If COP26 told us anything, it is that business is running much faster than government on addressing the existential issue of this generation - climate action.

Many Australians are alarmed by the Morrison government’s stance on the issue, which is essentially that we will be saved by as yet undeveloped technology. This seeks to avoid articulating the reality that transforming our economies will cost us, most likely in the form of higher prices for goods by pricing the cost of carbon.

Aligned with its technology-led climate change narrative, the federal government has announced commitments of several hundred million dollars to investigations of blue carbon, hydrogen energy and, most recently, stimulus for a transition to electric cars. Relative to the multi-billion cost of navigating the economy and community through the COVID-19 pandemic, it is small potatoes and considerably more will need to move the dial on progressing these programs.

It will no doubt rely on what Prime Minister, Scott Morrison, describes as ‘can-do capitalism’, which clearly suggests that the private sector will be expected to foot much of the bill - perhaps as a panacea for ‘can’t-do government’.

No matter who pays, how the world prices carbon and how we support our most affected communities through a massive shift in priorities and energy infrastructure, the environment will play a significant role, as we seek to protect and restore those terrestrial and marine assets capable of swallowing up a chunk of our carbon emissions.

These assets include equatorial jungle, temperate forests, undersea grasses, mangroves and a multitude of others. As we price carbon, the value of these will be fully accounted in the balance sheets of nations, becoming valued economically far more than they have been recognised for their contribution to biodiversity and tourism.

Herein lies the ethical dilemma for not-for-profits, especially environmentally focused organisations. In the face of rising asset values realised principally through the policy orientation of concepts like ‘can-do capitalism’, the private sector will see advantage in aligning, perhaps even integrating partnerships with science-based environmental organisations into their carbon mitigation strategies.

This will mean the boards and executives within these organisations will need to carefully consider the balance between accepting the funding that will naturally flow from these partnerships and the integrity and authenticity of the purpose and actions of the funders.

The complexity of this should not be underestimated. There are numerous considerations that can make or break the reputation of a recipient organisation.

Funders are transitioning to new business models, motivated by the reality of the need for climate action in order to protect and enhance future shareholder returns. Partnering and funding a not-for-profit may help achieve this aim. As a first principle, recipient organisations must accept this as the primary commercial motivation, no matter how shrouded it may be in purpose and spin.

Additionally, the same enterprise might bring with it the baggage of its history. In fact, it probably will, as there are few that don’t. Its carbon and environmental credentials might be tarnished, if its transformation is a positive for the environment and community and is authentic, can or should this justify acceptance of funding and resources for the greater good?

If the answer is ‘yes’, how does an organisation whose traditional stakeholders have opposed or even campaigned against the funder in the past take those people on the journey into partnership? What is the reputational risk and the potential cost of losing some supporters, who may themselves be philanthropist donors?

How does the recipient organisation manage the governance of partnership with a substantial commercial donor? In particular, how can it ensure that its own vision and purpose remain uncompromised by the deal? Examples of the dangers are plentiful, such as health research and advocacy foundations shadow funded by tobacco companies and pharmaceutical interests.

If we take former Prime Minister, Kevin Rudd’s assertion that ‘climate change is the biggest moral challenge of our time’ as true and assume that the major economies, including the USA, Europe, China and India, even go some of the way to achieving the COP26 targets, there is little doubt that these conversations will become very commonplace around the board tables of not-for-profit organisations.

It will open up many opportunities to source new and more diverse revenue streams and reduce the dependence of these organisations on government funding. The question is whether greater financial capacity and resilience will come at the cost of their own integrity, reputation and community support?

It’s a massive question because the value of the opportunity for partnership from the funder’s perspective will often be to bask in the halo and credibility of the not-for-profit’s own brand.

Without authenticity, this merely becomes greenwashing and the trick for not-for-profit boards will be to rinse off the soap to see if what lies underneath will be a genuine partnership and share commitment to a common purpose.

Photo: Matt Palmer on Unsplash