparison to private dollars, but that’s no reason not to make every effort to leverage them for good.

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