The innovative Carbon for Water programme unlocked private sector finance to deliver safe water to 4.5 million people a year.
Photo Credit: Kate Holt
By Edward Hanrahan, Director, ClimateCare
For 15 years, ClimateCare has worked with large blue chip organisations who, having taken steps to reduce carbon emissions and want to address their residual footprint, by funding external emission reduction projects. Our name is synonymous with the highest quality projects that not only cut emissions, but help alleviate poverty and improve health in the world’s least developed countries. As the world moves on, increasingly our customers are looking to fund projects which address both their environmental impacts (usually water and carbon) and proactively improve the communities in which they work, or intend to move into.
For most, this is not philanthropy, it is pragmatic future planning.
Evidence from surveys such as Edelman show that in the powerhouse emerging economies consumers, stakeholders and Governments expect large corporates to take responsibility for negative impacts they create. Increasingly they are also expected to play a substantial role tackling social issues within the markets in which they operate.
One of the biggest challenges for business is that, like everything, taking responsibility costs money. In an era of quarter by quarter or even annualised financial returns, it is difficult to justify spend in an area which looks like a one way hit to the balance sheet…
However, making a longer term assessment of the positive returns from risk mitigation and opportunities for new market cultivation, mean that increasingly large corporates are able to justify action as part of an integrated corporate strategy, rather than a discreet CSR or environmental activity.
For example, many businesses experiencing low levels of growth in their home markets are looking to grow in the ‘emerged’ markets like China and Brazil. Longer term strategies include expansion into new areas of high potential growth such as South Asia and increasingly Sub Saharan Africa, where perhaps the prospect of the ‘next China’ is just starting to arise.
This may sound far-fetched, but in the market for essential services – energy, lighting, safe water, infrastructure – the commercial opportunities in Sub Saharan Africa are very real. And of course, once these building blocks are in place, then the market for traditional consumer goods will follow.
Many large Corporates see funding integrated Climate and Development projects as an opportunity to take responsibility for their direct residual environmental impacts, fulfil the social elements of their CSR strategies, and provide the building blocks of expansion into truly emerging markets.
Activities such as these have sometimes drawn a ‘cynical’ response from traditional aid communities, suspicious of ‘intent’. However, there is increasing realisation that harnessing the power of international business for good is essential and that in order to engage business, projects have to deliver some form of return – either financial or indirectly in terms of brand positioning, risk mitigation, access to new markets or simply a ‘social licence to operate’.
So, for Corporates and NGOs who are able to put old prejudices aside, now is the time to work together, creating blended, co-financed funding frameworks that deliver on all parties’ objectives, in an extremely cost efficient, and even profitable manner.
ClimateCare is ideally placed to facilitate, manage and implement innovative financial and partnership solutions that deliver real impacts on the ground and make business sense both now, and over the medium term. For many years we have demonstrated that tackling climate and development related challenges together, through single project interventions, can deliver greater efficiency, unlock new funding and bring synergies. This has allowed us to scale up projects to unprecedented levels and improve the lives of millions of people.
One example, from over 50 projects that ClimateCare has been involved with over the years, is Carbon for Water, a project which is providing safe water to nearly 4.5 million people in Western Kenya. This same project is also empowering women and children, reducing waterborne disease, protecting forests and tackling climate change - in fact as well as saving lives, this is one of the largest carbon reduction projects in the world. The way the project is funded (in this case through carbon finance) means it will continue for at least 10 years, with 6 monthly monitoring and education programmes. It will also provide a return to private sector health experts Vestergaard Frandsen, for their investment into the project.
This might be a new way of doing things in the sustainable development field, but to us, using multiple financial streams and quantifying returns to encourage private sector finance to engage at scale in these types of project, is simply common sense. With the launch of the Green Climate Fund, Governments are increasingly looking to unlock private sector finance for development work. We believe projects like these, that successfully use private sector finance, provide the blueprint for attracting new sources of long term, large-scale funding.
Our extensive track record in project development and risk management, as an independent, as part of an investment bank, and now as a ‘profit for purpose’ independent, means we are ideally placed to work with international governments, NGOs, businesses and investors on projects that deliver climate and development outcomes. Essentially we are turning the concepts of ‘shared value’ into reality, creating new markets and opportunities for the world’s poorest communities - and the companies that wish to serve them.
And the words ‘Working in Partnership’ are key. An integrated project needs an integrated approach and we are always seeking new opportunities to bring partners together – Corporates, NGOs, Social Enterprise, Donors, IFIs…
I’m delighted that Business Fights Poverty has given us this opportunity to spread the word and tap into their network of sustainability professionals. So, whether you are a Corporate looking for the most cost effective way to meet your environmental or development targets or wondering about how you will access ‘cusp’ markets in Sub Saharan Africa, an Investor searching for viable ethical investment opportunities, or an NGO, looking for new sources of income to fund development work, please do get in touch.
Together, we might just help change the world...
ClimateCare is an independent ‘profit for purpose’ organisation committed to tackling climate change, poverty and development issues. Our unique climate and development model funds ground-breaking projects spanning renewable energy, water purification and clean cookstove technology, cutting emissions and transforming millions of lives worldwide. Find out more at www.climatecare.org