Priya Patel
TLDR:
Key Points:
- The planet is facing severe impacts of climate change and needs $4 trillion in annual funding to limit global warming to 1.5°C.
- Companies can play a critical role by strategically deploying multiple forms of capital for climate action.
In a guest post on ESG Today, Claudine Emeott and Naomi Morenzoni discuss how companies can unlock the full potential of corporate finance for climate action. The article highlights the need for $4 trillion in annual funding to address climate change and stresses the importance of companies leveraging their capital stack for climate solutions. By developing a blueprint for coordinated climate finance, companies can maximize their impact and drive progress towards their climate goals.
The authors emphasize two key lessons for companies looking to optimize their capital stack for climate action. First, each financial tool has its own strengths and should be used strategically. Philanthropy is catalytic and best for early-stage initiatives, while venture capital is suited for high-risk, high-reward opportunities. Companies can benefit from deploying both forms of capital in tandem. Secondly, a coordinated climate finance strategy can maximize impact by blending different forms of capital together. By leveraging philanthropic grants, venture investments, and other financial tools, companies can drive progress towards climate goals at the speed and scale required.
The article provides examples of companies like Salesforce and Cisco Foundation, who have successfully implemented coordinated climate finance models to drive maximum impact. These companies have set ambitious climate finance goals, invested in innovative solutions, and partnered with industry leaders to build and refine markets for climate finance tools. By unlocking the full spectrum of capital for climate action, companies can make a significant impact in meeting global climate targets and driving real change.
