$10 Billion Shortfall: Earth Fund Faces Major Funding Cut

Founder of Amazon, Jeff Bezos, is cutting funding for the Science-Based Targets initiative-a global body verifying whether companies do decarbonize according to the Paris Agreement. The $10 billion Bezos Earth Fund had been one of the biggest financiers of SBTi ever since its founding five years ago at the hands of Bezos himself. This withdrawal of funding is much more severe than anything Bezos previously committed to when it comes to climate. In fact, there has been plenty of controversy concerning whether programs including climate actions stand a future chance.

Withdraw Funding Support for SBTi

Bezos Earth Fund was launched with the idea of reversing the loss of biodiversity and addressing issues of climate. It infrequently funds SBTi. Over time, this institution has had a growth momentum and is indeed independent. Among the sponsors is the Earth Fund that has been funding up to $18 million annually over the past years; it was initially approved for three years but was extended back in 2021, and last year it was terminated; so because the grant is now over, SBTi needs alternative funding sources.

This amounts to half its funding that took place last year: the Earth Fund and the Ikea Foundation. With this enormous back-up missing in action, the SBTi has claimed it is operating a business to secure an alternative source for funding by encouraging donors to submit support contributions and even earning income through some validation services they provide. This change in the funding landscape comes at a very opportune time since the SBTi played a very important role in helping various companies and other organizations set their science-based targets to achieve what is outlined within the Paris Agreement.

Implication of Bezos's Decision

The withdrawal of funds from Earth Fund has surmised the controversies of Bezos' commitment towards climate action with a negative thrust, whereas other initiatives related to climate have also been continued funding by Bezos Earth Fund. However, ending funding to SBTi indicates a retreat into his previously defined ambitions about a climate agenda being ambitious.

Although Bezos has said the problem that has been associated with urgency over issues regarding the environment, he headlined at the New York Times DealBook Summit in January and spoke once again on climate action. This new shift in funding priorities may begin inquiry into the priorities of the Bezos Earth Fund and what this long-term will mean for the global climate movement.

Political Scene and Increasing Concern

This decision by Bezos comes at a time when the political scenario of the United States is changing with reinstatement policies of former President Donald Trump, further bringing confusion over the future prospects of global climate initiatives with the US having retreated from the Paris Climate Agreement all over again. On January 20, President Trump signed an executive order that obliged the United States to withdraw from the Paris Climate Agreement for the second time, pulling further back from global climate initiatives and its allies.

It does, in this trend, reveal that also funders face the fight that climate bodies like SBTi face with the current stark shift in what is being politically discussed. Credible funding bodies pulling out, the Bezos Fund for one, made a dicey cross onto SBTi and other peer organisations to beat their climate marks, hold corporate feet to fire and initiate meaningful change on climate.

Future of SBTi and climate action

It will put the burden on the SBTi to find its ways to keep going and continuing to play a role in international efforts on climate. The initiative is indeed motivated by its mission in aiding companies in adopting science-based targets, and its success will depend upon the expansion of its ability to attract more donors and partners.

While SBTi works to lay a diversified financial base, it is the same question: What will the rest of the international community do? How will this new dynamics in financial and political structures that seem to be surfacing to take shape the climate action future pan out? At such a time, influential actors, like Bezos, are exiting some of those activities that need governments, organizations, and firms to

fill the gap left behind by withdrawing capital.

Whether that is enough in terms of initiatives like SBTi to cause enough momentum or could it could, the coming years are very crucial in collaboration by the international community to succeed in overcoming all these challenges well before time to meet the climate change challenges.

This is an extremely important decision taken by Jeff Bezos's Earth Fund in backing out from providing support to the Science Based Targets initiative in this world of climate action. Questions are being asked about future global climate initiatives as well as concerning the bigger scheme of changes of financial and political dynamics. Therefore, with climate change still urgently holding the world together, the same underlined importance becomes even greater for sticking together and further innovating about combating climate change.
Source: Financial Times, Bloomberg