Data reveals philanthropic donations aren’t climate-action driven

4 mins read

London Business School (LBS) recently played host to a thought-provoking symposium under the theme “Forever Forward Thinking: The Power of Philanthropy.” The event convened prominent figures in philanthropy from across the globe to delve into the pivotal role philanthropy plays in addressing pressing global challenges.

The plenary discussion, introduced by François Ortalo-Magné, the Dean of LBS, featured distinguished guests including Badr Jafar, CEO of Crescent Enterprises and Special Representative for Business & Philanthropy at COP28; Batia Ofer, founder of Art of Wishes; and Sir Lloyd Dorfman CVO CBE, founder of Travelex Group. The discourse probed the diverse practices of philanthropy worldwide and its evolving significance as a form of catalytic capital capable of scaling solutions to combat global issues like climate change.

Badr Jafar offered valuable insights into philanthropy, tracing its journey from conventional charity to a more strategic and impact-driven approach. He emphasised the distinction between charity and philanthropy, stating, “The key difference lies in viewing strategic philanthropy as an impact-focused form of giving, rooted in disciplined planning and execution, with unwavering commitment to achieving desired outcomes.”

The conversation expanded to encompass the role of businesses and philanthropy in addressing societal and environmental challenges. Jafar, who holds the role of COP28 Special Representative for Business and Philanthropy, underscored the responsibility of businesses as agents of positive change. He remarked, “Businesses are increasingly expected to be drivers of positive change in social and environmental causes, aligning with the evolving paradigm shift regarding their role.”

Addressing philanthropy’s role in tackling environmental issues, Badr Jafar highlighted its vital function in catalysing global climate action. He noted that less than 2 per cent of philanthropic funding worldwide is currently directed towards climate-related causes. “Private philanthropy accounts for over $1 trillion annually, surpassing official development assistance from governments by more than five times. Strategic philanthropy possesses the unique ability to deploy flexible, risk-tolerant, and patient capital, leveraging business and government resources to create a multiplier effect.”

He continued, “Given the projected annual requirement of $4 trillion to $9 trillion to support net-zero and nature-positive goals, COP28 in the UAE will set new standards for ambition and the establishment of a global framework to unite capital actors in swift and large-scale action.”

The panel also explored emerging trends in philanthropy, including the impending intergenerational wealth transfer and technology’s influence on reshaping philanthropic engagement. Jafar shared his perspective on these developments, stating, “Over the next 15 years, an estimated $68 trillion will be transferred to the next global generation, marking the largest intergenerational wealth transfer in history. Additionally, the growth of digital platforms is shifting philanthropy from a ‘one-to-many’ model to a ‘many-to-one’ model, enabling entities seeking assistance to tap into smaller donations from an extensive pool of retail donors.”

The symposium concluded with a discussion on the rising trend of collaboration among philanthropists who are joining forces and co-investing resources to achieve common objectives. This collaborative approach reflects the evolving landscape of philanthropy as it seeks innovative ways to drive positive change on a global scale.