100 European cities will achieve climate-neutrality by 2030. Why (and how) should foundations engage?

An emerging movement on the horizon: Philanthropy partnering with cities for a just and equitable transition

Cities are playing a key role in achieving climate-neutrality by 2050. They consume over 65% of the world’s energy and account for more than 70% of global CO2 emissions. Although they take up only 4% of the EU’s land area, they are home to 75% of EU citizens. This high concentration of population and economic activity in urban areas means that climate mitigation is heavily dependent on urban action. Without significant efforts to reduce emissions and energy consumption in cities, global and regional climate targets will be unattainable. Therefore, urban areas must be at the forefront of implementing sustainable practices and technologies to achieve these goals.

There are many entry levels for those willing to embark on the journey towards climate-neutrality, starting from high impact sectors such as air quality, energy and buildings, food systems, transportation, water, and waste management. This is why cities and urban areas have been identified by the European Commission as one of the five areas of work to foster innovation to accelerate the transition towards climate-neutrality.

The European Climate Law, which legally binds the EU to achieve climate neutrality by 2050, sets the framework for these ambitious goals. Amongst the many frameworks and tools that institutions have provided themselves with which to achieve these goals lies the “Climate-Neutral and Smart Cities Mission” (aka Cities Mission) calling for 100 European Cities to achieve climate-neutrality by 2030. In the wake of the Intergovernmental Panel on Climate Change’s “final warning” on the climate crisis in March 2023, what role does philanthropy play in addressing this urgent issue?

Philanthropy is uniquely positioned to tackle the climate crisis because of its distinct qualities. Foundations…

• are “ecosystem activators” as they often have an established reputation at community level, with strong relationships with the public, private and third sectors.
• have a capacity to foster community leadership and ownership thanks to their expertise in meaningfully engaging citizens and communities in transformational processes, as cities are increasingly becoming “laboratories” for testing approaches towards a more integrated governance and resolution of urban challenges.
• provide stability and long-term perspectives, as they endure beyond changes in government, which is crucial for long-range planning, especially in initiatives spanning until 2050, as they operate in perpetuity and are not subject to electoral cycles.
• can invest patient or risk capital in purpose-driven innovation, funding work that neither public nor corporate donors can support.
• can play a role of “system change activation” by igniting Public-Private-Philanthropy Partnerships (PPPPs), long-term multi-stakeholder partnerships in which public, private, and philanthropy sectors combine funding and/or non-financial resources to enable social, economic, and/or environmental transformation (TPI, 2023). Foundations can play a catalytic role in unlocking additional finance in the framework of such partnerships.

Although philanthropy is uniquely positioned to tackle the climate crisis because of its distinct qualities,  it needs to embrace even bolder and more systemic actions because the complexity of the transitions we are facing requires a profound change of the status quo: “At the moment it feels that the philanthropic sector […] is steering clear of some of the most politically challenging aspects of this transition, for example work tacking levels of consumption in wealthy countries, alternatives to the economic growth…” (European Funding by European Foundations, vol. 6, p. 30).

Could the EU Cities Mission be an efficient and practical framework to accelerate a place-based movement towards climate-neutrality while ensuring that this transition is rooted in justice and equality? A number of pioneering foundations across Europe are already engaging with one or more of the 100 cities selected by the European Commission to achieve climate-neutrality by 2030. They are doing this primarily through opportunities laid out in the Mission Cities’ Climate City Contract, by fostering partnerships with regional and national governments, or by providing capacity-building for systemic change. The following section highlights these foundations’ efforts with a series of concrete examples.

Through the instrument of the Climate City Contract

“Foundations can support cities (granting or paying for) in getting access to additional experts from the project design (engineers, legals, …) down to project management and reporting.”

Sara Leporati, Fondazione Compagnia di San Paolo

Climate City Contracts (CCCs) are a key pillar of the Cities Mission. Conceived as a governance innovation instruments, CCCs build on the knowledge, resources and experience cities already have, providing them with a new framework to move forward as a whole, rather than just as the city administration, to seize opportunities and overcome the barriers they face in meeting the 2030 goal. They do so by accelerating collaborative action at all levels – ranging from the horizontal (i.e., within the municipality itself and with key local stakeholders including citizens and civil society, businesses, public services), to the vertical (i.e., the regional and national levels).

Developing the CCC is a mandatory step along the pathway to climate-neutrality: it is both a process and a document. It results from a co-creation journey amongst local, regional, and national stakeholders willing to work together to expedite climate-neutrality. Non-binding, it presumes, however, a public commitment amongst those parties who have engaged in the co-creation and contributed to the shaping of its Action and Investment Plan.  

