Green GroWth: Enabling Gender Inclusivity and Empowerment Perspectives

Shakti Foundation, March 7, 2023

As we usher in an era of green industrial and economic transition, it is important to consider how we can re-imagine the new developmental paradigm. Will it endeavour to achieve an integrated, holistic and “sustainable” tomorrow or will it exacerbate current inequities? Today, we have an opportunity to design equity and agency into the unfolding low-carbon development pathway.

The concern around “just transition” has largely focused on compensating and reskilling (primarily male) workers in fossil fuel-intensive sectors. However, there is insufficient research, and dialogue, on women’s empowerment in the low-carbon transition. Climate change disproportionately affects women due to existing inequitable power structures, with estimates suggesting that 80% of those displaced by climate change are women[1]. Many women, especially in developing nations, rely substantially  on climate-sensitive sectors for their livelihoods and household well-being, making them particularly vulnerable to extreme climate events. This often translates to women and girls being excluded from  school, unable to work and under increased risk of economic, physical and mental violence. In addition, women entrepreneurs often struggle to secure funds through formal financing mechanisms. The reasons vary from lack of collateral and resources, limited financial literacy to socio-cultural attitudes and structures. In India alone, 15 million women-owned MSMEs reflect a financing gap worth INR 158 billion[2].

Empowering women by making capital, skills, and resources accessible to them can help address gender-based vulnerability to climate change and enable their participation in opportunities arising from green transition. It is vital to integrate gender equity considerations within the green growth agenda to narrow the gender gap, and shape and seize opportunities arising from gender responsive perspectives within decision-making.

Recent research suggests that if empowered women had full agency over their lives, and were able to make informed choices, global carbon dioxide emissions could be reduced by 59.6 GT by 2050[3].  It is quite striking  that companies with higher representation of women board members exhibit clear climate governance strategies and transparent disclosure of climate-aligned data. A higher return on invested capital and equity is also observed in companies with gender-balanced boards, along with increased likelihood of innovation. However, the representation of women, particularly at leadership roles, is still negligible especially within the banking and financial industry[4] .

Gender-responsiveness is persistently low in this sector given the  limited participation of women in financial decision-making. Case in point, only 2% of global climate investments were gender tagged as of 2021[5]. Insufficient gender-inclusion in the burgeoning green financial services ecosystem also limits women’s potential as market participants and employment generators. By way of an example, only 10 % of bank intermediaries are women. If this was raised to 30%, not only it would create 1.1 million jobs for women[6] but also benefit women account holders in the process as well be an effective channel to embed green considerations.

The climate change-finance-gender nexus offers unique opportunities to drive a holistic and innovative pathway to the net-zero economy.

A network for women, by women: Greening of finance by Women (GroW) –

To facilitate women’s participation in the green economic dialogue and provide a platform for women to be an integral part of the transition pathway, the Green Indian Financial System (GIFS) initiative has launched the Greening of finance by Women (GroW) network. GroW seeks to foster women’s participation in making the financial system resilient and fit for purpose, promote their leadership and knowledge, and enable them to advocate for gender considerations in financial policy, schemes, lending and investment.

By providing a platform for cross-learning among women across the globe, leveraging international and local collective intelligence, and mentoring young women professionals in the financial sector, GroW aims to create transformative change and impact. It aspires to enhance the voice and visibility of women in green and climate finance. It will seek to complement and establish exchange with existing green initiatives, enabling women professionals to be effective agents of change for the world tomorrow.

Climate change is perhaps the most defining crisis of our lifetime. It requires collective solutions that demand innovative thinking and diverse perspectives, talent, and skills. Women’s voice and participation will indisputably add to the efforts towards offering inclusive climate solutions and finance. This women’s day, lets grow together towards an inclusive greener future.

About the authors:

Neha Kumar, Head, South Asia Programmes, Climate Bonds Initiative works on sustainable finance policy and market development.

“I want to emphasise that inclusive green finance with gender as a focus needs to be a policy priority and organisational focus at the bank level. Women as users, borrowers, depositors, intermediaries, senior leaders and regulators will not only reduce gender inequality but evidence suggests they can also substantively contribute to banks’ stability, better risk management and green lending.”

Alisée Pornet, Head, Climate Finance and Energy Division, AFD India works on development finance and climate cooperation

“Sustainability needs to better connect with inclusivity. Beyond finance as numbers, the financial narrative of a desirable future relies on gender inclusion. Financial empowerment – at every scale- cannot be done without women, especially women experts, to mitigate the risks and expand the outreach to women users, borrowers and entrepreneurs.”

Kruthika Jerome, Programme Manager, Climate Finance, Shakti Sustainable Energy Foundation works on climate finance policy and ecosystem development.

“Sustainability cannot be achieved without inclusion. For a low-carbon pathway to be sustainable, it must integrate gender equity considerations and advocate for women’s participation. Not only will this allow for increased scale, pace and impact that a green growth seeks to achieve, it can also rebalance the current and persistent gender gap.”

 

[1] OHCHR. 2022. “Climate change and women”. https://www.ohchr.org/en/stories/2022/07/climate-change-exacerbates-violence-against-women-and-girls; Women’s Environmental Network. 2010. “Gender and the Climate Change Agenda. The impacts of climate change on women and public policy.”;

[2] ICF. 2022. “Opportunities and constraints of women owned very small enterprises in India”. https://www.ifc.org/wps/wcm/connect/2da6ccb4-5f11-4c25-8937-5a78ed26e9ce/Opportunities-and-Constraints-of-WVSEs-in-India.pdf?MOD=AJPERES&CVID=nZG21I0

[3] UNFCCC. 2019. “Making Climate Finance work for women”. https://unfccc.int/sites/default/files/resource/2019Pacific-Climate-Gender%20Report.pdf ; Hawken. 2017. Drawdown: The Most Comprehensive Plan Ever proposed to Reverse Global Warming

[4] Only 14% of leadership positions within banking and capital industry firms are being held by women in India: EY. 2022. “Diversity in the boardroom”. https://assets.ey.com/content/dam/ey-sites/ey-com/en_in/topics/women-fast-forward/2022/09/ey-dei-report.pdf ; Credit Suisse. 2021. “The CS gender 3000 in 2021”.

[5] CPI. 2021. Global Climate Finance Landscape. https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Full-report-Global-Landscape-of-Climate-Finance-2021.pdf

[6] India Development Review. Ideas for India. 2019. “The missing women in finance”. https://idronline.org/the-missing-women-in-finance/

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