Catalysing impact 

Impact investor Suzanne Biegel says it’s time for philanthropists to step up on climate finance 

According to the latest reports from the Intergovernmental Panel on Climate Change (IPCC), the world needs to increase green investment by three to six times current levels in order to limit global temperature rises to 1.5 degrees and avert runaway, catastrophic climate change.

That’s more than all the grantmaking and public sector money in the world can achieve by itself. To reach this scale of investment, we need to address the flow of capital across the entire global finance system away from fossil fuels and towards effective climate solutions, biodiversity, nature, and a just transition.

Philanthropists may not be able to fill that funding gap alone, but there is a lot they can do to power this transformation with capital investment.

One way is to fund research and development solutions that aren’t yet commercially viable. Another is as providers of first-loss capital that incentivises commercial investment in impact-first vehicles.

They can also act as sources of expert knowledge that can use their strength as investors to make sure that capital is deployed in the places and ways it will be most useful.

These uses of philanthropic capital, I believe, are as powerful a force for systemic change as the more typical philanthropic investments in grassroots organising, advocacy, and policy work.

I have been giving and investing along the themes of sustainability and gender for more than 20 years. Over that time, I have observed that while the role of women as grassroots organisers and policy influencers in the climate space is well understood, there is less recognition of the role women play as entrepreneurs and solution makers.

According to Crunchbase, women founders received just 6.9 per cent of venture dollars in climate tech in Q1 2023, a statistic that is due less to a lack of women climate entrepreneurs than to unconscious bias.

Four years ago, I created a working group of investors working at the intersection of gender and climate to address these inequities, through my then-organisation GenderSmart (which merged with 2X Collaborative at the end of 2022 to become 2X Global).

Our goal was to build the case for investing at the intersection of gender and climate, and to amplify the growing number of forward-thinking vehicles across all asset classes that are combining gender to enhance their impact and returns.

Over that time, we produced a series of influential papers on how gender is material to climate investment, how the investment intersection is playing out in developed and emerging markets, and how to invest in a way that centres frontline and underserved communities.

“The world only has a few years left to prevent the worst impacts of climate change.”

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Devastating wildfires in Europe, North America, and Australia are bringing the impacts of climate change closer to home for many of the world's wealthy. Will they step up to fund initiatives to mitigate further temperature rises? Photo: Shutterstock.

In the summer of 2021, I was diagnosed with stage 4 metastatic lung cancer. In December 2022 I had a stroke, and over the last six months in particular, my health has been especially fragile.

As I have reflected on the impact I want to have before my time on this planet comes to an end, I made the decision to create a philanthropic endowment that would invest in funds at the intersection of climate and gender.

Heading for Change was launched in April 2023 with US$1million of my own capital. In less than three months, it has grown to $3m through the support of a mix of institutional and individual donors, with more donor-partners continuing to sign on.

Over the past four months, my team and I have narrowed a long list of more than 100 funds to a short list of 25 that meet a series of key climate and gender criteria. Later this summer, we will make our first series of investments in climate funds that centre women as agents of change, and which are investing in solutions that align with Project Drawdown and the IPCC’s key priority areas.

Our strategy is threefold. At the first level, our investments will contribute a small part to the mass deployment of private capital necessary to address the climate crisis. By investing in gender-smart climate fund managers – and the innovators they back – we will be helping vital climate solutions get to market, scale, and effect change.

But we also want our investments to catalyse other capital: both by providing market proof of the value and viability of gender-smart climate solutions, and by providing investors and philanthropists who are already excited about climate and gender with a road map to invest in a way that is in alignment with their values and the science.

Our hope is that our investments will serve as a demonstration portfolio of what best-in-class investing at the intersection of climate and gender with a blended impact and financial return profile looks like.

Finally, knowing that one of the biggest blocks philanthropists who want to deepen their practice of impact investing face is a lack of information and networks, we will be connecting our donor-partners with each other and with our investees, to learn from each other and form a community of mutual support and action.

“You don’t need to have billions to deploy for your money to make an impact.”

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Women founders are not getting a fair share of climate tech venture funding. Photo: Shutterstock

The world only has a few years left to prevent the worst impacts of climate change, and trillions of dollars in capital to deploy to get there. The capital needs to be moved fast, and it needs to be moved intelligently – to the places where it will have the greatest impact.

An investment strategy that continues to miss out on the insights and innovations of 50 per cent of the population is one that risks both missing out on vital ideas, and risks investing in ideas that won’t meet the needs of the populations they serve.

But you don’t need to have billions to deploy for your money to make an impact: millions have the power to trigger trillions.

A relatively small amount of philanthropic and public sector capital has the power to catalyse much larger amounts of private capital if we can demonstrate that the products are there, that they solve the problems the world needs to address, and that they are commercially viable.

The capital we need is out there, but we’re not connecting the dots as well as we need to be. Philanthropists can see that. It’s why we invest in advocacy, policy, and grassroots action. And it’s why we also need to be using our capital to catalyse markets with positive impact.

The investment world needs more philanthropists – not just for the capital we can provide, but for our subject matter knowledge, conviction, and ability to cast a critical eye on what solutions will have the most impact, and which are just window dressing.

If you have capital that has been sitting on the sidelines, now is the time to move it. - PA