The mission of KR Foundation is
to address the root causes of climate change
and environmental degradation.
New beginnings and bold resolutions
In August 2021, The Intergovernmental Panel on Climate Change (IPCC) published the first part of its Sixth Assessment Report. Their message was crystal clear: Unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach.
Even though the world has yet to bend the emissions' curve, 2021 saw progress on many fronts, reducing the "emissions gap". In the run-up to the UN climate change conference COP26 in November in Glasgow, China, South Korea and Japan all made substantial commitments to phase out international support for coal projects – signaling a market shift that could mean the end of coal, which is the dirtiest fossil fuel. In November 2021, during COP26, the so-called Paris Rulebook was finally completed, and several states, cities and companies made ambitious commitments to climate action. Among these commitments was a pledge made by 34 countries and five multilateral institutions to end international financing of oil and gas projects by the end of 2022. Also during COP26, an alliance of international financial institutions committed to significantly scale up their support for green initiatives – the so-called Glasgow Financial Alliance for Net Zero. The list of pledges made in 2021 goes on, and they can be difficult to keep track of. At times one may doubt if all these pledges matter at all – whether they can translate into substantial action. But they do matter, or at least they can matter.
Making the pledges matter is part of the mission of KR Foundation's grantees, who in 2021 continued to push for the change we are now seeing across the world, and who often collaborate in an ecosystem with different tactics to pursue the same goal of advancing climate action: Strong think tanks calculate and communicate what ambitious climate pledges look like – and do not look like. Dedicated grassroot organisations push for higher ambitions and hold the countries and companies who make the pledges accountable. And coordinated alliances of organisations help develop and deliver on the pledges. We all know that a New Year’s resolution can be easy to make, but hard to keep, if there is no one around to support, motivate and, at times, pressure you. The same goes for climate pledges. So, KR Foundation and our many allies in global philanthropy will keep supporting the strong ecosystem of civil society organisations helping to realise the pledges and driving ambitious action on climate change.
New developments in KR Foundation
As a result of a strategic refresh in 2021, KR Foundation’s Sustainable Behaviour programme area now mainly focuses on the advertising and PR industry’s role in fueling the climate crisis. The new strategy is based on a similar approach as the foundation's Sustainable Finance programme area, which targets the financial industry: Creating change by supporting an ecosystem of civil society organisations working towards the same goal of aligning an industry’s practices with the Paris Agreement and the goal of keeping global warming below 1.5°C. The first grants have been made, and you can read more about them and the new focus in this report.
2021 also ushered in a new beginning for KR Foundation with the launch of the Danish 70by30 project. Launched as a collaborative effort between KR Foundation and THE VELUX FOUNDATIONS, the 70by30 project is designed to support the realisation of the Danish goal of reducing emissions of greenhouse gases by 70 pct. in 2030 (1990 baseline). This is one of the most ambitious goals in the world and achieving it will require a massive effort from all strands of society. DKK 320m have so far been allocated by the foundations to support key civil society organisations over the course of five years, helping accelerate the transition in a cost-effective, science-based and just way.
The climate crisis is a global issue that requires global solutions. One ambition of the 70by30 project is to strengthen Denmark’s position as a global leader on key climate issues and thereby stimulate global climate action. At this year’s COP26 in Glasgow, we saw what this can look like, as Denmark and Costa Rica launched the KR Foundation-supported Beyond Oil and Gas Alliance (BOGA) – a first-of-its-kind alliance, comprised of nations that are setting an end date for national oil and gas exploration and extraction.
We have seen tremendous progress over the last year, but there is still so much to do. Emissions are still on the rise, and so is what seems to be an ever-increasing energy demand. We absolutely need to keep fossil fuels in the ground and mainstream low carbon living, if we are to stand a chance of avoiding the most detrimental effects of climate change.
More than ever, philanthropic support for the challenging transition towards a climate safe world is needed. In KR Foundation, we look forward to working with our grantees in 2022 to achieve further progress.
