Women are disproportionately impacted by climate change and face greater exposure to disasters, economic losses, and health repercussions than men. Climate finance has a large role to play in addressing these vulnerabilities. The lesser-told narrative, however, is that women also act as benefit multipliers, with the ability to improve the effectiveness of climate finance when it’s gender-smart.
As COP27 approaches, momentum is building for Gender Day, on November 14. Incorporating gender considerations more fully into climate action has been on the international climate agenda since the 2010 Cancun Agreements, followed by the 2014 Lima Work Programme on Gender, which aimed to integrate gender considerations into the work of the United Nations Framework Convention on Climate Change (UNFCCC).
While much of these efforts have focused on improving gender balance at the climate negotiation tables, a joint letter ahead of COP27 is calling for public and private investors alike to mobilize climate finance that is more ‘gender-smart’, but what does this mean?
1. Gender-smart climate finance is smart climate finance
Climate finance is gender-smart when it leverages women’s unique skillsets and experiences. Women play a catalytic role in climate mitigation and adaptation in their businesses, communities, and homes. Studies have shown that companies with women in leadership positions are more likely to adopt sustainability practices and reduce carbon emissions. Women are also critical to the adoption of sustainable land use practices, as well as the adoption of clean cooking, heating, and lighting.
Gender-smart climate finance addresses a missed opportunity to grow green businesses, build resilient communities, and launch transformational climate technologies by empowering women as entrepreneurs, community leaders, heads of households, and consumers.
On the other hand, failing to include gender considerations in climate finance can severely undermine the effectiveness and sustainability of climate investments. Ignoring the cultural, political, and social reasons for why women farmers, for example, face lower access to climate-resilient technology, information, and financing can prevent large-scale adoption of these same practices and technologies. Similarly, ignoring women’s purchasing power and security considerations cannot only result in decreased usage and profitability of public transport and green infrastructure investments, but can also heighten gender-based violence risks. Unless climate finance considers women’s unique needs, we risk amplifying existing inequalities, weakening adaptation and mitigation efforts, and undermining overall objectives of climate finance.
2. Gender-smart climate finance flows are on the rise, but greater intentionality is needed
An increasing number of public and private investors recognize women’s role as agents of climate action. Climate-related Official Development Assistance (ODA) that integrates gender objectives grew from 36% to 57% from 2014 to 2019, and so did blended finance transactions that target both gender and climate goals. An increasing number of funds are committed to gender-lens investing.
Yet, while investor appetite is growing, we need climate finance that more intentionally directs resources towards women and disrupts the systems that prevent women from accessing climate finance. Expert interviews revealed that gender is often seen as an optional add-on to climate finance investments. In fact, only 0.04% of climate-focused ODA had gender equality as a principal objective. Despite the evidence of women’s catalytic role in agriculture and businesses, the global financing gap facing women-owned businesses is equivalent to $1.7 trillion. Women farmers in developing economies receive only 10% of total aid for land use and agriculture. There simply are not sufficient climate investments going directly towards women or that address the disproportionate impacts that exist.
3. We need climate finance instruments designed with gender equality at their core
To get climate finance where it needs to be, we ultimately need more options and investment opportunities designed with gender equality in mind. For this reason, the Global Innovation Lab for Climate Finance (the Lab) launched a Gender Equality stream for its 2023 cycle. FinDev Canada and Global Affairs Canada support the initiative.
Ideas submitted to this stream should have as core objectives both the advancement of gender equality and climate change mitigation and/or adaptation. Ideas must have a direct impact on, and specific outcomes for, gender equality and women empowerment (see FAQ with examples). Leveraging the Lab’s experience in accelerating climate finance instruments, selected Lab ideas benefit from seven months of in-kind support to incubate their instrument and bring it to market.
Instruments coming out of the Lab can serve as catalysts, demonstrating the effectiveness of gender-smart climate finance instruments and ultimately contributing to climate finance that benefits women worldwide. In this way, we hope it will become increasingly obvious, at this COP and beyond, that gender-smart climate finance is simply smart climate finance.
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