On a journey from inspire to require: Embedding climate action into community funding – National Lottery Community Fund
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What does climate integration look like for a large, generalist community funder?
This case study, from the publication “How to Integrate Climate into Your Philanthropic Programmes: What Foundations Need to Know, and Where to Begin” shows how the National Lottery Community Fund is weaving environmental sustainability across all its UK funding – from a £100 million Climate Action Fund and country-specific programmes to new environmental expectations for grantees – moving step by step from “inspiring” climate action to increasingly “requiring” it.
About the organisation
The National Lottery Community Fund aims to deliver social and environmental benefits across the UK, funded by National Lottery players. While tackling the climate crisis is not formally incorporated into the fund’s broad purpose, in recent years it has increasingly integrated this dimension into its work.
Motivation and approach
In 2022, under new executive leadership, the National Lottery Community Fund launched a strategic renewal to shape its direction through 2030, engaging over 18,000 organisations and individuals. This process resulted in four community-led missions for the fund, all shaped by strong public input, to address key societal challenges facing communities in the UK.
One of the fund’s four missions focuses on making communities environmentally sustainable. While sustainability extends beyond climate action to include broader environmental issues and access to nature, this mission envisions communities that positively impact the climate, and are prepared for and able to adapt to the effects of global warming. The fund sees its missions as interconnected and has documented how the overarching outcomes of each mission overlap.
To realise its environmental sustainability mission, the National Lottery Community Fund developed the following strategic goals which are included in the fund’s Environmental Plan 2023-2030:
- Being a world class environmental funder.
- Improving the environmental impact of the voluntary and community sector.
- Becoming an exemplar in managing the fund’s own environmental impact.
- Demonstrating influence and leadership.
The National Lottery Community Fund became a signatory to the UK Funder Commitment on Climate Change in 2023, signalling the organisational importance of climate action.
Integration into the fund’s programmes
The fund has taken bold steps to embed climate action into its funding strategies, recognising that environmental sustainability is fundamental to community resilience. The fund’s commitment to climate action is realised through two core approaches: (1) embedding environmental and climate considerations across all its funding, and (2) improving the environmental impact of the voluntary sector as a whole.
Embedding environmental and climate considerations across programmes
Recognising the urgency of the climate crisis, the fund has made sustainability and climate action a key priority across its five funding portfolios, embedding climate and sustainability considerations through both targeted initiatives and responsive funding approaches. Furthermore, by 2027, it aims to have at least 15% of the fund’s grantmaking go to projects that have environmental sustainability as their primary aim.
One important initiative in this direction was the launch of the Climate Action Fund in 2019, a £100 million investment over 10 years supporting community-led projects that address the intersection of climate and nature. This flagship programme aims to showcase best practice and inspire and influence the building of a wider community-led movement to respond to climate change. Over £100 million had already been committed by March 2025, meaning that the original commitment will have been significantly exceeded by the end of the 10-year period.
The fund also runs environmental programmes in each of the four countries of the UK – England, Scotland, Wales and Northern Ireland – through its country portfolios. For example, in Northern Ireland, funding is focused on supporting communities to ensure the sustainability of their buildings via the Sustainable Community Buildings Programme, whereas in Scotland, the emphasis is on supporting urban and rural communities to become more resilient and sustainable through the ownership and management of land and land assets. Across these programmes, the fund emphasises the co-benefits of climate action, highlighting positive impacts on energy efficiency, economic resilience, health and well-being.
Further cross-cutting targets to achieve the sustainability mission include empowering funding teams, panels and committees through a structured offer of training and resources to make confident funding decisions based on a clear understanding of key environmental issues. In addition, the fund has set the goals of better understanding the impact of the environmental projects they finance and showing how they impact on other social indicators.
Improving the environmental impact of the voluntary sector as a whole
The fund recognises that funding climate-friendly projects alone is not enough: Systemic change requires improving the environmental impact of the voluntary and community sector as a whole. As the UK’s largest funder of community activities, the National Lottery Community Fund is leveraging its position to build a more environmentally regenerative future. This involves acknowledging both the direct and indirect environmental impacts of its funding; supporting applicants and grant holders in strengthening their sustainability commitments; and providing broader sector-wide support beyond grantmaking.
To drive this shift, the fund has launched several successful initiatives aimed at embedding climate action across its funding portfolios. Pilots that combine access to expert advice and a commitment of financial resources – such as its Climate Action Top-Ups (see example in the “Support for partners” section), Climate Action Boost in Wales, and Environmental Top-Ups in Northern Ireland – have encouraged grant holders to integrate sustainability into their projects. In 2021, the fund introduced the Climate Action Hub, a subsection of its website, providing funding information, insights and the latest sector news on environmental action through which it offers environmental guidance; practical strategies for reducing energy costs and ecological footprints; and tailored country-specific support to communities.
Recognising the multiple needs and limited capacities of the organisations it supports, the fund takes a proportionate approach to integrating climate and nature considerations into its funding strategy. Tailored resources, including environmental guidance, are readily available through the Climate Action Hub, ensuring that grant applicants and recipients have access to the tools they need. Proactive initiatives such as Climate Action Top-Up Grants further encourage environmental action, while sector-led programmes supported by the fund like Going Greener Together (in NE England) and Growing Climate Confidence (in Scotland) provide grass-roots support. As part of its evolving strategy, the fund is also moving toward embedding sustainability requirements within its formal funding framework, describing its journey as progressing “from inspire to require”, with new mandatory environmental considerations for all grantees being piloted in certain portfolios.
Success factors
Building staff knowledge and confidence
Given the fund’s broad mission, most grantmaking staff are generalists, with limited environmental expertise or background. To address this, the fund has invested in staff training on climate, creating an internal knowledge hub with resources and case studies, and making some climate training mandatory.
Explicit plans and targets
The National Lottery Community Fund has integrated clear and ambitious environmental targets into its Strategy and Environmental Plan. These explicit and time-bound commitments provide a structured framework for decision-making, ensuring that sustainability is a core consideration in funding allocations and operational practices.
Community engagement
By actively working with local partners and community groups, the fund ensures that climate action is shaped by those it impacts most. Through pilots like Climate Action Top-Ups, it has successfully engaged organisations not traditionally involved in environmental initiatives, demonstrating the importance of grass-roots participation in achieving broader sustainability goals.