By Krisztina Tora
Civil society representatives, including women and gender advocates, took over the COP 27 plenary last November 2022 at Sharm el-Sheikh, Egypt, to demand climate justice. Photo by: UNFCCC / CC BY-NC-SA
As we look back on global progress on climate action in 2022, one thing is clear: the 27th United Nations Climate Change Conference was a disappointment on many fronts, not least when it comes to the voice of women in the climate debate. This glaring failure was reflected in the lack of women delegates at decision-making levels: Only one-third of all delegates were women, while less than 10 women were pictured among the 110 leaders who posed for the official “family photo."
This imbalance can only be detrimental to the efforts to tackle climate change — particularly since women and girls are disproportionately affected by the consequences of the climate crisis. Addressing it starts with driving forward a solid gender-smart climate finance agenda.
The consistent lack of investment in women has environmental and social consequences. Today, 80% of people displaced by climate change are women. For solutions to the climate crisis to be viable, they must be designed by women, for women.
Gender lens investing, an approach that takes into consideration gender-based factors across the investment process, can create the enabling environment for a just transition to sustainable development by increasing women’s role as active players in the development and implementation of equitable climate mitigation and adaptation actions.
Investing in women and girls yields benefits on the social, economic, and environmental levels and leads to sustainable and just climate solutions. Through their influence as farmers, community leaders, workers, and entrepreneurs, women are central players in global sustainable economies.
There are obvious synergies with climate-related investments. For instance, off-grid renewable energy and clean-cooking solutions directly benefit women and women entrepreneurs, as well as the environment. Another example is the investment in female farmers, who represent 43% of the agricultural labor force in low- and middle-income countries. Such an investment could improve agricultural yields by 30% and help slow the decline in agricultural output expected by 2030 due to climate change.
Evidence also shows that in forestry, agriculture, water, and many other sectors, projects are more likely to succeed when a gender-sensitive approach is adopted. In other words, systematic gender-sensitive approaches improve social and environmental outcomes and benefit society as a whole.
To accelerate change toward gender-sensitive sustainable development, particularly through gender-smart climate finance, we need to start with the basics: getting women into leadership positions.
Women’s leadership consistently prioritizes environmental, social, and governance issues, and it is crucial for the effectiveness of climate financing. It puts women’s needs and agency at the top of its priority list — including breaking down the barriers that undermine women’s economic empowerment and prevent them from delivering a strong contribution to effective climate policies and more sustainable business practices.
For centuries, the game has been fixed in favor of men. A quick look at some of the figures shows just how uneven the playing field actually is. This report by European Women in VC shows that in Europe, only 15% of general partners in venture capital, or VC, funds are women. Moreover, they control just 9% of assets under management, earn less carried interest than their male peers, have fewer seats on investment committees, and progress to partner more slowly than men.
The gender gap is as perplexing as it is frustrating. Why are we still at the stage where we need a business case when the demonstration has already been done? Firms with greater gender diversity outperform with greater returns and less risk, both at fund and company level.
According to the Boston Consulting Group, companies founded by women deliver double the revenue per dollar invested compared to those founded by men. To be clear, these numbers are not from the impact investing universe but cover all investments — even the most traditional or conservative forms.
VC funding in climate tech is growing five times faster than overall VC funding. If women were able to access positions of leadership in this field and others, they would be able to create better economic outcomes, reduce the gender wealth gap, and drive innovative climate solutions. With a widening array of funds for investors, gender lens investing is the tool that can help restore our planet while improving opportunities and outcomes for women around the world. For investors, the challenge can be knowing where to start. Fortunately, there is an ever-increasing range of resources to help them navigate the space. There are useful knowledge hubs provided by GenderSmart and the Global Impact Investing Network. There are also collective initiatives that investors can join, such as the 2XCollaborative, or others operating on a more national scale, such as Gender-Lens Initiative for Switzerland.
There is a clear path to gender equality and an exponential multiplier effect in delivering climate solutions from investing in women — and the movement needs the support of men to reach its full potential. In companies where male staffers were actively involved in gender diversity, 96% reported progress on gender diversity — but where they were not, only 30% made advances, according to Boston Consulting Group. It is time for everyone to get involved in leveling the playing field — there will be benefits for investors, women, and the entire planet.
This is a piece written by Krisztina Tora. She is the chief market development officer at GSG. She helps drive capital toward impact in 70 countries around the world. Prior to GSG, Krisztina co-founded and led the Global Social Entrepreneurship Network, the global network of organizations supporting early-stage social entrepreneurs in over 50 countries, benefitting more than 2.5 million people around the world.