Inside the innovation lab solving climate financing

There is a substantial argument for increased involvement of private companies in venture philanthropy. Unlike large government bodies and NGOs, private companies are more nimble and experienced when it comes to strategies in marketing, R&D, creating pricing structures, and adapting to rapid social change. Three companies in India are seeing real results by serving India's poorest customers with a market-based approach.

The government wants more farmers turning waste methane into biogas to help combat the negative effects of global climate change. California is leading the initiative, largely through a cap-and-trade program.

Initiatives set up by NGOs and private-public partnerships aim to make innovation possible around the world and support sustainability entrepreneurs in countries that often don’t have access to those opportunities. The European Institute of Innovation and Technology set up the ClimateLaunchpad competition to provide entrepreneurship coaching and training to clean-tech finalists and the Uplink global platform from the World Economic Forum brings innovators and investors together to support sustainability ideas.

The burning of coal for fuel is one of the world's largest contributors to CO2 emissions, and continues to worsen the detrimental effects of planetary warming. But while many feel hopeless in light of an administration that denies climate change and the billion-dollar companies that continue full steam ahead with mining and burning coal, a few clever individuals present a simple and straightforward solution: buy up the coal while it's still in the ground, and pay the government to keep it there.

The Perinjanam Solar Initiative successfully combined government subsidies, cooperative bank financing, and a community-governed consumer committee to bring rooftop solar to over 1,000 households. Altogether, this cut monthly electricity bills by up to 80% and reduced carbon emissions by 192,000 kilograms, however such initiatives have failed elsewhere in Kerala due to the absence of government mandates, standardized financing frameworks, and the political will needed to scale the model statewide.

The Nusantra Fund provides financial support directly to community-led projects in Indonesia. The aim is to improve the livelihoods of Indigenous and local people while tackling climate change impacts and protecting biodiversity.

Prime Coalition is financing clean tech startups and climate-focused technologies that often don’t get a lot of funding. These technologies can be expensive to build and don’t generate profits immediately. So far, the public charity has secured $89 million that it has given into 18 energy ventures. “What’s important here is that the climate crisis is such a large-scale problem that we need lots of different types of solutions,” says Sarah Kearney, founder of Prime Coalition, “and so we need to match up right-fit capital to each kind of solution.”

Philanthropies are funding “tough tech” startups that are developing technologies to cut greenhouse gas emissions and mitigate the effects of climate change. Since 2014, the nonprofit Prime Coalition has channeled more than $24 million from wealthy donors and foundations to 10 ventures focused on that goal. Not all of their investments, though, have paid off. Yet, some of these initial investments could lead to widespread solutions to the world’s climate crisis.

Climeworks, a Swiss start-up, is using technology to suck carbon out of the air and turning it into stone, essentially cutting greenhouse gas emissions from the atmosphere permanently. Their plant in Iceland is able to turn 50 tonnes of carbon to stone per year. While that amount of carbon won’t solve the climate crisis, they are expanding their work to other countries and are launching a personal carbon removal subscription service as a way for the travel industry to help offset the carbon that they emit each year.

Real estate cooperatives are able to raise capital from their members, ensuring re-investment in the communitie they serve. In Oakland, California, the East Bay Permanent Real Estate Cooperative (EB PREC) finances real estate acquisitions through California’s cooperative ownership model. EB PREC also works with partners from the Sustainable Economies Law Center and the People of Color Housing Network, which provide additional resources and expertise.