Philanthropy Through A Water Lens

By Julie King

An interview with Christoph Courth, Global Head of Philanthropy Services and water expert at Pictet Wealth Management.

Following the Stockholm World Water Week Conference at the end of August and discovery of a video entitled Philanthropy Through a Water Lens placed on the Financial Times website, I interviewed Christoph Courth, Global Head of Philanthropy Services at Pictet Wealth Management. His interview brought a new and holistic perspective on the global water crisis from the role that catalytic philanthropy can play in innovation and in aligning all investment capital around solving water problems.  As Christoph puts it; “the climate crisis is the water crisis.” 

Christoph, in the video you did on the Financial Times, you talk about “adopting a water lens” (for your philanthropy) and the current “siloed view” of water. You say, “we must think about how projects intersect with water and put water at the heart of the thinking.” There are acute water issues happening throughout the world now. How are you strategically addressing water with your clients?  

We live in such a delicate balance with the world around us. We see this right now. In the River Elbe in Germany, there’s a message etched in a rock that hasn’t been seen for 500 years. It says, “Wenn du mich siehst, dann weine”; “If you see me, weep.”  We should be crying. But we should also be doing something about it.

We have to be conscious of our impact on water and adopt a water lens to our existing philanthropy. For example, a philanthropist who has been funding educational programs in Yemen, Pakistan, or Alabama will have their efforts delayed or wiped out by the recent flooding, or another funding arts or culture in Europe will inevitably have their work impacted by the severe droughts. It is important that philanthropists look at their work in its relation to and impact on water.

You talk about the need to tackle the cause and not just the symptoms. In other discussions I had during Stockholm World Water Week, they were about how we’ve gone back to business as usual. Even after the pandemic, we are grabbing onto what we’ve always done, even though what has always been done has gotten us to the place we are now. When you are dealing with your clients, what is their sense of urgency about climate change? What are the perceptions of the risks, the water risks in their investment portfolios?

In the U.S., in the middle of the pandemic, I was chatting to a new philanthropist who had just inherited $100 million, which she wanted to give away in its entirety. She said, “My kids are taken care of. I don’t need another car, a bigger house, or a more expensive holiday. I just want to give it all away.”

I tried to help her understand more about where she wanted to give, what she wanted to do. She thought long and hard and said, “Coming out of this pandemic, I ask myself, do we want to build the same unsustainable, unjust, unequal world that we had before? Or is this our opportunity to just wipe the slate clean, start again, and build a much more fair and sustainable world?  And how can I use that $100 million to do that?”

In 2019, less than 2% of global philanthropy went to climate related activities. It was less than 1% in Asia and Asia being the continent most at risk of the effects of climate change. I haven’t seen new statistics, but I would expect — I would hope — that it is significantly higher. I really hope. 

In the video, you say philanthropists can allocate portion of grant capital to empower existing and new innovations — e.g., indigenous communities and technology innovations. Can you expound upon your thinking with this?

We always think of new innovations and technologies. But indigenous communities inhabit nearly one-quarter of the worlds land surface and are custodians of 80% of the remaining biodiversity, so we need to invest in them. But we’re not. We’re really not. In the U.S., for example, Native American communities receive less than 1% of the more than $400 billion given away every year. These communities have lived in symbiosis with the natural world for millennia and we need to empower them to continue to do so. It is shocking.

There is a role for philanthropists to take with their grants. Philanthropy is fantastic risk capital to test and develop new innovations. Governments are bound by short-term projects because of the need for re-election. Corporations are bound by obligations to shareholders. Philanthropy is not bound by these constraints. They can embrace risk and be patient by having a multi-generational timeline. I have several families who leverage their grant capital to support seed stage social enterprises, then scale the unicorns by leveraging funds from their VC investments. They will fund multiple opportunities, pilot them, and know that one or more will succeed, then invest to scale those. They have a distinct strategy across their work, from grants to investments. They look across all of their resources to pilot, provide seed and growth capital, and scale.

Is this kind of holistic impact investing strategy common with philanthropists or a shift that needs to be made?

I would say philanthropists who have this strategy are probably still in the minority. There is talk about strategic alignment between foundations and their funds. But, overall, decisions are still chiefly driven by heart and passion. It is more of a challenge to take a business and strategic approach to their philanthropic activities and investments. But I would say that it is definitely growing as more and more wealthy families are seeking help with becoming more strategic with their philanthropy.

Does “catalytic philanthropy” happen more in the U.S. or in Europe?

The most vocal narrative on philanthropy is the American version where we often hear of the impressive work that is taking place and the individuals behind it. But I see just as much impressive philanthropy here in Europe as I did in the U.S.

The question is still, even after the pandemic, how to affect that understanding of climate change and leveraging their capital. I think the pandemic, for one, made us realize our imbalanced relationship with Nature and the need to fundamentally readdress our relationship to it. Looking at biodiversity, freshwater, and oceans and the relationship between everything.  We didn’t realize how interconnected everything is; from Nature to humans across the world, it was all completely linked.

So, is climate change a bigger topic? I’m certainly seeing it from my own personal experience. We’re all much more aware of it, particularly this year whether you are in the U.S., Europe, Latin America, Africa, or Asia, the devastating impact is playing out on your doorstep. It’s never been so obvious and so stark. It is thrown in our faces by the droughts across the U.S. and across Africa and China right now, around the Horn of Africa.  At the same time, these massive floods in Pakistan where one third of the nation is under water.

