Dec 20, 2021
December 9, 2021 - The TCLP hosted a webinar that explored the inter-connected roles that multilateral, philanthropic, and private investment can play in scaling transformational climate action.
Over 80 participants from multilateral institutions, private sector entities, civil society organizations, philanthropic organizations, and country governments participated in the Transformational Change Learning Partnership’s (TCLP) webinar ‘Scaling Climate Finance to Support Transformation: Blending Public, Private, and Philanthropic Investment’. Addressing the climate crisis requires multi-sectoral transformational change that is both innovative and collaborative and leverages different types and sources of funding for rapid, large-scale, action. The TCLP webinar brought together a diverse group of individuals and organizations dedicated to this cause.
Surabi Menon, Vice President of Global Intelligence at ClimateWorks Foundation, was candid with statistics, stating that “Global finance flows are close to $600 billion which means that there is a huge gap and that needs to increase eightfold to reach the $5 trillion target. In other words, compared to the historical rates of where we are, we need to grow 13 times which is a tremendous amount of scaling that needs to be done.” Ekaterina Gratcheva, CIF Lead Finance Officer, made a similar point using the bond market as a reference point.
Michael Robert Ward, The Climate Investment Funds (CIF) Senior Evaluation and Sustainability Specialist, and TCLP co-lead, concurred with these views and further elaborated that, “One of the big challenges in this work is a sense that by ‘transformational’ we mean more money, but we need to shift that conversation to focus on fundamentally changing where the money is being invested and the contributions that it makes to climate neutral, inclusive and sustainable development pathways.” Andrew Gilbert, Partner at Energy Capital Partners (ECP), provided a specific focus for this shift noting that “Driving the flows of capital towards [renewable] energy and investment and away from traditional fossil investment is critical to moving things in a material way.”
During the webinar a panel of experts discussed the challenges that climate finance faces in becoming more mainstream and contributing to transformational change at a scale and speed that addresses the urgency of the climate crisis. Additionally, participants and panelists reviewed the unique roles that public/multilateral, private, and philanthropic finance sources play in the future of climate action.
Surabi Menon spoke about the future of scaled and blended finance and that it depended on, “The carrots and sticks approach – the carrots being how we create an enabling environment for the transition to happen (public engagement, political will, economic case for the transition, making sure that money is deployed for it) and the sticks being accountability, and standardizing data and methodologies to make the finance transition happen faster.”
Bill Weil, Program Strategist at Tempest Advisors, agreed and suggested that, “The essential characteristic of philanthropic capital is risk tolerance. Taking that money and using it to cover the risk portion of a project development life cycle is a way to achieve the goals of blended finance.” Weil also stated that “Philanthropic money can come in at the earliest stage, MDB money at the middle stage and private sector can come in when it reaches maturity. This sequencing effectively achieves a blend without the complication of putting all those monies in the same bucket.”
The concept of scaling climate finance to support transformation is timely and particularly relevant in terms of the work that the TCLP does. The Climate Investment Funds (CIF)-created TCLP brings together over 400 individuals from 150 institutions around the world to develop understanding and support operationalization of transformational change. In this fifth and final event of 2021, TCLP identified a key area where multi-sectoral transformational climate change is possible through different types and sources of funding and posited what it would take to have a future where blended finance truly contributes to at-scale climate action.
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