Investment reports

More philanthropic funds focused on climate change are needed: Reports

SINGAPORE – To support green causes and climate action efforts, Mr. David Heng, Managing Director of a private equity fund, established the Mind the Gap 200 – Sustainable Earth fund in 2019.

It’s part of a project Mr Heng, who is in his 50s, has undertaken with nine friends and the Community Foundation of Singapore.

The fund, which supports charities and programs that meet some of the United Nations’ Sustainable Development Goals, is one of the few set up by philanthropists to fight climate change.

The cause attracts less than 2% of philanthropic donations worldwide, according to the global non-governmental organization ClimateWorks Foundation.

A 110-page guide recently published by investment bank UBS seeks to change that by showing donors, philanthropists and investors how to close the climate finance gap, as well as the benefits and impacts of “green philanthropy”.

The report, titled On Thin Ice, includes insights and advice from more than 40 experts in the fields of sustainability and investing.

The report also highlights the importance of prioritizing climate finance, as the dangerous impacts of climate change will affect other priority areas such as children’s health, mental wellbeing, inequality and food security.

“While the need to engage directly in the fight against climate change is now recognised, many of those who might have the means to act do not know how best to use these resources to achieve the greatest impact,” said said Ms. Hannah Wood, one of the report’s authors.

Ms. Wood, program director of UBS Optimus Foundation, added that areas requiring funding include energy transition, agriculture and climate research.

“Investors can consider investing in key sectors such as renewable energy and carbon capture, energy efficiency and smart mobility.”

The switch to renewable energies and the intensification of research are expensive. The International Energy Agency estimates that 70% of clean energy investment over the next decade must come from private investors, consumers and financiers.

Limiting global warming to 1.5 degrees C by 2030 will require an additional US$4 trillion ($5.5 trillion) annually invested in clean energy projects and infrastructure.

Beyond money, philanthropists and investors can also use their influence as shareholders to push for positive environmental change in companies – especially for economically important but polluting companies, added Mrs. Wood.