In late July, finance leaders of the world’s major economies gathered in Rio De Janeiro, Brazil, for the G20 Finance Ministers and Central Bank Governors Meeting. There, they pledged for the first time to cooperate to ensure that the super-rich are effectively taxed: a move that attracted headlines in the global media.
This unprecedented declaration on taxing wealth formed part of a wider discussion on sustainable finance, and demonstrated the need for new answers to the pressing question of how to mobilise funds for sustainable development and climate action. This crucial question will be high on the agenda at November’s G20 summit, in Brazil.
It comes at a time when the world faces multiple crises on several fronts: such as the tragic floods in Brazil’s Rio Grande do Sul earlier this year, which underscored the breadth of the emergency at hand. If we are to stem such crises, bold action is needed: the G20 needs to unlock not just additional finance, but also better finance. This means catalysing higher-risk investments and ensuring the funds reach communities on the frontlines.
Harnessing the potential of philanthropy is an important step towards this. In a welcome acknowledgement of this, the Civil 20 (C20) – the body representing civil society engagement within the G20 – has this year included its first-ever working group dedicated to philanthropy. The C20 Working Group 9 on Philanthropy and Sustainable Development is being chaired by the International Institute for Environment and Development (IIED), alongside global philanthropy network WINGS and Brazilian philanthropy network GIFE.
As co-chairs of this working group, we have convened over 400 organisations to understand how philanthropies contribute to G20 countries’ commitment to improve the multilateral system and sustainable development. This process, together with IIED’s participation in both the F20 Climate Solutions Forum and the C20 Mid-term Meeting, has provided useful insights on the contribution philanthropy can and should make to climate and social justice.
Philanthropy: a diverse sector
The role of philanthropy was highlighted last month at the third meeting of the G20 Sherpas, in Brazil, where C20 representatives presented their proposals for the G20. The C20’s general recommendations included a call on the G20 to “recognise and support the catalytic role of philanthropy to promote sustainable development.” Underpinning this input from our C20 working group was a clear and encouraging objective: philanthropy must go beyond siloed, fragmented programming and support aligned, transformative policy measures.
During our C20 conversations we have been struck by how diverse the philanthropy sector is. Despite being commonly associated with large-scale donors, philanthropy takes many forms, including community and corporate foundations, and networks. These are more than simply providers of funds: they act as powerful facilitators between communities and government authorities, produce ground-breaking knowledge, promote innovative experiences and foster creative partnerships between business, civil society and the public sector.
Importantly, their know-how, political capital and flexibility allow them to take risks, better adapting financing schemes to local communities’ needs and capacities, and to support policy areas that might be overlooked or contentious for traditional actors.
Cross-sector mobilisation
The stakeholders involved in our C20 discussions on philanthropy demonstrated a commitment to improving democratic and inclusive governance, both across society and within their own sectors. Participants didn’t call for philanthropy to replace the public sector, but instead to align its actions with public policies that respond to demands for broader systemic change and inclusive, sustainable development. This, in their eyes, required both broader measures such as international tax cooperation, and a common regulatory framework to guide philanthropic action and ensure transparency of philanthropy itself. Such a framework could give way to more impactful partnerships, mobilising all sectors – both public and private – towards shared goals.
The Brazilian presidency of the G20 has also allowed reflection on the role of philanthropy in the global South, which is often closer to communities most affected by the polycrisis. Participants in the C20 meetings explored how this unique position could enable them to tackle persistent inequalities, such as by supporting wealth taxation, while grappling with their own histories of colonialism and discrimination. They spoke of the need to increase South-South cooperation – including through South Africa’s G20 presidency in 2025 – and to leverage their position as funders, conveners and capacity builders to improve the adequacy and accessibility of financing streams both in the global North and South.
The C20 recommendations to the G20 speak to many of today’s most pressing issues, such as a just transition, international tax cooperation and wealth redistribution, and the imperative to combat the shrinking of civic space. This year’s G20 focus on poverty and hunger, the climate crisis and global governance reform represents a unique opportunity to advance these goals. We have been encouraged by the ambition within the philanthropic sector to be part of these efforts to bring about systemic change and advance equity, justice and sustainability in its own programming.
Issues for further focus
Nevertheless, various areas action require further attention in these multilateral spaces. IIED has been working with Southern partners on a range of issues where the G20 has the potential to drive policy changes that can support global sustainable development. These issues include addressing the debt crisis via innovative debt for climate and nature swaps, and the need for an ambitious replenishment of the International Development Association (IDA), the World Bank’s concessional finance window for the poorest countries.
Housing justice is another crucial topic that is often overlooked: despite speaking to the intersections of climate, inequalities and exclusion, it is nevertheless often absent from conversations. As IIED’s work shows, the predominant housing model in most countries reproduces social and environmental injustices that jeopardise our ability to address the climate crisis, tackle colonial and racist legacies in public policy, and respond to the rising cost of living.
We believe that highlighting alternative, often grassroots-led pathways towards housing justice and urban equality in spaces like the G20 – as well as the forthcoming COP negotiations and UN Summit of the Future – can improve policy coherence and mobilise finance for housing policy efforts that prioritise people and nature over profit.
Ultimately, whether we’re addressing housing or hunger, conflict or climate change, the road to sustainable finance requires a holistic approach – one where inclusive, ongoing engagement is paramount, and where both traditional and new actors come together with a shared mission that can deliver meaningful change.
The process of co-chairing the C20 Working Group on Philanthropy for Sustainable Development has been an insightful experience and has shown there is appetite for more effective partnerships across sectors, both private and public. We can only hope that the G20 responds to the call for new, more equitable and truly sustainable economic structures and partnerships that will deliver the transformative change we urgently need to see.