How can foundations engage? Foundations acting at community level can be a key player in the co-creation process of the CCC as well as co-signatories. Building on long-term relationships with both the political and administrative levels, they can act as enablers of and catalysts for the engagement of stakeholders, spearheading the participation of civil society organisations, fostering purpose-driven innovations, and making sure that the transition towards climate-neutrality leaves no one behind.

Example: The city of Turin, in the Italian region of Piedmont, is one of the 100 Mission Cities. In March 2024, the city presented its CCC to the European Commission. The Action Plan looked specifically into how to accompany CSOs in their transition towards more ecological practices. Fondazione Compagnia di San Paolo supported the co-creation process leading to the Climate City Contract and every year the foundation launches calls and initiatives aimed at supporting the restauration of natural heritage and projects on climate change adaptation and mitigation.

“Foundations have the potential to partner with civil society organizations, local communities, universities and research centres, to support municipalities in achieving the goals they set out in their Climate City Contracts.”, said Alberto Anfossi, Secretary General, Fondazione Compagnia di San Paolo and Member of the Mission Board of Experts. The foundation has for example supported the municipality by getting access to additional experts for the development of a digital twin allowing to plan based on “What if” scenarios.

Fostering partnerships with regional and national governments

Since the selection of the 100 Mission Cities, cities have repeatedly shared their needs in terms of collaboration opportunities with other cities, with regional governments or at the national level. This is both linked to their limited capacity, that city teams must meet the ambition, scope and scale of the goals, as well as to the physiological impulse towards collaboration to avoid duplication, increase impact and improve the efficiency of the transformative agenda.

For example, in Spain, the CitiES 2030 platform was created to deploy a series of support services to accelerate the transition to climate-neutrality of Spanish cities and platform member organisations. These services range from capacity-building for the stakeholder ecosystem to support in drafting the CCC, to the connection with similar processes in other European cities, as well as supporting the development of innovations, strategic communications, or assistance to cities in structuring financial plans. The Spanish example is being replicated in Greece, where a similar national platform is being created.

How can foundations engage? Support to help seed the design and initial work of a new national or regional support platform could also be a high-leverage opportunity to contribute to the impacts sought by the Mission and Mission Cities. NetZeroCities, the operational arm of the Cities Mission that brings together 34 leading city networks, research organisations, and urban stakeholders from 13 countries. NetZeroCities, also called Mission Platform, has been designed to help cities overcome the current structural, institutional, and cultural barriers they face in their pathway towards climate neutrality. We have been engaging in a dialogue with the Mission Platform and will be providing more updates to help foundations understand how philanthropy can leverage its unique toolbox to support cities and their stakeholders in this transition.

Example: Laudes Foundation responds to the dual crises of inequality and climate change by supporting brave, innovative efforts that inspire and challenge industry – such as fashion or the built environment – to harness its power for good. As part of its pan-European built environment innovation work, Laudes has funded a range of partnerships in organisations that represent industry, finance, policymakers and social actors across Spain. Laudes has recently agreed a strategic funding partnership with the Spanish national platform CitES as a backbone for local collaboration across the sector, supporting its Spanish partners to join forces with the Cities Mission to pursue common goals.

Example: In Denmark, Realdania has gone above and beyond to ensure that all 98 municipalities across the country have (96) or will have (2) climate action plans in line with Paris Agreement. In 2019, ahead of time, the foundation set up the DK2020 programme to assist municipalities in preparing ambitious, local climate actions plans to lead the way to climate-neutrality. Of these 98, 6 have net-zero by 2030 as their target and in some cases even before that date. Another 5 municipalities have set 2040 or before as target. It is also not unlikely that municipalities will revise those targets within the next 2 years, bringing them closer to net-zero in 2030. Philea’s “Cities of Tomorrow” entry on Realdania further explains how foundations can drive the transformation of an entire country by acting as a trustworthy enabler of change.

Capacity-building towards systemic change

Achieving climate-neutrality represents an unexplored reality: we have one shot to get it right, and it must be a collective endeavour.. We recognise that collaboration is messy and takes us out of our comfort zone: mutual learning, exchanges on the process (rather than focusing solely on the dichotomies of  failures and successes) are crucial components. Building capacity becomes integral to navigating this process. The experience that foundations have in terms of systemic change can bring a new perspective to the Cities Mission. They can support  co-creation processes requiring stakeholder engagement within the framework of systems change.

