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Climate: how to create a positive domino effect

October 17, 2024

Climate finance was central to discussions all over the world, and funding to reach net zero and restore biodiversity is still falling short. New research highlights priorities for action and shows how partnerships between organizations from the philanthropy, private and public sectors can create a positive domino effect, cut emissions at speed and allow for a just transition.

Case studies of the report, developed in collaboration with McKinsey, include the global coalition Mangrove Breakthrough as well as the reshaping of land degradation in Latin America through Initiative 20×20 and the Breathe London project on enhancing air quality. Other proven partnerships include the Energy Transition Accelerator in developing countries.

“For partnerships to work effectively, various stakeholders should be willing to come together to bring collective as well as individual expertise and resources to find solutions,” said Gim Huay Neo, Managing Director, World Economic Forum. “Without working with other partners to find the right intervention points, it is difficult for a single institution to deploy their funds.

The transition to a net-zero economy presents a critical and necessary shift but is unavoidably costly. The financial gap lies in the extensive overhaul required in industries to adopt cleaner technologies and sustainable practices. The initial investments demand substantial funding, often beyond the capacity of many individual businesses or governments. Bridging this divide necessitates collaborative efforts and innovative financing models to mitigate risks and incentivize investments.

Joining private and public actors with philanthropic efforts offers a strategic approach to unlocking the transition to net zero and restoring nature. Philanthropy, with its nimble and risk-tolerant characteristics, plays a pivotal role in providing early-stage funding, catalyzing wider investments while securing the most equitable outcomes.

The philanthropic-public-private partnership model uses the collective power of its members to bridge critical financing and knowledge gaps and generates capital structures that expedite a faster transition to sustainability. Examples of its use are already prominent. Over the past 20 years, more than 50 climate and nature-focused philanthropic-public-private partnerships have surfaced, indicating initial strides in addressing climate-financing hurdles.

Source: World Economic Forum