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Our top tips on how philanthropy can save the planet – an interview with our Global Head of Philanthropy, Dr Maximillian Martin
The environment concerns us all. And yet, philanthropy has traditionally focused on causes that, at least at first glance, have a more direct impact on human wellbeing. We spoke to Dr Maximilian Martin, Global Head of Philanthropy at Lombard Odier, about why he believes philanthropists need to systematically address environmental issues in their work.
To date, less than 1% of financial grants awarded by European foundations have gone to projects or organisations dedicated to protecting the environment. Why is that?
According to 2016 figures from 87 major European foundations, at the time only EUR 583 million was allocated to environmental projects. However, these awards were also growing by almost 10% per annum, a trend that is likely to have intensified further. Traditionally, though, most philanthropic giving benefits programmes that focus on social affairs, education or healthcare. In other words, the emphasis is on having a direct impact on human beings. But this ignores the fact that human life is affected by our environment, which is itself at risk.
Shouldn’t we ensure that everyone’s basic needs, such as food, healthcare and education, are met before moving on to environmental issues?
We need to do both. Because, in many cases, basic needs are contingent on environmental issues. For example, the latest United Nations Environment Programme (UNEP) report notes that we can expect global temperatures to rise by an average of 3.2 degrees Celsius by 2100, even if we implement all of the Paris Agreement commitments. If temperatures were to rise by 4 degrees, the tropics would become almost uninhabitable. So, if we fail to bring global warming under control, there is a risk of great hardship.
Elsewhere, changes in the way land is used, including deforestation and alterations to natural habitats, bring wild animals, farm animals and humans into closer proximity. This has consequences. Although the precise origins of the novel coronavirus remain unknown, what we do know is that this kind of proximity creates opportunities for the transmission of infectious diseases from animals to humans. Such opportunities are thought to be responsible for almost half of all new infectious diseases.
Can foundations really create meaningful change?
Their impact is felt directly. Just think of the European Climate Foundation: its work in supporting targeted research and coaching NGOs that participated in the Paris talks is believed to have played a pivotal role in delivering the Paris Agreement.
Funds from environmental foundations have also made it possible to protect large areas from destruction. For instance, The Nature Conservancy, an NGO, is protecting the coasts of Seychelles via blue bonds, a funding instrument designed to protect marine environments and the economies that depend on them. For its part, the WWF uses philanthropic grants for projects including the protection of sturgeons in the Danube, which is one of their last remaining habitats in Europe. Neither markets nor governments can go it alone here—civil society needs to be part of these efforts.
Earlier, you mentioned that one traditional focus area for philanthropy is education. How can philanthropists working in this area also contribute to the protection of our environment?
Raising awareness can also be the purpose of a foundation. The Swiss Silviva foundation, for example, works to bring children closer to nature by seeking to move more schooling outdoors and investing in teacher training and research. Ultimately, teaching children about the environment should be just as much a part of basic learning as literacy and numeracy.
What is the role of the financial sector in protecting the environment?
Financial institutions have a significant impact on the environment through their investments. It is encouraging to note that returns and sustainability aren’t mutually exclusive. Indeed, we at Lombard Odier are convinced that sustainable investments are actually more likely to deliver returns. After all, if global temperatures were to increase by more than 2 degrees, many of today’s business models would become unworkable. This is why all our products now factor in sustainability. As far as philanthropy is concerned, this means that financial investments directly support the environmental goals of foundations.
Last summer, Lombard Odier published the Donor’s Guide to the Environment in partnership with the WWF. What kind of donor is the guide for?
Our Guide is for all kinds of donors, from those looking to donate a hundred Swiss francs to philanthropists who want to set up their own foundation. Readers will find information about many fantastic organisations and projects that are making a difference. Of course, the Guide is intended to be particularly relevant to our clients. It offers an in-depth insight into the subject matter and cites case studies that highlight specific ways we can protect our freshwaters, oceans and forests.
Protecting polar bears in the Arctic is one such example. But if global temperatures were to rise by 4 degrees, wouldn’t polar bears be the least of our worries?
When choosing goals, it is important to remember that philanthropy is also about passion. Philanthropists have earned or inherited a fortune, and they want to use their money for the greater good. So, what the donor feels passionately about, be it polar bears or the Mediterranean, will significantly influence what they want to achieve. Rather than presenting an exhaustive catalogue of projects, we intended our Donor’s Guide to the Environment to inspire philanthropists by showcasing a selection of possible approaches. Ultimately, our message is that the environment is worthy of far greater attention than it currently receives in philanthropy. And as advisors, our role is to help philanthropists make a difference to the issues they care about most.
Statistic source: https://ec.europa.eu/jrc/en/science-update/wwf-living-planet-report-2020-reveals-68-drop-wildlife-populations
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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