Climate finance was central to discussions at COP28 in Dubai and funding to reach net-zero and restore biodiversity is still falling short, according to an update shared by the World Economic Forum (WEF).
New research published by WEF 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 – securing the protection of 15 million hectares of mangroves worldwide – 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.
Gim Huay Neo, Managing Director, World Economic Forum, said:
“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. 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 WEF update added that initial investments “demand substantial funding, often beyond the capacity of many individual businesses or governments.”
The report also mentioned that “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 restore nature. Philanthropy, with its nimble and risk-tolerant characteristics, plays a pivotal role in providing early-stage funding, catalysing 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.”
With more than 40 partners, the Mangrove Breakthrough coalition is “mobilizing $50 million-$100 million over the next 10 years to protect and restore mangroves worldwide.”
The WEF report added that “some $2.5 billion in private capital has been pledged to support government initiatives through Initiative 20×20. Gathering 150 partners to reshape land degradation in Latin America and the Caribbean, the collaboration is propelling restoration efforts throughout the area, safeguarding and reviving over 50 million hectares.”
Billions of dollars are being “channeled through the multistakeholder initiative, Energy Transition Accelerator, that fast-tracks the shift to renewable energy sources in developing countries.”
The partnership assists nations in their energy transition strategies “through a voluntary carbon market framework, while at the same time expanding energy access for people in poverty.”
The report’s Analytical framework guides partnerships “based on their materiality, suitability and feasibility, having identified 31 intervention areas where joint action is set to accelerate high, scalable and immediate impact globally addressing 30% of emissions.”
Daniel Pacthod, Global Co-leader, McKinsey Sustainability, said:
“Our research aims to support the creation, sustenance and scaling of these partnerships by exploring where to focus their efforts and how to ensure their success. We hope it gives them the confidence to partner with others for outsized impact and, crucially, save time in forming partnerships, as it’s time that we can scarcely afford to lose.”
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