How high net worth individuals can support climate action

Mark Suzman, CEO of the Bill & Melinda Gates Foundation released his annual letter with a call to the wealthiest individuals to both give more and focus more of what they do give on meaningful and important causes in addition to favored recipients such as elite universities and cultural institutions. He writes: "Globally, the net worth of the world’s 2,640 billionaires is at least $12.2 trillion. With $1 billion, philanthropists could fund a set of high-impact, low-cost interventions that could save the lives of two million additional mothers and babies by 2030. With $4 billion, they could help a half-billion smallholder farmers become more climate resilient and reduce greenhouse gas emissions from agriculture by 1 gigaton a year by 2030. With just over $7 billion, they could get vaccines to 300 million people, preventing at least 7 million deaths. If every billionaire on earth donated 0.5% of their wealth, it would unlock $61 billion dollars—enough to cover all the above and still have $49 billion left over." Much has been written about the concentration in giving. That concentration makes it all the more important that large donors understand and focus on the areas of greatest need.

How can individuals power investment in climate-beneficial regenerative food and agricultural transition using their donor-advised funds (DAFs)? Following a strategic approach to philanthropic investing that targets funding climate, farming, and food solutions will provide the capital desperately required to invest, fill gaps, and nourish the risk-takers committed to regenerative system change. Here are the steps individuals can take: 1. Align Investment Goals with Climate Objectives: Individuals can start by integrating climate goals into their liquid, diversified, publicly traded portfolios. This can involve divesting from fossil fuel companies, investing in companies with solid climate practices, and engaging with companies to advocate for better environmental policies[1]. 2. Build Climate Solutions: Donors can directly develop and deploy climate solutions through private investments that target at or below-market-rate returns. This includes investing in climate-resilient infrastructure, agriculture technology, sustainable forestry, and other areas that contribute to mitigating climate change[1]. 3. Catalyze High-Impact Projects: For those looking to make a significant impact, DAFs can fund high-risk or lower-return projects that may not attract traditional investment but are crucial for climate action. [1]. 4. Recommend Grants to Nonprofits: DAF holders can designate gifts to nonprofit organizations working on climate solutions. This allows them to contribute directly to the fight against climate change by supporting initiatives that restore ecosystems, develop carbon capture technologies, and address social inequities related to climate change[1]. 5. Utilize DAFs for Environmental Nonprofits: By researching and selecting vetted environmental nonprofits, individuals can ensure their DAF contributions effectively support their intended causes. It's important to distribute funds from DAFs regularly to these organizations to maximize impact[4]. 6. Leverage DAFs for Immediate Tax Benefits: Contributions to DAFs are tax-deductible, and individuals can take an immediate tax deduction while deciding on the distribution of funds later. The funds can also be invested to grow tax-free until they are granted out[6]. By using these strategies, individuals can use their DAFs as a powerful tool for climate philanthropy, directing their charitable capital towards impactful climate action initiatives. Citations: [1] https://lnkd.in/g8HVdF58 [4] https://lnkd.in/g7Jksx9N [6] https://lnkd.in/gYemzg5H

If we care about protecting our planet, where should we invest our money? The reality is that 99% of us are pretty limited in the impact we’re able to make—because the most promising climate-tech companies aren’t yet publicly listed. But many of them do really need our help. It will take trillions in new capital—spread across areas including renewables, electrification, efficiency, and circularity—to enable us to reach Net Zero by 2050.   Many institutional investors are doing their part. CalPERS and CPP, for example, are putting $100B or more into sustainable investments. Climate-focused funds and VC offerings are growing ~40% annually.   But to drive change we need all of us—including individual investors. That’s why I was thrilled to sit down recently with my good friend Saskia Bruysten, a BCG alum and cofounder of Yunus Social Business, who is now using her strong industry expertise to successively democratize climate tech investing.   As Partner and Cofounder International at Carbon Equity, Saskia is driving a new kind of climate investment—giving individuals access to curated portfolios of climate-focused private equity funds, including VC, growth, and infrastructure - allowing them to become co-owners of the climate innovation movement.   As Saskia says, there’s currently around $177 trillion in the pockets of the “mass affluent” and high net worth individuals. By engaging the long tail of that largely untapped investment capital, there’s an opportunity to empower people to literally buy into the net-zero future we hope to see.   For now, Carbon Equity’s portfolio funds are currently mainly available to European investors. I can’t wait for their offerings to become fully available in the U.S.   It’s easy to feel powerless in the face of the global climate challenge. But projects like Carbon Equity give many of us a compelling way to do our part—and to help support the broad groundswell of innovation and momentum that’s needed to drive sustained, large-scale climate action. Check out the video of my chat with Saskia below.