After the IPCC Report, What’s Next If You Want to Fund Climate Solutions? Start With Listening to Communities

We have long known that humans are causing climate change, a fact highlighted in this month’s IPCC report. As the world focuses on how to reorient economies away from fossil fuels and toward solutions, there is a welcome, new focus on centering communities in climate solutions. As those with financial resources in the global economy face decisions about how to use those resources in service of climate solutions, from individual investors to global institutions, there is a wealth of learning to be had. 

At Accountability Counsel, we support communities impacted by the climate crisis, and who are often harmed by projects that either exacerbate climate change or aim to provide solutions, but miss their mark. These communities can attest to the perverse impacts top-down climate finance and investment can cause, while also offering a picture of what could have been with a community-centered investment lens. 

In Myanmar, Indigenous people of the Tanintharyi region have climate solutions. In place of a top-down conservation park that risks community displacement and deforestation, they have proposed an Indigenous-led conservation model that both protects the rich biodiversity of the region and respects traditional peoples’ knowledge. In the midst of multiple crises, they have called on the United Nations Development Programme to support their vision and center their voices. 

In Liberia, communities were never asked if a foreign biofuels project would help or hurt. When implemented without this crucial consultation, it resulted in harmful environmental impacts, including deforestation and pollution, and serious human rights abuses, while also destroying families’ agricultural livelihoods and driving them into poverty. 

In Mexico, Chinanteco people in Oaxaca are environmental defenders who are seeking investment into their environmental resources. When a hydroelectric project threatened to contaminate the Arroyo Sal freshwater creek used as a livelihood and cultural resource, they engaged in an historic dialogue process and halted the project to protect their ecosystem, and are now seeking support for their vision of a conservation- and culturally-aligned set of local investment projects.

These communities have demonstrated the need for local people to not only be part of investment design, but the initiators of that design and the managers of investments that impact local resources. They have shown that they are the best positioned to ensure that investments understand local context, opportunities, and challenges, can avoid harm, and achieve intended impact. With the pandemic and climate disasters everywhere, the risks are even greater to local people when they are not included as central voices in solutions. 

As our research shows, communities we have supported in Myanmar, Liberia, and Mexico are not outliers. Increasingly, grassroots and Indigenous movements are calling on investors to examine the power they wield over local communities around the world. As Transform Finance’s Grassroots Community Engaged Investment (GCEI) report recently stated:

What sets [grassroots community engaged investment] projects apart from traditional community development and mission-aligned investment projects is that they involve grassroots stakeholders in the design and governance of that investment. In that way, GCEI is not a field; it is rather a set of practices and processes that can be overlaid to any and all investments in communities. [emphasis added]

Centering grassroots stakeholders in design and governance is happening, but slowly. Less than a year ago, the International Institute for Environment and Development (IIED) reported that just ten percent of climate finance among a selection of funds investigated prioritized locally-led “activities,” a low bar.

Investors who read the IPCC Report’s dire conclusions may be about to double down on their commitment to financing climate solutions — from individuals, to government institutions, to commercial banks, we all should. But as the scale of climate finance increases, so too should a learning from the recent past — partnership with community-led opportunities for renewables, conservation, and biodiversity preservation should be the starting point, at scale, for investment that includes community governance to drive sustainable and accountable climate solutions.