Corporate climate action: our climate change fund

The pressure on companies to develop ambitious climate strategies - and above all to implement them effectively - is growing. This expectation is now coming from many directions - from employees, investors, customers, civil society, other companies, governments, etc. At the same time, to avoid “greenwashing,” climate strategies are increasingly being scrutinized for their credibility and compliance with strict standards, for example by a group of UN experts. As a result, more and more companies are looking for solutions that go beyond conventional approaches to achieve and demonstrate real climate impact. Our Giving Fund: Mitigating Climate Change offers an effective approach.

Traditional approaches to a climate strategy often fall short

The classic approach to a climate strategy generally consists of a company taking stock of its own direct and indirect emissions (“Scope 1” and “Scope 2” emissions) and the emissions along the value chain (“Scope 3”) and committing to reduction measures, increasingly linked to the goal of achieving “net zero” in the medium term.

As these reduction measures are generally not sufficient, many companies take the next step and commit to purchasing voluntary carbon credits. The aim of “offsetting” their remaining emissions is to enable them to label individual products or activities as “climate neutral”. However, the compensation measures or “carbon offsets” offered and implemented for this purpose are regularly criticized, most recently in an extensive joint investigation by newspapers DIE ZEIT and The Guardian.. (We at Effektiv Spenden also take a critical view of compensation measures). The main criticism is that offsetting reduces the pressure to take action to reduce emissions, and that the quality and actual impact of the certificates is often questionable, so that it is uncertain whether CO2 savings are actually achieved.

In a joint 2020 report, the Boston Consulting Group and the WWF called on companies to support a broad range of climate protection measures to address their remaining CO2 emissions. Similarly, the Science Based Target Initiative (SBTi), which offers some of the most rigorous standards for net-zero targets, states that “companies should go further and invest in mitigation outside their value chains now to contribute towards reaching societal net-zero”. Giving Green, an organization providing guidance for individuals and businesses to make more effective climate giving decisions, encourages companies “to move away from immediate net-zero goals and instead develop a meaningful business climate strategy that truly maximizes climate impact. Instead of offsetting the past, companies should focus on decarbonizing the future.”

”Climate Action” fund as a complementary approach

Some companies have already begun to address broader aspects of climate mitigation with new approaches. These include, in particular, climate action funds, which provide funding for a range of climate protection initiatives. For example, we are already working with a financial services provider on effective donations.

The Climate Action Fund approach builds on and sustains best practice. It requires companies to measure and disclose their emissions according to internationally recognized standards. Companies should then reduce emissions in line with the Paris Agreement targets, covering both their own emissions and those within their value chain.

However, instead of relying on compensatory measures and carbon offsets, the remaining emissions will be subject to an internal CO2 price. The resulting funds are then used to support climate change initiatives that support social and economic transformation. This includes initiatives that may not generate quantifiable emissions reductions or credits in the short term, but which could have a transformative effect that goes well beyond the impact of individual carbon credits.

Our Giving Fund: Mitigating Climate Change is designed to do just that. It contains a portfolio of highly effective giving opportunities. We decide how to allocate funds on a semi-annual basis to be flexible and responsive to the needs of the organizations we support. We dynamically update the portfolio based on the latest insights and funding needs of the most effective climate change organizations.

Effektiv Spenden is part of 1% for the Planet

“1% for the Planet” (One Percent for the Planet) is a global network of committed companies that pledge to donate one percent of their turnover to climate action and environmental protection. In concrete terms, this means that participating companies donate one percent of their gross annual turnover to climate and environmental organizations approved by 1% for the Planet.

As Environmental Partner of 1% for the Planet, all donations through Effektiv Spenden to our recommended high-impact charities in the area of “Mitigating climate change” or to our “Giving Fund: Mitigating Climate Change” are eligible.

About the author

Sebastian Schienle

Founder & Former Head of Research

I was a co-founder of effektiv-spenden.org and headed up the research department there until 2024. I have been professionally involved in effective climate protection and sustainability for over 15 years, including in my roles as a management consultant and for a family foundation.