If we don’t fundamentally realign and prioritize our relationship with the natural world, the line from Samuel Taylor Coleridge's poem, The Rime of the Ancient Mariner, “water, water everywhere and not a drop to drink” will be written on humanity’s epitaph.

To summarize: Climate change and water issues are far from being a mainstream discussion, but interest and awareness have been raised with these issues? And that discussion is taking place now from a lot of different angles? I don’t mean a ‘buzz’, not necessarily ‘greenwashing’ — although that is already happening with some environmental, social, and governance (ESG) funds. But would it be fair to say it is not mainstream yet?

I would agree. It is not mainstream yet. On the greenwashing part, the EU is doing a lot to try and clamp down on that through these different articles, Articles 8 and 9 and regulations coming into play. This is fantastic and so needed. This isn’t my area. But things that are labelled as impact funds or environmental funds which actually have an adverse effect because people think they are doing the right thing when perhaps they’re not.

You talk in the video about leveraging your investments, business, and influence and that the exploitation of water sources can lead to profound environmental, social, and economic consequences. You talk about influencing the change in how we have ‘exploited water’ and what kind of profound impact philanthropy and private capital can make towards the need for $1-2 trillion a year to accomplish the Sustainable Development Goals. What is going to mobilize this group to leverage their investments?

Last week, we brought together 50 next-gens of our largest clients. I did a workshop at that three-day event on how to mobilize your wealth for social and environmental good. And in that, we talked about leveraging one’s sphere of influence, looking at one’s investment capital, social capital, philanthropic capital, and business capital.

Quite often, we think of our ability to effect change as being limited to just one of those pots. Because I have philanthropy in my title, they come to me about their philanthropic capital. But I want them to think about the full sphere of influence they have: their investment capital — that 95% pot, typically is a much, much larger share of assets — and how those are invested. Are they aligned with the philanthropic capital? Are they aligned to work together? Responsible investing is no longer niche, it’s mainstream. It’s the dominant form of investing because of those economic impacts — like investing in businesses that are transitioning towards Net Zero. Over the long run, those are more likely to have a better return.

Then you have your social capital, your voice, your network, and your position of influence — which, if you’re in that wealth bracket, you do. Whatever age range you are, whatever role you hold, you do have a position of influence. Use that.

Then the business capital. The businesses that you own, that your family owns, that you have a controlling stake in, and your ability to influence those and how they operate, how they run, and their relationship with society, the world in which they operate. That’s what I want them to think about. And in doing that, they can affect policy. If they really want to create lasting change, you have to think of it at a systems-change perspective. And that does involve working with government; working at the very, very top to affect policy change or regulation or whatever it may be.  But it’s often the least fun, the least interesting, the least sexy form of philanthropy.

I had a client who wanted to save the rhino. He wanted to set up these rhino reserves in this country, breeding programs, etc., etc., and asked me, “what do you think?” My response was, “Well, as long as the rhino horn is worth more in weight than gold, heroin, cocaine, [or] diamonds, there’s always going to be a market. So, if you really want to save the rhino, you need to kill the market.” You need to work policy, advocacy, education, and change people’s perception that it has medicinal properties; then you kill the market and save the rhino. But it’s not as fun. Saving the rhino has an impact — you can visit it, see it. It’s more fun. And it’s the same with pretty much any issue. You don’t want to be the plaster [‘band-aid’] over an issue. You want to really stop the problem in the first place so there is no need for the plaster.

What was their response to that? Did it resonate with them? We hear a lot about the next generation. Young people do have a chance to step up. What was their response to that message?

In the main, we always hear that Millennials and Gen Zs are more social and environmentally conscious than the Boomer generation. I think everyone is much more aware. We know within two minutes of an earthquake happening; we see it on our phone, and directly from our phone we can take action. Whereas previous generations didn’t have that ability. We can see this in the war in Ukraine. Over $1 billion has been raised in philanthropic capital and 10% of that has been in crypto donations. Those are generally Millennials and Gen Z. They’re young and they can give quickly to the issues they care about.

So, it does resonate, and they look at it in different ways. They want to talk about the philanthropy and the investment part, according to my ESG colleagues. Whereas previously, it was just about talking about philanthropy. That has definitely changed.

Christoph Courth joined Pictet in Geneva after 5 years with UBS, first in Zurich as the Senior Philanthropy Advisor in Switzerland and then in Los Angeles heading up the Family and Philanthropy Advisory offering across the West Coast of the United States.

Prior to becoming an advisor to wealthy philanthropic families, Christoph spent over a decade working in the non-profit sector in East Africa, the Middle East, the Caribbean, and the United Kingdom for organizations such as UNICEF and The Prince’s Charities.

He has authored a number of philanthropy-specific pieces such as chapters in the publications Principles and Practice of Impact Investing¹ and Toolkit for African Philanthropists², and he is cited in the book Giving is Good for You³ and is principal author of Fundraising Guide: A Resource for Philanthropists⁴.

Julie King, author is a senior consultant in digital water technologies and is an experienced organizer, developer, and coordinator of international commercial projects with business, academic, NGOs, new tech, and international organization partners. She is a long-time contributor to Water Online in the water, environmental, tech, and international development and financing space.

¹Routledge, 2016
²African Philanthropy Forum, 2016
³Biteback, 2013
⁴UBS Switzerland AG, 2016