How can foundations engage? In the words of Louisa Hooper, Fundação Calouste Gulbenkian, “Everyone must be involved in the journey to net zero. We must invest in and show much more clearly the benefits of a greener world if we are to get to where we need to at the speed we must. Building on innovations and the evidence from social science, there is a huge opportunity to catalyse action at scale, working with cities and civil society to influence, inspire and above all include communities and groups so often left out of the conversation in shaping a more sustainable future for us all.”

Example: The Fundação Calouste Gulbenkian is one year into the implementation of a grantmaking strategy which has “effective engagement around climate and ocean action” at its core. A key focus is building the interest and the capacity of both municipalities and civil society in Portugal and the UK to involve communities and groups who are ‘beyond the bubble’ of climate converts, leaving no one behind. The programme champions a positive solutions-focused story about climate action, evidencing the benefits to people of nature-based and fair transition solutions. As part of this work, the Fundação Calouste Gulbenkian has been talking to the three Portuguese Mission Cities who are leading the way in Portugal.

In addition to these preliminary conversations, the foundation held a high-level conference on the theme of ‘Public Participation in Climate Action’ inviting the Portuguese EU Mission Board member Paulo Ferrão to provide an opening introduction. In December 2023, the foundation launched an open call for collaborative experimental projects from municipalities and/or NGOs (ideally working in partnership) to develop and test approaches to increasing public participation in Portugal (particularly from those communities and groups not usually interested or able to engage). The foundation will also provide ‘funder plus’ capacity building support to the cohort of projects chosen and believes it has a role to play in supporting networks of sharing and learning, amplifying the innovations and leadership of the Mission Cities and other pioneering initiatives.

Other kinds of support

The Cities Mission is an ideal testbed to explore the broad range of partnering opportunities that foundations can engage in, experimenting their catalyst function within frameworks that foster multi-stakeholder partnerships. For example, based on their mission and thematic expertise, foundations can support specific areas of work in the Mission, whether in general via the Mission Platform or with the Mission Cities.

“This support could be focused on a particular domain, e.g., mobility or clean energy, embodied or Scope 3 emissions, etc., or could focus on a key aspect of work, e.g., multi-level governance innovation, policy innovations, new finance structures or deployment models, social innovation, etc” stated Thomas Osdoba, acknowledging the convening power of foundations at territorial level. “Together with Philea, we can identify specific Mission or city needs that resonate with the willingness of philanthropy to accelerate the transition by supporting processes or domains”.

Example: The German Marshall Fund of the United States (GMF) GMF Cities programme focuses on strengthening the role of cities in addressing global challenges by fostering transatlantic cooperation and innovative policymaking. GMF facilitates exchanges among city-level actors in North America and Europe, emphasising democracy, social equity, climate justice, and economic development for social good. Through initiatives like the City Directors of International Affairs Network, GMF connects government professionals to share best practices and build collaborative networks. The programme’s approach involves cross-sectoral partnerships with local governments, civil society, and private sectors to enhance leadership skills and policy expertise. GMF’s work underscores the significant role of cities in global affairs, promoting resilience and sustainable urban development amidst evolving geopolitical challenges.

Engagement opportunities through Philea

With Philea bringing together more than 200 European foundations and 27 National Philanthropy Associations representing an additional 7,500 foundations, we strongly believe in our role as convenor, broker, and multiplier of the ambitious impact that the Cities Mission must achieve. In addition to the foundations listed in this paper, we are engaging in conversations with major foundations in Spain, Italy, Greece, Belgium and Denmark who are starting their journey in dialogue with the Mission Cities in their territories. Moreover, via its European Philanthropy Manifesto, Philea has been advocating for the recognition of the role of foundations beyond their financial capacity.

This is a pivotal moment for the implementation of the Cities Mission: in the months to come, all cities will have to present their Climate City Contracts and engage in the implementation of their Action and Investment Plans. Philea and Climate-KIC, the leading innovation agency on climate, have signed a Memorandum of Understanding and Collaboration agreement which offers Philea’s members tangible opportunities to identify, showcase and match specific needs of cities in their journey towards climate-neutrality. In alignment with the work done by the Funders Forum on Sustainable Cities, we see the collaboration with Climate-KIC as an unprecedented collaborative exercise to develop the required imagination infrastructure needed to conceive new ways of living together and the new skillsets as well as to address the root causes of environmental degradation that lie within our economic system.

Join the growing movement of philanthropic organisations working around designing our future climate-neutral, just and fair urban environments!