An eventful year in Sustainable Finance
The extraction, production and consumption of fossil fuels are root causes of climate change and environmental degradation. The Sustainable Finance programme area seeks to shift financial flows to reduce fossil fuel supply and demand to safe levels.
2021 was an eventful year. The year kicked off with a slew of new commitments by financial institutions pledging to be net zero by 2050 – pressured by the growing spotlight on their role in financing the fossil fuels industry. At the big fossil fuel companies’ annual general meetings in the spring, investors took an unprecedented stand to encourage some of the big companies to increase their climate ambitions, while record amounts of assets were divested from the world’s most polluting companies during the year.
Investors challenging oil majors at annual general meetings
‘Black Wednesday’, ‘a turning point’ and ‘a day of reckoning for Big Oil’. These were some of the headlines in major business outlets at the end of May, following a streak of ground-breaking results in the campaign to pressure the oil industry to align their businesses with the Paris Agreement. At the annual general meetings of Chevron, Shell, ConocoPhillips, BP and Exxon it was evident that oil and gas majors are under growing scrutiny to deliver on their climate pledges, with investors voting for climate-related proposals in record numbers.
US oil giant Exxon even faced a new level of pressure as activist investors sought to replace members of the Exxon board. The KR Foundation-supported Climate Action 100+ and As You Sow were involved in two parallel campaigns that successfully managed to put five new climate-focused members on the Exxon board.
The outcomes of this proxy season made it clear that investors are no longer only requesting, but are increasingly demanding that oil and gas companies start addressing risks associated with the energy transition. KR Foundation grantees ShareAction, Reclaim Finance, the Sunrise Project and Oil Change International all played key roles in the work to ramp up this pressure. While oil prices recovered from the pandemic-induced price crash last year, and gas prices spiked to record highs during the second half of 2021, the pressure on oil companies indicates that institutional investors are starting to grow sceptical about the long-term financial projections of the oil industry.
That investors are increasingly taking the long view about the financial risks associated with fossil fuel investments is indeed evident when looking at the divestment movement. In addition to using their power of ownership in heavy carbon emitting companies, investors are divesting funds in the fossil fuel sector on an unprecedented scale – and even despite the energy price hikes seen in late 2021. As illustrated by the graph below, the amount of assets under management which investors committed to move out of coal, oil and gas grew significantly during 2021, reaching a record-high USD 39tr in divested assets at year’s end.
Notable divestment announcements came from Harvard University as well as from Europe’s largest pension fund, the Dutch ABP, who committed to sell off all their USD 17.5bn fossil fuel assets by 2023. Several KR Foundation grantees are deeply involved in the divestment movement, with 350.org, IEEFA, WWF-EPO and Urgewald spearheading the work.
Big three quitting overseas coal support
2021 also truly signalled how the era of coal is nearing its end. According to Global Energy Monitor, who are supported by KR Foundation, three quarters of proposed coal plants have been cancelled since the Paris Agreement, and 2021 only saw this momentum grow. For the past years, the three biggest financers of new coal projects have been China, South Korea and Japan, who all committed to terminate their overseas support for coal during the year. This was a major milestone, and KR Foundation grantees SFOC, JACSES, European Climate Foundation, Market Forces and IGES have all been deeply involved in the work to reach this outcome.
Spelling out the writing on the wall, the multilateral community agreed in the final weeks of 2021 to phase down the use of coal according to the Glasgow Climate Pact, the outcome document from the COP26 meeting. This was the first ever direct mention of a fossil fuel in an official UN text.
Public financial institutions exiting all fossil fuels
During the COP26 summit, several voluntary initiatives were also launched. One of the pledges getting the most traction was a Statement on International Public Support for the Clean Energy Transition. 34 countries and five multilateral institutions signed up to the statement, thereby pledging to end international financing of coal, oil and gas by the end of 2022. The signatories committed to not only end bilateral development finance and export credit support to fossil fuels, but also to use their vote on the issue in multilateral institutions.
