Q1: The MacArthur Foundation has been actively focused on extending grant and capacity building support to climate solutions.

1a) Could you share with us, about the Foundation's climate strategy in India and the nature of solutions that you are looking to support?

So, first things first - we do not fund enterprises; we fund nonprofits as part of our grant making strategy. So these are mostly FCRA (Foreign Contribution Regulation Act) registered, nonprofits, based in India or international nonprofits that have functional offices in India or are working with partners.

We have been operational in India since 1994; the office is based in the India Habitat Centre, New Delhi, and this is our 30th year of existence. Since ‘94, we have done a variety of programmes in the field of leadership on education, in the field of population and reproductive health, in the field of technology and public interest and in conservation and sustainable development.

Our most long standing programme so far has been the Population and Reproductive Health (PRH) program, which we exited in 2015. And since then, we have been programming around climate solutions. And at that point of time, in 2015, we had a strategy refresh - wherein the big bet strategies came into existence. There are four big bets within the Foundation and climate is one of them. The other three include criminal justice, nuclear challenges, and anti corruption work in Nigeria called On Nigeria.

So those are the other three big bets, but climate has been the biggest of all of them. And when I say big bet, it means that these are time bound efforts on a particular theme, on a particular issue. And that's why you see criminal justice, nuclear and climate. In addition to this, we do have awards and programs, like the 100&Change program, the MacArthur Fellows program - those are more enduring programmes as opposed to big bets, which are time and space bound.

The climate strategy to begin with in 2015, revolved around three major emitting economies - USA, India and China, the three major economies which are poised for growth, or had already grown at the cost of the carbon budget. We wanted to come in and say - okay, how can we make sure that these countries set ambitious goals on climate - mostly climate change mitigation, and then stay true to it, and if these three countries set goals and are poised for achieving those, then the rest of the world will follow; and we will be sorted out as far as emissions are concerned. Unfortunately, that didn't come through. The US backtracked from the Paris Agreement and there was less hope from China. India was the lone leader in that space, wherein the country set some really, really ambitious goals in 2015, around solar and renewables. In 2020, we were in the midpoint strategy phase, and then we pivoted around sub-national, then we moved towards the state economies; such that how could states be the leaders as opposed to the country being a leader. In addition to that, we also made sure that equity was mainstreamed across the board. So a climate solution that does not work for people on the margins was not a climate solution for us. So that was the pure and simple definition that we subscribed to in 2020 and 2021. Most of our programming after that has been in the states of Jharkhand, Chhattisgarh, Odisha, West Bengal, Uttar Pradesh and on the western frontier, we have Gujarat and Maharashtra, with them being the industrialized economies within the country.

The topics that we cover in this strategy are mostly around energy transition. So anything to do with energy, clean energy, energy transition - we have been focusing on that. Having said that, we do not fund pure play research on tech for instance. We have supported some state-of-the-play, reports etc., but not necessarily hardcore tech innovation. Most of our partners in the first five years were think tanks at the national level, including the likes of CEEW, TERI, Brookings, CSTEP, CSaP and others but in the latter phase, which is since 2020, most of our partners include national think tanks, but most of our new programming has been with state level partners who are working directly with communities and we're trying to ensure that they are mainstreaming equity when they talk about climate or when they work on any sort of climate solutions on the ground.

1b) One follow up question to what you just mentioned - you said that, you know, largely, the foundation works with nonprofits. There are many for-profit, climate tech enterprises, so to speak, which also require grant support in their pre-seed stage. Is that also a space that the foundation would be looking at funding?

MacArthur is definitely at the cutting edge of innovation. So where we do have an impact investment team, because it's a centralized function, we don't have the capacity to fund anything at the seed stage. Having said that, we've made a few grants to intermediaries who have been funding some of the startups.

For instance, we have a focus on Just Energy Transition and we have supported Social Alpha, to build this innovation ecosystem in the state of Jharkhand. Again, it's not about building an innovation ecosystem in Jharkhand, but rather; if Jharkhand is undergoing a transition when it is losing out on one energy source and the other energy source isn't coming in, what could be the future of that state? How can we make it future ready? What is the future of startups in that particular stage?

And that's why we funded Social Alpha to enable Jharkhand to become an innovation hub, if at all possible by using a livelihood lens and a climate lens along with it. That's been our entry point.

Q2: Speaking of clean energy, we observe a lot of new innovations coming up within the energy transition itself such as green hydrogen and battery storage solutions. Is that an area of interest for now? How are you viewing all these new age technologies?

