Rethinking climate change and philanthropy

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By Dr Maximilian Martin

Many of the world’s most pressing challenges are environmental. Around the world, wealthy individuals are engaged in helping solve challenges in areas such as biodiversity and species preservation, clean energy, sustainable agriculture and food systems, coastal and marine ecosystems. The environment is an area where our “rethink everything” approach can add exceptional value to our clients’ endeavours. 

Climate change is changing the cost of capital. By November 2016, 193 members of the United Nations Framework Convention on Climate Change (UNFCCC) signed the 2015 Paris Climate Accord, 103 of which have ratified it. The goal is to keep the increase in the global average temperature to well below 2 °C above pre-industrial levels, and to increase human ability to adapt to its adverse impacts. This has also changed the investment requirements for institutional players (who do not want to be stuck with stranded assets).

With issuance of USD 81 billion in 2016, the green bond market exceeded its 2013 issuance of USD13 billion by more than six times. As our senior managing partner Patrick Odier points out,

the rapid rise of debt capital markets to fund climate solutions shows the speed of mainstreaming of environmental concerns into the core of the global economy.

This is also impacting the world of charities. Tom Rutherford, covering charitable asset management from London remarks, “many of today’s charities are actively seeking to reduce carbon emissions resulting from their investments. When we can propose solutions to help them achieve that goal, our pitches gain the competitive edge.”

Environmentalism has gone global:
It is truly remarkable how far environmentalism has come since the general public first became aware of environmental issues in the 1960s. From protecting animals and a single site, engagement has adopted a global mind-set. Just consider the evolution of a household name such as Greenpeace. What began in 1971 in Canada to oppose nuclear testing in Alaska soon focused on “systemic” issues in areas such as conservation, endangered species, habitat protection and animal welfare. From initial advocacy campaigns centred on protecting particular species such as whales, seals and sea lions, Greenpeace has gone global with offices in over 40 countries, a total income of CHF 350 million, 3,000 staff, and over 15,000 volunteers.

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For a wealthy client, aware that we are now eating into the Earth’s natural capital as pointed out by the Worldwide Fund For Nature (WWF) in its latest Living Planet Report, there are thousands of environmental organisations to choose from. The key questions are to figure out are where and how:

- Does the client have a “local” mind-set? Or does s/he want to participate in “globalised environmentalism” with organisations such as Greenpeace or WWF?

- Is the client passionate about a single issue? Or does s/he want to pursue a portfolio of activities?

- What kind of activities are of interest? Protecting a particular species? Financing a campaign to influence public opinion? Engineering a game-changing stakeholder coalition?

We can help navigate
Clients’ passions can be quite specific.

At Lombard Odier, we can be of valuable support on the structuring and programmatic side of philanthropy , as well as regarding the asset management.

Take a request from a client without heirs. Passionate about the environment and wildlife in particular, she was especially concerned about promoting breeding farm animals in a sound manner and in vitro experiments as an alternative to animal testing.

The Carlo Fund, a sheltered part of Fondation Philanthropia, is endowed with CHF 4 million. Among other projects, it is supporting WWF International to reduce demand in China and Vietnam for products from protected wild animals such as rhino horn and ivory (which are used in traditional Asian medicine and for prestige). Due to a campaign targeting the general public, e-commerce players such as Alibaba and Tencent have removed the products from their offering. Social media sites such as We Chat and Weibo actively inform users to achieve behaviour change. Relationship manager Ikuko Morimoto  summarises: “getting involved in philanthropy through the help of Lombard Odier has been an amazing experience for my client.”

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Great solutions combine creativity and competence

At Lombard Odier, we believe it is important to tap into our creative energies to provide our clients with the solutions they need.

Compared to Greenpeace’s early campaigns for protecting seals and sea lions in the seventies, there are now amazing new possibilities to get involved. Take the climate change television series “Years of Living Dangerously,” executive produced by James Cameron and Arnold Schwarzenegger. Featuring celebrity correspondents such as recently retired late-night host David Letterman, who cover climate stories, it takes campaigning for environmental issues to a completely new level.

As Arnold Schwarzenegger points out, “communicating more effectively about the need to create a clean energy future is my mission and I am honoured to be given the opportunity once again to be a part of this very evocative series.” Without philanthropic support, this television series would not have got off the ground. As the power of technology and innovation keep driving nonlinear change toward a low-carbon economy, it’s an amazing time to support our clients in translating their environmental aspirations into action.

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