If implemented fully, the announcement could shift USD 24bn annually in government funds from fossil fuels towards clean energy. KR Foundation grantees E3G, Oil Change International, BothENDS and ActionAid Denmark were closely involved in developing the statement and played key roles in getting the various governments to sign up.
A new focus on the advertising industry
The Sustainable Behaviour programme area supports interventions that counter narratives incentivising unsustainable behaviour and lifestyles, and that develop and disseminate narratives incentivising sustainable behaviour and lifestyles – with advertising and the advertising industry as the focal point. The programme area also supports efforts to mainstream the science and evidence base for sustainable lifestyles.
In 2021, KR Foundation decided on a new direction in the Sustainable Behaviour programme area. This change of direction is guided by the evidence base created throughout the years in the Sustainable Behaviour programme area as seen in the UNEP Gap Emissions report, the Cambridge Sustainability Commission recommendations and the 1.5-Degree Lifestyles report (see boxes 1, 2 & 3), which all point to the need to address the advertising industry's role as a driver of climate change. The programme will thus focus on the major role the advertising and PR industry plays in driving climate change and environmental degradation. Specifically, the foundation will support projects that challenge the advertising and PR industry's work with fossil fuel and high-carbon industries – industries that are to a large extent fuelling the climate crisis while often also actively trying to prevent ambitious climate action.
Industry changemakers transforming the advertising industry
A growing number of industry changemakers are starting to take up the task of transforming the advertising industry from within, and for the first time ever an event focusing entirely on advertising's role in driving climate change was hosted at COP26. Two of the participants in this event were Futerra Solutions Union and Purpose Disruptors – new KR Foundation grantees. They demand more transparency in the advertising and PR industry, and that the industry starts accounting for the climate impact from advertising campaigns (and not just the climate impact from industry operations).
The new KR Foundation grantee Glimpse Collective – mostly famous for filling the London tube with pictures of cats in 2016 to create awareness around the advertising industry's role in society – is another good example of an industry changemaker. In their project, Glimpse Collective focuses on creatives in the industry. They are already working with more than 3,000 creative talents who use their creativity to change the advertising industry’s role in society, and during the grant period with KR Foundation they aim to rapidly expand the collective to 5,000 talents that can drive change from within the industry.
Campaign groups targeting the industry
Climate campaign groups are also starting to pay attention to the advertising industry. New KR Foundation grantee Reclame Fossielvrij in the Netherlands has been successful in getting the City of Amsterdam to ban fossil advertising as the first major city in the world. This has inspired a new campaign by Greenpeace and 30 other NGOs, who in October 2021 launched a European Citizens’ Initiative (ECI) calling for a tobacco-style ban on fossil fuel advertising. If the initiative succeeds in getting 1 million signatures from EU citizens before October 2022, the proposal will be presented at a public hearing in the European Parliament to the European Commission. Reclame Fossielvrij is already collaborating with the KR Foundation grantee New Weather Institute, who, in their campaign Badvertising, is pushing for regulatory restrictions on high carbon advertising. Clean Creatives, another KR Foundation grantee, works to get “first-movers” in the advertising industry to take a pledge to become fossil-free advertising agencies, while at the same time calling out big advertising agencies for lack of climate action. More than 800 creatives and advertising agencies have already signed the pledge. Also, during COP26, Clean Creatives launched the campaign #EdelmandropExxon, putting pressure on the world’s largest PR firm, Edelman, to drop its client Exxon. The campaign forced Edelman to reconsider their relationship with Exxon – however, Edelman responded with a delaying tactic, which shows the need for strong and consistent pressure to be successful in the advertising and PR space.
Building the evidence base
A key pillar in KR Foundation's effort to address the advertising industry's negative influence on the climate is to help grow the evidence base in this field. An increasing amount of academic research on the relationship between the advertising industry and climate change is being conducted, a recent example being a research paper published in November 2021 by Robert Brulle3, providing a comprehensive look at how advertising and PR firms are a major force in obstructing climate action by helping to avoid and delay pro-climate regulation. The paper reveals that the advertising PR agencies’ playbook includes a combination of lobbying efforts, influencing legislative debates, seeking positive media coverage, employment of third-party experts and spokespeople, and grassroots mobilisation (“astroturfing”). Exposing and countering these efforts is crucial, and KR Foundation is looking forward to growing and supporting the ecosystem of organisations working to achieve this goal.
