This week and next, governments, business leaders and civil society are meeting for the 27th United Nations Climate Change Conference, more commonly known as COP27.
They will be addressing the trillions of dollars of capital needed for climate mitigation, adaptation and loss and damage — for which an integrated perspective of climate, nature and ecosystem services is essential.
Gender has often been part of the conversation at COP events, in recognition of the role gender balance plays in our ability to respond to the climate crisis. But this conversation has historically focused on representation rather than on how paying attention to gender and diversity can be used to strengthen climate investments.
If you’re a regular reader of this column, you’ll know that bringing a gender lens to climate investments improves their efficacy across all fronts, including finance, sustainability and equity. You will also know that in the investment field, gender and climate have often been siloed.
That’s why I’m part of a global group of investors, brought together by GenderSmart, the Women in Finance Climate Action Group and the 2X Collaborative, calling on allocators of public and private climate finance and other key stakeholders in the financial system to take urgent action to improve gender equality when designing, delivering and accessing climate finance.
Our calls to action encompass all stakeholders in the financial system, including governments, the private sector, institutional investors and civil society. You can read the full letter here. For the purposes of this column I am sharing the calls to action the signatories have committed to, as well as some personal reflections.
1. Improve women’s inclusion in the financial system and ability to access climate finance.
Globally, women — and especially women of color — lack access to the resources, information and services they need to create and deliver climate solutions. Increasing women’s financial inclusion can power the low-carbon transition, support resilience to climate change and ensure women are not left behind. We know that more prudent climate-smart investment decisions are made when women are making decisions about the allocation of capital and when investment teams are gender-diverse. But at present, firms led by women and people of color manage just 1.4 percent of all U.S. assets under management.
Our letter calls on private and public finance providers to apply a gender lens to climate-related products and financing and consider ways in which capital can be allocated to funds and firms that have gender equity at their core — for example, through gender-balanced leadership, policies and practices, and the design and delivery of products and services that benefit women and are accessible to women.
Businesses, including financing institutions, should consider how accessible their products and services are to women and women-led businesses, and improve access to low-carbon and climate-resilient solutions in particular.
Businesses, including financing institutions, should consider how accessible their products and services are to women and women-led businesses, and improve access to low-carbon and climate-resilient solutions in particular. Governments have a role to play, too, in identifying how and where women are financially excluded, including as investment allocators, and introducing policies to shape new norms and business and investment behavior.
2. Integrate gender into public and private climate policy frameworks.
Currently, few organizations involved in climate financing consistently look at the role of gender equality. Without this strategic approach, gender issues are likely to remain marginal concerns, with disproportionate impacts from climate change and nature loss.
All organizations should set out within relevant strategies or policies how they consider and act on the connection between gender and climate. For governments, this means incorporating gender analysis into national climate plans. For private and public finance providers, it means creating policies to increase gender equity in core business activities such as lending, investing and through stewardship and advocacy efforts. And for civil society organizations, this means addressing either gender or climate to inform and drive gender-responsive innovation and resource mobilization.
3. Develop gender metrics in a climate context, and integrate them into climate finance reporting.
The reporting landscape on gender metrics in a climate context remains underdeveloped compared to other metrics now regularly reported on climate, such as carbon and greenhouse gas emissions from operations. To date, companies and public institutions have reported few and inconsistent metrics on gender and climate, limiting the ability of investors to meaningfully incorporate these metrics into capital allocation.
All public and private providers of climate finance should aim to measure the gender-responsiveness of their climate-related investments, products and services. Relevant existing industry sustainability and climate finance reporting frameworks and initiatives should consider how to incorporate gender/climate metrics into their standards. Civil society organizations working in climate and gender should lend their expertise to ensure metrics focus tangible real-world outcomes and advance climate and gender equality goals.
4. Improve gender-balanced representation in decision-making roles in climate finance and climate-smart businesses.
Research tells us that when women are not included in decision-making, their needs are less likely to be accounted for. Yet, women remain starkly underrepresented in decision-making roles in the fields of both climate and finance, and throughout the business value chain.
We call on all organizations providing climate finance to improve their gender balance, introducing specific measures to track their performance and progress. Financial institutions should also consider joining or establishing industry groups promoting gender equality in climate finance. Governments should deliver and extend commitments to support women’s equitable participation and leadership. And civil society organizations should hold businesses and governments to account on these measures.
Time to act
This is a crucial moment for governments, multilateral institutions and private-sector organizations to consider how private and public finance can better incorporate gender concerns to ensure that those trillions of dollars flow effectively and equitably.
I invite you to think about how you can apply these calls to action in your own investments and investment strategy, to develop a clear plan and set of metrics to put them into action.
We at GenderSmart and 2X Collaborative are excited to be working with Women in Finance Climate Action Group and specifically Oliver Wyman on the metrics work.
If you represent a financial institution or institutional asset owner and are interested in being part of this call to action or our broader work, please don’t hesitate to reach out to me at [email protected].