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A proposal for climate philanthropists
There are ups and downs in the fight against climate change and other issues of our day. Friday was a good day. Reuters UK broke the story that The Hewlett foundation, (update: together with other philanthropists) is planning a whopping $500 million a year fund to fight climate change. Put this in perspective — in 2006 Hewlett distributed only $212 million.
That evening Nobel Peace prize winner Muhammad Yunus spoke at the Commonwealth club, delivering an impassioned and visionary talk on the future of capitalism and how equitable development could be spread with the power of social business entrepreneurs. Even the New York Times’ Nicholas Kristof propelled the energy further with a boldly titled column Age of Ambition with inspiring stories of young entrepreneurs from Davos.
And then Joel Makower’s Monday GreenBiz column brought me back to reality:
The problem, it seems, is that there aren’t enough jobs. At least that’s the finding of a recent study by the nonprofit group Net Impact, which found that the demand for such jobs exceeds the supply. For many reasons, it seems a shame to that these committed individuals aren’t able to find what they’re looking for…..What’s your advice for these souls?
Is this how folk fans felt when Dylan went electric? It seems clear that the energies of the helpful are sidelined by the inability to find a career fighting the issues they care about, or find the capital to pursue their dreams of creating a better world.
Thus a modest proposal to the $9B Hewlett foundation: test the theories of Nobel peace prize winner Muhammad Yunus, and dedicate 10% of your newly
announced planned Climate Fund to social business entrepreneurs. That’s $50 million a year, which I predict would be the best value carbon abatement and capacity building funds ever spent.
Why would this make sense? First of all, if you’re an environmental professional, you have to give Hewlett a ton of credibility for what they support — great policy work all around the world is the result of the smart folks on the Peninsula. And it’s worked for many years.
But climate change is a problem that is weaved together with issues of energy and development — it’s going to take both top down and bottoms up thinking to solve climate change. And that’s where social business entrepreneurs come in.
Climate is about energy, and energy needs capital. And yet, there are many businesses in energy that are solid businesses but unglamorous economic returns with fairly serious carbon returns. In short, the traditional capital markets don’t have the risk appetite for them because returns are unlikely to be huge. But young people, motivated by fixing climate change itself would relish an opportunity to work on such businesses.
These so called social business entrepreneurs could lead a new generation of business that wouldn’t require annual grants, wouldn’t make investor’s socks roll up and down, but would contribute to lowered carbon emissions.
That’s where Hewlett could fit in, placing enough investment in these carbon reducing enterprises to get them sustainable and creating emissions reductions. If they get repaid, great! Put it back into the system. If not, oh, well, how much did we pay per ton of carbon reduced? The measurement of third party benefit for Yunus’ no-loss, no dividend capital model is easily quantified and reported.
If you’re one of the ones job seeking, or struggling with a new green business, know that you provide a tremendous amount of hope. The river of capital, both for non profits and for profits is huge. What we need is people lined up on the banks ready to dip their proverbial cup.
Update: the nice folks at Hewlett called to say the fund is not announced yet, and they are hoping that they, along with other philanthropists, they can reach funding levels of this magnitude in the future. We look forward to an update and applauding things when they are closer to being firm.
Photo available under Creative Commons license from Flickr user Sumaiya Ahmed