”Despite their sustainability goals and past pledges to stop working with climate deniers, nearly all of the world’s largest PR and ad firms continue to work with fossil fuel industry clients.”
Reaching one of the most ambitious climate targets in the world
The Danish government, supported broadly by the Parliament, businesses, civil society and citizens, has adopted an ambition to reduce GHG emissions by 70 pct. by 2030. This is one of the most ambitious climate goals in the world, and it requires a massive collective effort that involves all parts of Danish society. In 2021, VILLUM FONDEN, VELUX FONDEN and KR Foundation launched a DKK 320m project to help achieve the 70-pct. reduction target. The project, aptly named “70by30”, is designed to support the realisation of the reduction target and aims to enable informed decision-making on climate change mitigation at all levels of society to catalyse the necessary, accelerated climate action. And it will do so on a national scale for global inspiration and replication. The project is divided into five focus areas (see box) and is carried out in partnership with the green think tank CONCITO, the social enterprise DeltagerDanmark and Aalborg University as main partners.
Building the right team
Recruiting the necessary skilled people and building the right teams are crucial in the success of any project. In 70by30, due to the complexity of the project, this has been especially important. As 2021 comes to an end, the project partners have built strong teams and robust organisations and are ready to accelerate the implementation of the project. This is supported by a new sustainability hub, “Læderstræde 20”, located in the heart of Copenhagen. A shared knowledge platform and office space with a strong community of organisations all working to support a sustainable development of the Danish society.
Partnerships and strategic alliances
The development and coordination of strategic alliances to promote the necessary political action to realise the Danish climate goal have started to show the first results. Among others, a joint effort to support the climate agenda at the local elections in November 2021 and the development of a strategic alliance of civil society organisations to support climate action across Denmark.
Local climate action
In 2021, the main goal of 70by30 was to make sure that climate policy was high on the agenda in all political parties in the lead up to the municipal elections in Denmark on 16 November 2021. This was done through digital campaigns, by mobilising local climate groups, by delivering science-based recommendations for Danish municipalities, by a strategic public relation effort and via ongoing sparring with local politicians. The main themes that resonated with voters are still being analysed; however, the first data shows that for 43 pct. of all constituencies, climate and the environment were defining areas when casting the vote. This made climate and environmental policy the second most important policy theme.
The five initiatives
- Getting the data right: New global datasets and independent insights will be developed as basis for the ‘next generation whole-of-economy’ and full value chain-centred climate policies as they must unfold over the next decade.
- Knowledge in action: A markedly enhanced effort in deepening knowledge and developing appropriate policies will help ignite critical and timely action in critical sectors through new knowledge and co-creation with key stakeholders in society.
- Effective climate communication: A tailored climate communication and engagement effort built based on the new data and knowledge will engage the best global expertise in developing and applying new approaches to messaging and communication in a Danish and Nordic context.
- Boosting climate education: New teaching materials and teaching processes will help create a new generation of climate competent youth that will be decisive for lasting impact in every corner of society, driving new demands, behaviours and lifestyles.
- Involving for climate impact: The transition will require a population that is receptive to disruptive change. The ability to engage the society at large will benefit from new and science-based methods of involving and engaging citizens at large.
Ad agencies saying no to fossil clients
Fossil fuel corporations are the world’s leading polluters and have for decades been known to lobby against climate action. Today, even as their campaigns often focus on renewable energy, up to 99 pct. of their financial investments are spent on finding and drilling for more oil and gas. It seems that the oil and gas industry is trying to change its image without changing its practices, with the advertising and PR industry actively helping them craft this image.
