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Paper short abstract

To ensure an effective, rapid, truly inclusive yet sustainable and measurable climate response, without overhauling well entrenched financial practices, donors shall fund partnerships that incentivise coalitions of international non-profits, local organisations and businesses to act in unison.

Paper long abstract

Based on their experiences in Asia and Sub-Saharan Africa, the authors argue that enabling a just transition requires a different type of financial approach.

Three key changes are essential for donors to strategically enable and support a just transition: (1) funding coalitions of partners instead of individual organisations, (2) financing long-term process change, instead of short- to medium-term projects, (3) supporting agile project management and design, instead of demanding articulated theories of change.

International donors tend to allocate large amounts of capital to defined, short-duration projects in order to create substantial impact quickly. Private-sector investors prefer to invest where rapid revenue expansion is possible. Yet for the transition to be truly effective, inclusive and sustainable, financing needs to target coalitions comprising of international non-profits (which can receive relatively large amounts of capital), private companies (which can provide access to markets and technologies) and local community organisations (which can effectively implement context-appropriate actions and use capital efficiently).

Supporting the right types of organisations is particularly key. Several case studies and best practices show how local community organisations protect the poor and vulnerable, ensuring that (a) they are not sacrificed in the transition and (b) they are empowered to become change agents, driving the transition. Local organisations play a particularly important role in empowering women and other vulnerable social groups. They are often managed by women and tailor activities to ensure women’s involvement in the transition process. While their financing needs are small, they are chronically underfunded due to two structural challenges.