Changing the climate for funding support

Enabling CSR backing for nonprofits crafting inclusive solutions in the climate change ecosystem is essential for India’s socioeconomic prosperity

Emerging economies such as India are faced with a challenging dilemma: how do we continue developing while tackling the climate crisis? India is proactively reducing its emissions through ambitious ‘nationally determined contributions’ while investing in green growth, an economic paradigm that embraces the decoupling of emissions and growth. But what about the climate impacts we are already witnessing, or those that will increase in intensity and frequency as the crisis worsens?

Over 75% of India’s districts are vulnerable to climate change-induced extreme weather events (Council on Energy, Environment and Water, 2021) and nearly 5 million Indians were displaced by disasters in just 2021 (United Nations High Commissioner for Refugees, 2022). Floods, droughts, heatwaves, cyclones, and wildfires, among other physical risks, are affecting progress on crucial Sustainable Development Goals relating to education, healthcare, water, nutrition and livelihoods.

The statistics can seem alarming but this isn’t a crisis without hope or without concrete solutions that we can implement. There exists a rich and diverse ecosystem of grassroots changemakers battling the climate crisis. With scarce resources and confronted with multidimensional barriers, nonprofits and vulnerable communities are combining cost-effective responses to localised climate events with traditional approaches to development.

Take the VIKAS Centre for Development, an Ahmedabad-based non-governmental organisation, and its efforts to build a bio-shield along the coast of Gujarat. Comprising multilayer and multi-species plantations, including mangroves, this ‘green wall’ acts as a buffer protecting the economic assets of local communities against cyclones and salinity ingress. The benefits are manifold: the bio-shield contributes to climate change mitigation by acting as a natural carbon sink while integrating livelihood and income opportunities for local communities from the plantations.

A full accounting

Solutions like these take in the multidimensionality of challenges faced by vulnerable communities. They signal the emergence of a more holistic standard for development, one that accounts for different considerations — climate, environment, gender, health, livelihoods and more — while keeping communities at the centre and building resilience to risks.

To ensure their success, these inclusive solutions need trusted funders with an eye on India’s existing development challenges, as well as experience with on-ground development work and building community agency. An important factor, in the context, is corporate social responsibility (CSR).

With more than 1 trillion (100,000 crore) deployed in the social sector since 2014, CSR is deeply intertwined with India’s development ecosystem, making it an obvious ally for nonprofits responding to the climate crisis. Yet most of India’s CSR funders do not fund climate projects. There are a few possible reasons for this.

One, nonprofits often do not have access to the right networks or are unable to communicate the effectiveness of their climate-related work. That means funders have low visibility on what different climate projects look like, which nonprofits are implementing them, and the development co-benefits of these initiatives.

This often manifests in CSR funding being directed towards tried-and-tested projects — large-scale tree plantations and solar projects among them — that may not always have a sound scientific basis and could be ignoring specific ecosystem considerations, thus affecting the long-term sustainability of the effort.

Two, given the period within which CSR funds must be spent, funders prefer short-term projects with well-defined objectives. It can be difficult to allocate funding to climate projects that typically require longer timelines, and for implementing organisations to utilise such funding during the spending period.

Additionally, climate change is not yet identified as a clear category within Schedule VII of the Companies Act, 2013. This prevents funders from increasing their climate spending and may encourage them to, instead, either categorise climate projects in climate-adjacent categories such as ‘environment’, or forego funding climate projects altogether.

Three, we have also heard about funders sometimes not knowing how to identify a good climate programme. For example, climate solutions can be conflated with environmental solutions, including water and waste projects that do not have clear climate impacts.

The fourth possible reason is that funders as well as nonprofits struggle to measure the impacts of climate projects, given the long timelines of such projects and their nascency, and the high costs associated with monitoring and evaluation (M&E) processes. This is amplified by a lack of financial capacity within nonprofits to build internal M&E and communications capacities to capture the impact of their on-ground efforts.

While some of the obstacles faced by CSR funders are matters in the policy realm, others can begin to be addressed by building understanding and connecting funders with nonprofits implementing inclusive solutions. A dedicated climate solutions platform, for instance, can make diverse solutions accessible to funders and bring like-minded partners together to enable increased funding for community-centric climate solutions.

Tools and networks

Apart from mobilising funds, this platform must also look at supplementing capacity building and institutional readiness to tackle the climate crisis. Examples include providing nonprofits with the tools and networks needed to accelerate these solutions, such as support to develop strong M&E frameworks and improve communication of climate impacts.

Crucially, by supporting and enabling easy access to high-impact, people-first climate solutions being implemented by trustworthy organisations, a platform like this can provide an important signalling function for climate action in the development sector. It can ignite a call to action to funders seeking to help scale up India’s homegrown answers to the climate emergency.

Integrating a climate lens into CSR portfolios also has a role to play in how the developing world conceptualises its response to the climate crisis. Integrated solutions provide concrete evidence that we don’t have to choose between acting on the climate crisis and addressing development priorities, that the most vulnerable communities can lead the dialogue on climate-integrated development, and that climate responses need to be bottom-up and account for existing inequalities.

Furthermore, partnerships between nonprofits designing these solutions and CSR funders can lead to superior outcomes and institutionalise climate thinking in remote corners of the country. For these projects to have long-term climate benefits, we need them to be sustainable even after they end. Generating local livelihoods and keeping communities involved from the beginning are key requirements in ensuring this.

To be able to avoid the worst climate risks and to equip communities with the tools and capacity to respond preemptively, CSR funders with development expertise need to lead the conversation on equitable climate action with those at the frontlines of the crisis. We need funders to start thinking climate today, regardless of their current portfolios, to shield India’s socioeconomic story from a warming planet.