Philanthropic giving for climate change mitigation increased by 25 per cent in 2021, according to ClimateWorks Foundation’s annual Funding Trends report. Despite this sharp rise in giving, funding for climate still remains significantly short of need and has not managed to break through the 2 per cent barrier.

Historically, giving for climate change mitigation has never been more than 2 per cent of all philanthropic giving. And despite increases in the amount of funds allocated to climate in recent years, it still remains less than 2 per cent of philanthropy’s total funding.

‘Philanthropy needs to break through the 2 per cent funding barrier if it is to do its part to keep the world aiming for a 1.5° C future,’ said ClimateWorks CEO Helen Mountford. ‘A 25 per cent annual increase in giving is encouraging, but philanthropy needs to accelerate its efforts even more and move funds faster to the places that need them the most to give people and the planet a fighting chance.’

Funding Trends covers global foundation and individual funding data from 2015 to 2021 and the trends shaping philanthropic giving toward climate. In recent years, foundation funding for climate change mitigation has more than tripled, growing from $900 million in 2015 to more than $3 billion in 2021. At the same time, the number of grantees receiving climate change mitigation funding has nearly doubled, from about 1,400 in 2015 to about 2,775 in 2021.

ClimateWorks’ research captures the flow of foundation funding for climate change mitigation across 16 sectors and strategies and for 12 regions. In 2021, the top three sectors to receive funding were clean electricity; forests; and food and agriculture. Those with the fastest funding growth were forests (69 per cent increase) and carbon dioxide removal (62 per cent increase). Additionally, a combined category of governance, diplomacy, and legal was the top-funded enabling strategy.

In 2021, the top regions to receive foundation funding for climate change mitigation were the United States and Canada ($810 million) and Europe ($435 million). Together these represent two-thirds of country or region-specific funding, with the other one-third going to support climate action in all the rest of the world. Latin America saw its funding double between 2020 and 2021, and funding to Africa increased by 50 per cent. Despite these increases, Latin America and Africa combined still represented less than 10 per cent of total foundation funding in 2021.

‘It’s striking how little foundation funding is going toward mitigating climate change in many major emerging countries and regions where emissions are increasing,’ said Surabi Menon, vice president of global intelligence for ClimateWorks and an author of the report. ‘Achieving global climate goals will require that philanthropy both continue to fund climate mitigation strategies of current major emitting countries while also providing much more funding to as many emerging countries as possible to support their low carbon transitions in the years ahead.’

The report also highlights how the growth of climate philanthropy extends beyond increases in total funding dollars and commitments to shifting approaches and strategies, with increased focus on fossil fuel divestment, justice and equity, integrated solutions, and increased collaboration, including with the private sector and governments.

‘ClimateWorks’ Funding Trends report shows how incredibly far philanthropy has come in a few short years,’ said Larry Kramer, president of the William and Flora Hewlett Foundation. ‘But it also reveals how much farther we must go to fully catalyse the transformations needed to mitigate the climate harms already happening and ensure communities around the globe can thrive today and for generations to come.’

Download the Funding Trends 2022 report here.