Organisation: Fossil Free Media
Project title: Clean Creatives
Programme: Sustainable Behaviour
Grant: DKK 3,000,000
A growing movement of activists, advertising and PR industry professionals, and regulators are now addressing the role of the industry in supporting the biggest climate polluters on the planet. For instance, in 2021, Italian regulators fined Italy´s oil giant Eni EUR 5m for deceiving consumers about their ‘green’ diesel.
The Clean Creatives campaign aims to harness the power of this movement by bringing together leading advertising and PR agencies, their employees and clients to address the sector's engagement with the fossil fuel industry. They do this by focusing on three different areas:
- Putting advertising agency brands and their work for the fossil fuel industry in the spotlight: Clean Creatives name the names of agencies that are working with fossil fuel clients identify the specific ways they are contributing to pollution – and lift up those who take affirmative steps to guarantee themselves as fossil fuel free.
- Working with creative talent to empower their vision for a fossil fuel free future: Clean Creatives is increasingly exercising their power as employees in a variety of ways. Clean Creatives is helping this developing ecosystem of employee activism by organising pledges not to work with fossil fuel clients.
- Encouraging clients to drop advertising and PR agencies working for fossil fuel companies: Many large corporations now have ambitious sustainability strategies that aim to create a cleaner future.
Clean Creatives make the argument that these companies should not be paying the advertising and PR firms that are making a cleaner future so much harder to realise.
To date, 210 agencies and 600 creatives have taken the pledge not to work for the fossil fuel industry.
Aims of the project
Clean Creatives aims to reduce the economic and political power of the fossil fuel industry by limiting their ability to shape public opinion through PR and advertising. They pressure the PR and advertising agencies that work with the fossil fuel industry on several fronts:
- Focus on revealing the intentionally concealed relationships between PR and advertising agencies and their fossil fuel industry clients.
- Organise PR and advertising industry employees, including the many creatives who likely feel conflicted working for oil and gas companies.
- Organise PR and advertising agency clients, the sustainability-minded businesses, nonprofits and other institutions who will be unhappy to find out that their PR and advertising agency is actively undermining progress on climate change by spinning fossil fuel industry narratives.
Banning fossil advertising in The Netherlands
Many countries have restrictions on advertising for alcohol and cigarettes as these products have large negative health impacts. Now, several organisations are making a similar argument about advertising for fossil fuel companies and related high-carbon industries, calling for an outright ban on ads for these products. One of them is the global grassroots citizen movement Advertising Fossil Free.
Organisation: Reclame Fossielvrij (Fossil Free Advertising)
Project title: Ban Fossil Ads, Sponsoring and Marketing in The Netherlands (and beyond)
Programme: Sustainable Finance
Grant: 3,921,853 DKK
Inspired by the ban on tobacco ads, Advertising Fossil Free has started the world’s first campaign aimed at prohibiting advertisements for fossil fuels, as well as air, road and water-borne transportation powered by fossil fuels.
Although Advertising Fossil Free currently consists of a small team, they have already had promising results in the Netherlands: The City of Amsterdam has recently banned fossil advertising; Shell can no longer use the term “carbon neutral” and must stop carbon offsetting marketing; and a ban on fossil advertising is in 6 election programmes for the Dutch House of Representatives.
Among other goals in 2022, Advertising Fossil Free aims to make the first Dutch newspaper or broadcaster ban fossil advertising, to make more cities follow the example of Amsterdam and to encourage education, culture, sports, festivals and conferences to keep out fossil sponsors.
The project’s key objectives are
- Create awareness around fossil fuel advertising as unethical and illegal through legal action.
- Create bottom-up ripple effects by getting frontrunner cities in The Netherlands to prohibit fossil fuel advertising in the public space as well as getting media outlets in The Netherlands to ban fossil fuel advertising with the overall aim of the Netherlands banning fossil fuel advertising as the first country in the world.
- International scaling by collaborating with partners in the European Citizens’ Initiative aiming at getting the European Union to ban fossil fuel advertising as well as convene international experts and outreach to the leading international organisations such as World Health Organisation to ensure expert and top-down support.
