That climate change is a huge concern and has a cascading effect on businesses and the economy are clear. A collective and multi-pronged effort is required from individuals, corporates and countries to solve the climate crisis.
Illustration: Chaitanya Dinesh Surpur
Last year, specifically, the world experienced telling signs of a notable shift in weather patterns and a dramatic rise in natural calamities: Catastrophic storms, torrential rainfall and relentless heat waves. This took a toll on lives, livelihoods and economies. The general degradation of air, soil, oceans, ecology and forests has cast an urgent need for a swift course correction towards sustainable living.
The problem is daunting, agrees Zerodha’s CTO Kailash Nadh, who envisioned and helped set up the Zerodha-sponsored Rainmatter Foundation as a philanthropic initiative for climate action. “There is no technology to reverse climate change, and one is forced to have a pessimistic outlook, but we have to try,” he adds.
That climate change is a huge concern and has a cascading effect on businesses and the economy are clear. There is no ambiguity on those fronts. Decades of inertia and ignorance have compounded the problem to a magnitude that it is now hard to solve at a singular level. A collective and multi-pronged effort is required from individuals, corporates and countries to solve the climate crisis.
This requires large-scale funding, and a move towards green alternatives. Private and public investments come with riders and an underlying objective of profit. It would make a big difference if investments are augmented with philanthropic capital—the powerful impact of which has been seen in areas such as health and education.
However, private and foundation philanthropy for climate action have been unremarkable so far. According to EdelGive Hurun India Philanthropy List 2022, donations towards environment and sustainability accounted for ₹193 crore out of total charitable donations of ₹5,666 crore. The silver lining is that this is an increase of 46 percent over the previous year.
Shloka Nath, CEO, India Climate Collaborative, says a larger number of philanthropists are beginning to prioritise the need for innovative solutions for climate change, and she believes there is a huge uptick in the number of philanthropists interested in aligning their investments with climate action. As a result, there is an increase in funding.
“Due to the scale and complexity of the climate crisis, it can be difficult to identify strategic philanthropic interventions. Funding may also get slotted into climate-adjacent categories due to pre-existing funding priorities or regulatory requirements,” Nath adds.
Also read: Green Growth: Government's vision for a lifestyle for the environment
It is also true that corporate donations in the area of climate action face a relatively higher level of regulatory and investor scrutiny than private or foundation philanthropy. There is a hesitation to commit towards a long-term objective when shareholders are obsessed with quarterly results. The capital market, for instance, can severely punish a company for missing its earnings target even by a small margin.
“A lot of industries do not realise the cliff that is coming if we don’t solve climate. How is a cliff not relevant to shareholder value? If you are running an FMCG company and supply chains snap because of a continuous series of crop failures, how will it not impact FMCG, and how can shareholders not be concerned about it?” questions Sameer Shisodia, CEO, Rainmatter Foundation.
The economy isn’t structured to slow down, and investors, though aware about the deteriorating quality of the environment and its unforgiving repercussions for humanity, are incentivised to deliver short-term gains over sacrifices for long-term benefits.
“Taking a decision to slow down is what is really required to create maximum impact. But there is a conflict of interest of sorts. If some of the world’s largest funds and money managers begin to question executive teams or companies on some of these aspects, and are willing to let go of some returns, then probably that will create maximum climate impact,” says Nithin Kamath, co-founder and CEO, Zerodha.
Kamath co-founded Rainmatter Foundation
in 2019, and the founders pledged to allocate ₹750-1,000 crore in the coming years to address the problem of climate change at various levels since environment issues are interconnected. The team wants to focus on human livelihoods to bring about a positive change in this area rather than solely focus on projects that look at the effects of climate change versus the underlying cause. “Most marginalised people will be the first to be affected by climate change. If livelihoods are not handled, societal effects of climate catastrophes will be exponentially worse,” says Nadh.
So far, Rainmatter Foundation has extended grants to the tune of ₹200 crore to support 81 projects, and has committed to deploy an additional ₹250 crore to these projects this year. Shisodia and his team spend months with potential project partners to understand their work in-depth before committing to finance them. “If you have funds to deploy, the biggest problem is not really deploying the funds, but finding the right people and organisations,” adds Nadh.
The India Climate Collaborative works with philanthropists to fight climate change. One of its objectives is to identify critical sectors that need investment, and drive funding towards climate solutions, because it can be difficult to identify inclusive climate interventions that align with India’s developmental challenges.
“We are building a climate solutions platform to connect funders with organisations that are designing or implementing climate solutions that account for climate risks, community development, and ecosystem health. Vulnerable communities are driving innovation on-ground, and, through this platform, philanthropic capital can help scale these solutions,” Nath says.
Also read: Why philanthropy needs to include a climate lens
Another issue for philanthropic capital for climate action is the highlighting of an investment outlay of $10 trillion for India to reach net zero carbon emission by 2070. “The framing of the problem in terms of temperature and carbon has not allowed us to see how it relates to our daily lives, governance policies, etc,” Shisodia asserts.
Also, how does one ‘show’ steps taken towards resolving the climate crisis. Measures undertaken take time to show results. Most philanthropists prefer to donate towards schools, hospitals, and mid-day meals, as these outcome can be measured. “I feel those managing philanthropic capital get a bit incentivised to do things that can give them tangible results,” notes Kamath.
Nath points out an expanding range of ongoing philanthropic activity for climate solutions. Foundations effecting a change in this area, including Rohini Nilekani
Philanthropies and Rainmatter Foundation, are working towards helping communities adapt and build resilience to climate change. The $50 million Global Climate Resilience Fund announced by the Clinton Global Initiative in partnership with the Rockefeller Foundation and SEWA aims to address climate risks and inequity.
“We need to inject greater ambition into India’s response to climate change. We need philanthropists to ignite a global call to action for finance from developed countries, technological transfer, and knowledge-sharing, so we can continue developing as we transition to a low-carbon economy,” Nath says.
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(This story appears in the 10 March, 2023 issue of Forbes India. To visit our Archives, click here.)