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Environmental Funding in Europe: A Drop in the (Rising) Ocean

Date: February 8, 2024

Sevda Kilicalp

Head of Research and Knowledge Development, Philea (Philanthropy Europe Association)

Giulia Lombardi

Senior Program Manager – Climate Collaborations, Philea (Philanthropy Europe Association)

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The stakes are higher than ever in European environmental conservation. In May last year, Philea (Philanthropy Europe Association), a network of philanthropic funders and infrastructure organizations in Europe, put the spotlight on the critical role of financial support in this vital area with the report, “Environmental Funding by European Foundations: Vol. 6.’’ The report offers an illuminating analysis into the financial currents shaping Europe’s environmental initiatives.

The European Environmental Funders Group1 (EEFG) mapping done by the report is a unique exercise in Europe, where it empowers the European philanthropic sector by supporting informed decisions and evidence-based grantmaking strategies. This in turn helps ensure that resources are channelled effectively towards addressing pressing environmental challenges, and thus maximizing their impact. This short analysis explores the report’s key findings, providing an examination of the trends, triumphs, and trials defining environmental funding.

The Growth of Environmental Grantmaking

One of the central questions addressed by this research is whether overall funding for environmental causes in Europe is on the rise. The data clearly shows that it is indeed growing, albeit from a relatively low base. In 2021, 126 foundations allocated 8,518 grants, totalling a remarkable 1.6 billion Euros for environmental work. This figure represents more than double the value of grants analysed in the previous edition of the research and reflects a greater trend of increased funding towards environmental issues as well as, to a lesser extent, an increase in the quantity of foundations providing this funding.

However, it is essential to put this growth in perspective. Environmental grantmaking still constitutes only a tiny fraction (5 percent) of European foundation giving. Moreover, while climate change mitigation funding has more than tripled globally since 2015, climate funding represents a mere 2 percent of global philanthropy. This raises concerns about the sufficiency of funding to address the pressing environmental challenges we face.

Climate Funding: Collaboration Across Issues

The research also underscores a considerable level of sophistication in climate funding, with a number of collaborative platforms that are working on different aspects of climate mitigation. More than 700 foundations are signatories of one of the philanthropy commitments on climate change, indicating a highly focused perception of climate issues in individual areas. Approaching the climate crisis in a unified way is essential in tackling such a colossal issue and is something that philanthropy can really excel in.

A look at environmental funding more broadly illustrates this need. Compared to climate change, other areas of environmental philanthropy (like biodiversity conservation, water management, pollution reduction, etc.) have less developed support structures. Given the interconnected nature of environmental issues and climate change, the importance of a strong support system for effective philanthropic action across these issue areas is self-evident. EEFG works to build more a supportive ecosystem, encourage more funding, and develop strategic initiatives in environmental philanthropy in addition to climate adaptation.

Slowing Down and Warming Up

While, as mentioned before, there is a marked increase in giving on climate issues, the growth does seem to be slowing down (fairly significantly). ClimateWorks’ recent report on 2022 climate mitigation funding reported only 12 percent growth in 2022 (considerably lower than previous years) and a 20 percent decrease in terms of grant commitments. In other words, despite the overall growth, there’s an indication that the rate of increase in funding is slackening. This slowdown could signal a change in donor priorities, economic constraints, or a shift in focus to other areas of environmental work. Funders should not treat climate funding as a fleeting trend. A short-term commitment would only undermine the sustained effort needed to effectively tackle these challenges.

Zooming out, 2023 was 1.48°C warmer than the pre-industrial average — the warmest year on record. Despite efforts to avoid this, it is clear that the level of funding required to make appropriate changes, such as decarbonising our economies and protecting biodiversity, is far too low. Meanwhile, the profits of just five fossil fuel companies are 100 times larger than the value of the grants tracked in this research. The lucrative nature of the fossil-fuel industry highlights just how steep the uphill battle to fight climate change really is. This is another reason why we can’t lose the momentum now and have to channel persistent, long-term investment to climate adaptation and environmental protection.

Geographic Distribution and Challenges

Despite the international nature of many environmental challenges, nearly half of the foundations in the study primarily fund projects within their home countries. While this domestic focus aligns with certain mandates and legal requirements, it underscores the need for stronger support for environmental organisations in regions with fewer resources. Environmental challenges often transcend national borders, necessitating collective responses.

The data also reveals a stark imbalance in grant distribution, with Northern and Western Europe receiving significantly more funding per capita. These regions are already leaders in environmental policy, raising questions about the equitable allocation of resources to address pressing global challenges. Therefore, collaboration should be viewed as a key requirement in fighting climate change, as it affects the planet as a whole, albeit to varying degrees.

A Need for More Risk-Taking

Foundation values play a pivotal role in shaping grantmaking strategies. The research categorises grants based on different environmental discourses, distinguishing between mainstream and radical approaches. Two thirds of the grants align with mainstream discourses, with only 3.6 percent supporting more radical, system-changing initiatives.

This disparity raises questions about the willingness of funders to take risks and support transformative change. While funding for ”environmental education” is substantial, there is a notable dearth of support for “activism” and initiatives seeking profound changes to the status quo. Challenges such as over-consumption, new economic models, degrowth, and aviation remain inadequately funded, indicating a greater need for support for innovative solutions.

An Invitation for Global Engagement and Movement-Building

The data provided by “Environmental Funding by European Foundations: Vol. 6” serves as a call to action for both funders and broader society to collectively address the pressing environmental crises we face. Here we point to the following key observations from the mapping to spur not only discussion, but action as well.

To address environmental challenges effectively, philanthropic capital must be directed where it is most needed, considering the global impact of greenhouse gas emissions. Intermediaries can facilitate global engagement, ensuring that funding reaches areas with the greatest environmental impact. Environmental movements can be likened to orchestras or jazz bands, requiring support and coordination to have the greatest effect.

The data presented in this research highlights the urgency of philanthropic action in the face of a climate emergency and future mass extinction event. Philanthropy possesses unique qualities that enable it to disrupt the status quo and drive meaningful change. It is no longer a time for incremental measures; rather, it is a moment to address the most challenging political and environmental issues head-on.

While the growth of environmental grantmaking in Europe is promising, it is essential to critically examine the allocation, focus, and diversity of funding. Environmental challenges transcend borders, demand diverse approaches, and require a concerted global effort. Philanthropy’s unique role in addressing urgent environmental issues must be harnessed to its full potential if we are to avoid reaching a point of no return with the climate crisis.

Sevda Kilicalp, Ph.D., is head of research and knowledge development at Philea. Giulia Lombardi is senior program manager — climate collaborations at Philea.

  1. EEFG is a network of philanthropic funders active or interested in the field of environment. The EEFG, which operates under the umbrella of Philea, is conceived as a knowledge hub where funders can connect with peers working or willing to work in the same thematic areas. ↩︎

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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