One of the most powerful things you can do to protect the planet
The organisation Make My Money Matter is creating a citizen's movement demanding that the trillions of pounds invested in UK pensions shall go towards protecting the planet and building a better world. This people-powered campaign will raise awareness about how pensions are invested and enable citizens to demand that their pension is invested in mitigating the climate crisis rather than fueling it.
Organisation: Make My Money Matter
Project title: Support for our campaign to green the UK pension industry
Programme: Sustainable Finance
Grant: 1,292,792 DKK
Currently, the UK pension sector accounts for a huge £2.4 trillion. Much of this money remains invested in fossil fuels and is therefore actively fueling the global climate crisis. But people in the UK want that to change this: According to a survey, 68 pct. of British pension savers want their investments to actively help solve the climate crisis rather than make it worse8.
Doing this can potentially make a big difference. An analysis carried out for Make My Money Matter found that investments made by UK pension schemes enable the release of 330 million tons of carbon every year – more than the entire carbon footprint of the UK9. Changing one’s pension scheme is thus one of the most impactful climate actions individuals can take.
Make My Money Matter has a three-pronged approach to leveraging the power of pensions to help address the climate crisis – they want to galvanise public support, develop partnerships with NGOs and businesses wanting to green their pension schemes and hold the pension funds accountable by monitoring their climate pledges on a regular basis.
The movement is already having an impact: With film director Richard Curtis ("Notting Hill", "Love Actually") as co-founder and several experienced environmental campaigners on the staff, MMMM has made great progress: Over 70 leading companies and organisations such as IKEA, WWF, Tesco and Ernst & Young have committed to green their pensions, ensuring that their pension schemes match their sustainability strategies.
Since the launch in June 2020, more than GBP 1tr in UK pension funds have already been committed to robust net zero targets.
The project’s key objectives are
- Create awareness around fossil fuel advertising as unethical and illegal through legal action.
- Create bottom-up ripple effects by getting frontrunner cities in the Netherlands to prohibit fossil fuel advertising in the public space as well as getting media outlets in the Netherlands to ban fossil fuel advertising with the overall aim of the Netherlands banning fossil fuel advertising as the first country in the world.
- International scaling by collaborating with partners in the European Citizens’ Initiative aiming at getting the European Union to ban fossil fuel advertising as well as convene international experts and outreach to leading international organisations such as World Health Organisation to ensure expert and top-down support.
Reclaiming finance in Europe
Limiting global warming to 1.5°C will require a speedy phase-out of fossil fuels. Yet, oil and gas production is still on a growth trajectory. The availability and cost of finance can determine whether new oil and gas projects will ever be built and how quickly existing ones will be retired. To meet the objectives of the Paris Agreement, the French organisation Reclaim Finance has set out to make French and European financial institutions remove their financial support for fossil fuel companies.
Organisation: Reclaim Finance
Project title: Cutting off financial flows to the expansion of the oil and gas sector
Programme: Sustainable Finance
Grant: 2,007,636 DKK
The French banking sector being the fourth largest in the world, France has the potential to be a highly impactful testing ground for Reclaim Finance’s theory of change. As French financial institutions have put forward some of the most progressive exclusion policies on coal, there is a strong precedent to build on regarding oil and gas. With support from KR Foundation, Reclaim Finance will work to replicate the successes from the coal campaign. If French institutions start to move away from supporting oil and gas, it could create ripple effects in the wider European and ultimately global financial system.
The organisation applies a combination of in-depth research, public campaigning and direct engagement with key stakeholders to move the financial sector in a more sustainable direction. While Reclaim Finance's work has so far been focusing mainly on exposing European financial institutions’ exposure to coal, they will now scale their growing focus on oil and gas, leveraging the momentum created by recent climate commitments in these sectors.
Aims of the project
- Investigate performance and losses of private equity investments in fossil assets.
- Identify institutional investors that back private equity investments in fossil assets and engaging those investors.
- Media, communications and coordination with campaigners to publicise findings