Who Are The Global Funders of Climate Change?

The United Nations Framework Convention on Climate Change (UNFCCC) Standing Committee on Finance describes a Climate Fund as finance that is aimed at reducing emissions and preserving and improving the resilience of human and ecological systems to negative climate change impacts. These funds are often established by national, regional, and international entities to champion climate-specific projects for mitigation and adaptation activities, creating an enabling environment for the transition towards low-carbon, climate-resilient growth and development through capacity building and economic development.

The United Nations Conference of Parties (COP) is the decision-making body responsible for monitoring and reviewing the implementation of the UNFCCC objectives. The ultimate objective of the COP session is to stabilize greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous human interference with the climate system. The main goal of the Paris Agreement was to keep the global average temperature rise close as possible to 1.5 degrees Celsius above pre-industrial levels and an annual commitment of US$100 billion and four hundred and fifty (450) development banks pledged to fund a “Green recovery” in developing countries.

Global donors of climate change mitigation programs are committed to ensuring socioeconomic, ecological, and other developmental benefits to developing countries, as the investments in climate change outweighs the cost of implementation. International agencies funding climate activities in Africa include;

Governments and intergovernmental organizations: Governments and inter-governmental Organizations like the United Nations are among the most significant funders of climate change action. The total climate finance has increased progressively to US$632 billion in 2019/2020.

Corporations: To achieve a net zero emission campaign, Corporations such as Unilever, and Amazon, are committing resources to develop climate-focused technologies and projects to attain a safe planet. The Net Zero tracker database indicates of over 4,000 corporations in Europe, 1,180 have net-zero targets.

Institutional asset owners and Funds: These are massive stock market movers such as Pension funds, Insurance companies, and Sovereign wealth funds which are committed to climate change mitigation activities. The growing acceptance of Environmental, Social, and Governance (ESG) factors; as these Institutional and Asset managers channel resources toward environmental and social projects.

Banks and other private financial institutions: Financial institutions play a very prominent role as an intermediary of sustainable and green debt instruments as well as a broader trend of setting climate-related targets. As of 2021, about 63 global banks representing US$ 40 trillion in assets joined the Net-Zero Banking Alliance (NZBA), committing their investment and lending portfolios to reach net-zero emissions by 2050.

There is a need for other stakeholders to partake in urgent actions to mitigate climate change impacts and transition to low-carbon emission economy by minimizing greenhouse gas emissions, as well as, providing greater access to clean energy solutions, and a sustainable future.