We sat down with Therese Kieve, Senior Stewardship Analyst, to understand more about gender-inclusive climate finance.
What is gender-inclusive climate financing and why does it matter?
Gender-inclusive financing requires investors to consider female needs in climate change investments. Climate change exacerbates existing inequalities. Women often bear the brunt of the effects, including increased poverty, less access to resources and heightened risk of gender-based violence.
80% of people displaced by climate change are women, according to the UN[1]
While climate change disproportionately affects women, they are often not included in the political or financial decision-making process to address these threats. For example, at last year’s COP27 conference of 110 world leaders, only 7 females attended[2]. By failing to considers women’s needs in climate change investing, we will continue to not only amplify existing inequalities, but also weaken adaptation and mitigation efforts.
How can a gender lens on climate financing help investors?
We can harness women’s unique perspectives and knowledge of food systems, technology and survival strategies to improve the effectiveness of climate action. Climate change investment should be an avenue for the empowerment of women, thereby ensuring greater resilience, stronger communities and more equitable outcomes.
What sort of opportunities are there for investors in gender-inclusive finance?
Climate finance mainly happens through large international institutions such as the UN Development Programme (UNDP), World Bank, European Bank for Reconstruction and Development (EBRD), and the Asian Development Bank (ADB). These are the institutions that tend to include gender-focussed climate finance. The Green Climate Fund [3] is an example of a climate fund that integrates gender inclusion from the outset.
What is being done to raise awareness of this issue?
We have definitely seen some progress in recent years, including initiatives such as the Green Climate Fund (GCF), mentioned earlier, which has committed to allocate at least 50% of its funding to projects that have a gender focus or that integrate gender considerations. However, there is scope for more action as investors begin to explore ways to integrate the previously distinct issues of gender diversity and climate change.
It is also worth mentioning that we are seeing a lot of progress on gender representation at the board level, in particular regions, thanks to greater diversity awareness, investor action and regulatory scrutiny. At Sarasin & Partners, we continue to challenge companies to follow through on board-level representation, but also workforce inclusion and pay equity. We use our proxy votes to hold company directors accountable to improve their gender and climate metrics.
A similar integrated approach is needed to accelerate gender-inclusive climate finance more broadly. While historically, there has been little guidance to help investors in this area, this is starting to change. The Women in Finance Climate Action Group (WIFCAG), for example, is a key resource for investors in this regard. They have recently released an action framework for applying a gender lens to climate investments[4].
[2]https://www.orfonline.org/expert-speak/the-gender-imbalance-at-cop27/
[4] https://30percentclub.org/wp-content/uploads/2023/01/WIFCAG-Gender-Climate-Framework_vF.pdf