How corporate philanthropy can rewrite the rules of sustainable finance

Upon the signing of the monumental Paris Agreement at COP21 in 2015, the then World Bank Group President Jim Yong Kim infamously said: “We called for strong ambition, for remarkable partnerships, for mobilization of finance, and for implementation of national climate plans. Paris delivered. Now the job becomes our shared responsibility.” 

Kim’s emphasis on shared responsibility remains more relevant now than ever. The funding shortfall for global sustainability efforts remains staggering, with the Addis Ababa Action Agenda estimating that achieving the SDGs by 2030 will require $3 to $5 trillion annually, relative to the size of Germany’s entire gross domestic product. 

This shortfall persists amid heightened economic volatility and mixed signals in the investment landscape, where commitments to sustainability often clash with the realities of global markets. Despite stimulus packages in regions like the US, Europe, and China, traditional investors remain unconvinced.  

A Bloomberg analysis of data from Hazeltree found that hedge funds are predominantly betting against clean energy. Furthermore, since peaking in 2021, the S&P Global Clean Energy Index has plunged nearly 60 percent, while the S&P 500 Index and the S&P Global Oil Index have both surged by over 50 percent. 

With global public debt at an all-time high — the International Monetary Fund estimated it would reach around 93 percent of global GDP by the end of 2024 — governments face increasing competition in allocating scarce budgets across military expenditures, technological advancements, and social infrastructure while balancing high inflation and interest rates.  

Such contrasts point to a deeper, structural challenge: traditional financing mechanisms alone cannot mobilize the capital needed to meet global goals. The magnitude demands a blended approach to funding. Among these, corporate philanthropy represents an underutilized but uniquely positioned resource. 

In a whitepaper released last year, the World Economic Forum estimated that corporate philanthropic funding for climate and nature initiatives grew by 78 percent over the past five years, with contributions increasing from $268 million in 2018 to $607 million in 2022. Despite this growth, these themes still account for less than 5 percent of total corporate philanthropic spending. 

Herein lies its untapped potential.  

Unlike government aid or private investment, corporate philanthropy offers a unique combination of agility, mission focus, and capacity for innovation. These attributes make it especially well-suited to addressing some of the most pressing sustainability challenges. When strategically deployed, it can further act as a catalyst for regional integration by fostering collaboration across borders, aligning stakeholders around shared objectives, and addressing barriers to collective progress.

Nowhere is this potential more evident than in the Gulf Cooperation Council. The region is home to some of the world’s highest concentrations of wealth, driven by robust energy economies and increasingly diversified investments. But what sets it apart is its deep cultural and religious ethos of giving — through Islamic principles like zakat (obligatory almsgiving), sadaqah (voluntary charity), and waqf (endowments) — which aligns seamlessly with modern principles of corporate responsibility and environmental, social, and governance-driven philanthropy. With annual contributions estimated at $210 billion — and growing — wealthy individuals and family offices in the Gulf are increasingly deploying capital with a focus on social and environmental impact.  

The main challenge now lies in transitioning from traditional, often fragmented charitable giving to a more systemic, impact-driven approach. In many cases, philanthropic activities in the GCC operate separately from core business objectives, which diminishes their potential to leverage the corporation’s unique resources, expertise, and influence. 

Achieving greater effectiveness and alignment will require better exploring intersections between sustainability initiatives and existing priorities, ensuring that philanthropic contributions are strategically targeted to achieve both environmental and social impact. An example of this intersection can be found with the opening of the region’s first net-positive mosque. Traditionally, mosques are funded by zakat and charitable donations, but the new mosque represents a charitable donation to the community with a focus on sustainability. 

Consider workforce transformation. Corporations could channel philanthropic capital into re-skilling and up-skilling initiatives that prepare workers for the jobs of the future, particularly in emerging industries like renewable energy, sustainable construction, and green technology. Many GCC-based corporations also operate globally and possess advanced expertise in fields such as technology, logistics, and finance. By integrating these capabilities into their philanthropic strategies, corporations can maximize their impact.  

When multiple stakeholders collaborate in corporate philanthropy, the pooling of expertise, capital, and networks creates an ecosystem that is greater than the sum of its parts.  

The result? A virtuous cycle: philanthropic initiatives strengthen economic ecosystems, and in turn, provide the structural support needed to sustain long-term impact. 

The true promise of GCC corporate philanthropy, then, lies not in the scale of its wealth but in its ability to rethink what philanthropy can achieve. Beyond bridging funding gaps, the region can champion a new ethos — one where giving is not just reactive but anticipatory, catalyzing systemic change before crises demand it. In doing so, its corporates could redefine global standards of philanthropy and leave a legacy of transformative impact. 

Ahmed Galal Ismail is the CEO of Majid Al Futtaim Holding