Again, since we have been focusing on Just Energy Transition, we know that a few states are going out of the energy economy because of the dwindling resources or other emissions paradigms changing. Jharkhand, Chhattisgarh, Odisha being at the center of it, even Uttar Pradesh because it has got the largest concentration of thermal power plants. So when we look at tech innovation, we feel that green hydrogen, for instance, will be coming up mostly in the western part of the country, renewables have come mostly in the southern part of the country or Rajasthan, but these are not the states that are undergoing major disruption because of this energy transition. So we see a disparity such that, some states are losing while some states are gaining. Which is okay. But the states which are gaining had gained in the past also because of the industrial transition; and that's why they have the capacity to attract newer industries. Green hydrogen being the case; battery storage being another case, wherein most of these mega factories are in Gujarat, for instance, or are in Maharashtra or in Tamil Nadu, etc.; not in Jharkhand.

And that's where we feel that they have been just deemed to just be sacrifice zones and that most polluting industries will be there. So that is the entry point that we see in these spaces. But I think the nonprofit ecosystem does have a role to play. For instance, one of our partners - Rocky Mountain Institute (RMI) had worked on a green hydrogen strategy with Niti Aayog on these things and that used a little bit of our support. Some of our other partners who have core support from us have been working with the government bodies to ensure that they have the know-how to create a policy ecosystem to ensure that these newer technologies have a level playing field as far as the older technologies are concerned. So I think it's more of an ecosystem building role that the nonprofits play and that's where philanthropic capital is most useful, as opposed to funding tech innovation or research on that front.

Q3: We have also realized in our research that while technology has been coming up, the ecosystem is not fully equipped yet to deploy that technology.

In this context, when it comes to building ecosystems, one area, which we've noticed has not been receiving too much of private capital support, has been climate adaptation. It is perceived to be a case more for philanthropic capital to come in. Could you share your opinion on how philanthropic money could be channelized to support climate adaptation?

That's a tough one. And we've been exploring that space ourselves, given that we don't work in that adaptation space pure-play. Most of our strategy has been around climate change mitigation. After 2021, a little bit of it has gone into intersectionality of climate change mitigation with adaptation, the zone which we call resilience. So in that respect, I would say that adaptation is a tricky case, because the risks are socialized wherein the risks are borne by the public, while the gains are privatized. That is where adaptation suffers, because everyone thinks that it's a public good that needs to be provided as opposed to mitigation, where there's a business opportunity.

If you see India's energy transition, it happened, because there was a business opportunity to be tapped, and many players jumped into it. Unfortunately, adaptation hasn't been impacted like that yet. Yes, some of the adaptation technologies that have been coming up, do represent some sort of tech solutions, but it's still being deemed as a public good. And that's where I think we face challenges. As we look at the public good element of it, the need for capital in that adaptation space is much, much bigger than the mitigation space. And that's where it's a little bit overwhelming for philanthropy is to see how their dollar could actually lead to longer term large scale gains, as opposed to mitigation where you could actually see the gains right away.

For instance, building a resilient shelter in a coastal area in coastal Odisha, how does that lead to people actually using it? These are mostly being constructed by the government - the state governments. That is why multilateral institutions, bilateral institutions have a bigger role to play by virtue of multilateral cooperation or bilateral cooperation as opposed to philanthropies. There is room for philanthropy in building the intersectional web, of how we can transition from this mitigation to an adaptation world. Having said that, there is always a challenge that these are the next few years that we have left for mitigation, the rest of the time that we have is all for adaptation. Sometimes it's also touted that mitigation is the first form of adaptation, you can't just let the tap loose and still try to wade out water from the boat. So you have to do both at any given point of time. At this point of time, adaptation is something that we have not explored; but what we are trying to do is just trying to explore the intersectionality between mitigation and how we can build resilience.

I will give you an example - we funded a group in rural Uttar Pradesh to work with brick sector workers. It is essentially to increase the operational standards for brick sector workers who are mostly migrants, and they face excessive heat. They face excessively oppressive work environments in brick kilns. So the idea was to ensure that if the brick kilns get decarbonized, by virtue of working with the brick and owners, can we really envision at new paradigm for labor in the brick sector work which is more operationally friendly at the same time reduces the heat stress that these laborers face and also reduce the migration because of the change in weather paradigms for where the source districts that these people are coming from as opposed to their destination districts. So that's where heat stress will be touted as adaptation. While decarbonisation of the brick kiln is pure-play mitigation, how can we keep people at the center of it so that they become that intersection through which we can have mitigation or adaptation work very closely.

So that's one example that I would like to give you. And there are a couple of others there in India - in rural Odisha, as well as rural Maharashtra working to enable people tide over this crisis of not having enough livelihoods because of the climate stress. And at the same time, using DRE, for instance, decentralized renewable energy, as livelihood mechanisms.

To the point that you mentioned, where philanthropy capital could come in and fund pilots that can help build the visibility of the impact that can be created both from decarbonisation, as well as social impact, is that a space where philanthropists would seriously look at coming in with, given that it aligns with their objectives?

