Raise Green Podcast Episode #6: Philanthropy, Capital Markets, and Environmental Justice with Margot Brandenburg
The overlap between philanthropy, capital markets, and environmental justice may seem complicated and unclear to most, but that’s not the case for Margot Brandenburg. Currently a Senior Program Officer at the Ford Foundation, Margot is focused on strengthening capital markets in relation to impact investing. She joins our co-founders Franz Hochstrasser and Matt Moroney on the sixth episode of the “Raise Green” podcast. “Raise Green” is a podcast series exploring the climate crisis through the minds of local leaders and global experts. Listen to the approximately 30-minute Episode here on Spotify.
Having authored “The Power of Impact Investing: Putting Markets to Work for Profit and Global Good,” Margot has an expert understanding of the need for climate action through impact investing. She starts by explaining the role of, specifically, institutional investors in climate change. In sum, the role is to efficiently provide financial resources to support our transition to low carbon and resilient future such as faster carbonization, funding research and development of climate solutions, and pricing externalities. At a larger scale, it would mean ensuring a redundant economic infrastructure able to bear shocks, as well as looking beyond individual companies through capital and supply chains and impact.
Margot emphasizes the importance of acknowledging that certain actions can only be taken at the governmental and philanthropic level -- philanthropy often carrying the heavier burden here -- such as funding public goods, arts and culture, and protecting human and voting rights. However, with increasingly strained public resources and limits of philanthropic impact, there is a great need for philanthropy to engage the private sector as a means of greater impact through investments. This can be done through philanthropists investing early in products and companies, financing new models, and de-risking investment structures. There are a number of ways in which philanthropy and investment capital overlap and intertwine, and it’s vital that we take advantage of those commonalities and put them to use in climate action.
Margot goes on to highlight the need for policy and advocacy in the realm of impact investing to level the playing field for companies and projects actively investing. For example, oftentimes in assessing a company’s assets and capital, eyes are drawn mainly towards “the 5%,” as Margot calls it. This 5% refers to the assets in a company’s portfolio that are committed to philanthropic causes, but what about the other 95% being deployed into other investments? For now, most companies shy away from allowing full visibility into the majority of their assets, but there is a need for greater transparency, regulation, and accountability for more than just the 5% of philanthropic assets in a companies portfolio.
With such a great need for regulation and policy change, Margot explains that she is optimistic that there will be great progress in climate action throughout the next four years under the Biden Administration. With recent commitments made by the administration, there seems to be some hope, but there’s a long way to go and actions speak far louder than words. Margot stays optimistic as she sees more and more companies committing to net-zero but hopes and expects to see continued growth in the amount and size of those commitments.
Climate change is happening now and happening fast and it is imperative that action is taken and impact investing is key to moving forward. Margot hopes to see continued progress in this realm on all levels from increased levels of impact investments on the private levels to policy change and reform from the government, but more importantly, acknowledgment and respect for climate change and the need for action.
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