To promote gender equality and women’s empowerment in climate finance investments, CDC Group, the UK’s development finance institution, the European Bank for Reconstruction and Development (EBRD), and the European Investment Bank (EIB), are joining forces under the framework of the 2X Climate Finance Task Force
The international partners presented their new toolkit, the Gender-Smart Climate Finance Guide, on behalf of the 2X Collaborative, a new global industry body for gender-lens investing, at the COP26 Climate Conference in Glasgow.
Alignment with the Paris Agreement presents an estimated US$ 23 trillion of climate investment opportunity in developing countries, according to the International Finance Corporation (IFC). However, about 85 percent of women-owned businesses remain unserved or underserved financially, equivalent to a US$ 1.7 trillion financing gender gap.
Jessica Espinoza, Co-Chair of the 2X Collaborative, said: “Women are agents of change and at the forefront of climate action globally. A growing body of evidence shows important synergies between gender equality and climate action, making a strong case for investments that are both climate-smart and gender-smart. The 2X Collaborative offers a peer learning and co-investing platform for the spectrum of investors to move the needle on gender and climate action through investment practice.”
Research also shows that companies with better gender diversity on boards are more likely to reduce the intensity of energy consumption, greenhouse gas emissions, and water use.
Climate investments with a gender lens can generate revenues for investors and bring significant benefits to women, by mitigating risk, driving value addition, and amplifying gender impact and equality.
As the focus of COP26 turns to the impact and role of women as leaders of climate action, the Gender-Smart Climate Finance Guide, provides guidance, tools and analysis, and case studies to support investors in identifying investment opportunities and mitigating risk in gender and climate financing.
Amal-Lee Amin, Director, Climate Change at CDC Group said: “Gender-smart investing and climate finance should be considered together to maximize potential impact. Women bear the brunt of the climate emergency and it is women who will have the greatest role in supporting communities and economies in adapting and becoming more resilient to its impacts.”
Gender-smart climate finance aims to address gender disparities and better inform investment decisions, leading to enhanced business outcomes and inclusive economic growth, and women’s empowerment during the transformation to net-zero economies.
Barbara Rambousek, EBRD Director for Gender & Economic Inclusion, said: “The EBRD promotes investments that support environmental sustainability and gender equality. Indeed, sustainable climate impact cannot be achieved without the recognition of women as change-makers and leaders that are central to creating innovative solutions. Therefore, sustainable and gender-smart climate finance lies at the heart of the Bank’s new strategies on gender and equality of opportunity. With our partners and investors, we are proud to launch the new Toolkit which helps turn this aspiration into practice.”
The Gender-Smart Climate Finance Guide comprises 11 sector-specific and thematic guidance notes outlining how investments can deliver climate mitigation and/or adaptation outcomes while promoting gender equality and women’s empowerment.
The sectors covered include water, transport, climate mitigation and adaptation, biodiversity, and green jobs.
The 2X Climate Finance Taskforce is an initiative of the 2X Collaborative, a new global industry body for gender-lens investing, designed to serve investors making their first gender-focused investment as well as investors at the frontier of this field.
The 2X Collaborative was formed by the members of the 2X Challenge, and Multilateral Development Banks, in partnership with the GenderSmart investing initiative, with the goal of expanding gender-lens investing practices to a wider group of commercial investors.
EIB Vice-President Ambroise Fayolle, said: “Climate change and environmental degradation hit women harder, especially in low-income countries. However, women can play a bigger role in building a green economy. The guide that we are launching today is a precious tool to help investors apply a gender lens to their climate investments. Such investments are key to accelerating development and reducing poverty, which is at the heart of the EIB’s mission as the EU Bank.”
The 2X Challenge was founded by the Development Finance Institutions (DFIs) of the G7 group of nations as a call to action to shift more capital to investments that empower women in developing countries to access entrepreneurship and leadership opportunities, quality jobs, and products and services that enhance their economic participation.
After surpassing its original target by 100 percent, the 2X Challenge committed to raising US$15 billion for gender-lens investment by the end of 2022.
The Gender-Smart Climate Finance Guide was also supported by the Climate Investment Funds (CIF) and the Green Climate Fund (GCF) through the EBRD.
It builds on the COP25’ Enhanced Gender Action Plan, and a new workstream focused on raising awareness and increasing the amount of climate finance available to women, from both public and private entities.