The brick kiln is a different example, because the technology was already available. The reluctance has been from the brick kiln owners who adopt that technology. At the same time, there has been a political deadlock in that place wherein half of the brick kilns are unlicensed, while the licenced ones are already decarbonized, because they have adopted this exact technology. A large chunk is unlicensed, as a result of which they do not want to invest in that technology. So it's more than just tech. And that's where I think it is enforcement; it is policy, it is mobilization on the ground. Be it debunking these myths surrounds exact technology. That's why I'm saying it's an ecosystem play, as opposed to just a tech play. The tech has been there, it hasn't been adopted. So what has been stopping the tech from being adopted? - that's what we have tried to unlock as part of this work.

Q4: When we speak of mobilising action on ground, to achieve impact outcomes, a lot of investors are right now trying to draft their impact measurement strategy.
While this could be sector specific, we believe there could be some broader social impact metrics, which could be tracked to ensure that the impact which is intended is actually being met. So from your experience, if you could share a few critical metrics,which investors need to keep in mind?

If I use the ESG framework and if I look at the social part of that ESG framework, I feel that the work that we have funded so far in this space; we've always looked at immediate, medium and long term impacts.

I'll give you an example of solar water pumping work that we supported in West Bengal. So the government has a large-scale scheme - Kusum, which is about solar water pumps. To enable people to access that policy, we had supported a group called SwitchON in West Bengal which used to give turnkey solutions to these people - they would help get the solar water pump and its subsidy, install the pump and also give the AMC; everything they would give free of cost. And then they don't charge for this service. And that's what the philanthropic capital enabled them to unlock. One thing, which we figured out that was very useful in terms of social impact over there, was that only those communities were coming to them who did not have a solar pump to begin with; and these are mostly poor communities who needed that service more than others as opposed to some people coming to them for the second pump. Because they could figure out who has the second pump and who doesn't have; they would give priority to the ones who did not have. Of course the emission gains would be calculated automatically, because of the pump.

The interesting part which happened was the gender part of it. Because there was a special subsidy for women farmers; women entrepreneurs, people were ready to include the name of the woman in the family into the land title, because the land title had to be given in order to access the scheme. As a result of which, there was agency being developed, which was the beginning of a longer term thing. And that for us was a big win that because of this scheme, women were getting access to the land, even if it was just for namesake but tomorrow, if something happens, she does have a name on the land title. That was a long term win that we saw in terms of metrics.

So when we look at the ESG framework, or the social part of that framework, we would want to look at how many of the organisations that we have supported are being led by the marginalized groups, for instance, by women, indigenous communities, lower caste, even Dalits, for instance, and how can our programmes be more useful to communities who would generally not have access to such kind of tech or solutions?

So that is really important for MacArthur; it is a non negotiable for us.

Q5: Going ahead, in the next year or so what are the priority areas for the foundation? And since you've mentioned ecosystem building, are there any kinds of partnerships that you look forward to building within India?

Because it's a big bet, it is a 10 year strategy that we operate in. It started in 2015 and it's coming to an end in 2025. So this is the last year of grant-making that we have. So we are making a final set of grants later this year. And there will be just two or three legacy grants that we make early next year. So the climate big bet as such is sunsetting. So we're winding down the big bet, having said that, the foundation is not winding down the field. The climate field will remain alive, the India office is going to remain alive, what we end up doing next is something that we are scoping out right now. So in terms of partnerships and in terms of more work, it's an exploratory stage that we are in right now. But we're not looking for any new partners at this point of time. As far as climate is concerned, we just want to make sure that those whom we have funded already, have enough to tide over this gap (that we are going to leave behind) for at least the next two to three years. This is our priority right now.

We have a bias for equitable outcomes. We have stopped funding anything which does not further social equity. That means - even if we have to go to the hinterlands of the country to find organisations who are doing meaningful work on the ground with these communities, we will go and find them. And as a result of which, we would want to support smaller organisations as opposed to the big fancy usual suspects; and there is a peer group that we are a part of who are going through this journey. So it is a live conversation within the foundations to support communities who have the need, as opposed to just organisations who have been around for a while, but need more support. That is also important, but we would want to prioritise smaller organisations.

Background of the MacArthur Foundation

The John D. and Catherine T. MacArthur Foundation, invests in creative solutions that strive toward transformative change in areas of profound concern, including the existential threats of climate change and nuclear risk, the challenges of criminal justice reform in the U.S. and corruption in Nigeria. Its institutional goal is to understand the impact in all its work with evaluation being integral to the work across its lifecycle.

Since 2016, its key focus in India has been that of Climate Solutions grantmaking. The Foundation supports mitigation interventions that seek sustainable solutions to challenges India faces from climate change. Activities are focused on capacity-building among organizations that may not focus exclusively or primarily on climate, as well as organizations representing workers’ and smallholder farmers’ interests.

Prior to the Climate Solutions work, the Foundation partnered directly with a diverse set of individuals and institutions that continue to play a remarkable role in the field of maternal and reproductive health and in promoting the participation of girls in accessing quality secondary education in the country.