Gender, Climate and Finance: How Financing Female-Led Businesses can Lead the Way to a Net-Zero Future for People and the Planet

Dec 21, 2022 | Joana Pedro, Cassandra Devine, and Marie Wallner
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In the third and final blog post in our series on Gender, Climate and Finance, we shift our focus to financial institutions that are leading the way to a net-zero carbon future through investments in women-led businesses and gender-smart climate finance initiatives. If you haven’t already, don’t forget to check out the first two blog posts in the series explaining the important role women play in addressing climate change, and highlighting the role of women in leading a just transition.

At last month’s COP27, dubbed the ‘implementation COP’, climate finance took centre stage in the ongoing work to bridge the emissions and adaptation gaps. Financial institutions will need to mobilize around US$1 trillion dollars of annual investment by 2030 in order to stay on track with our net-zero carbon goal. But resource mobilisation is only half the issue – we also need to make sure these resources are allocated in an equitable way that improves, rather than worsens, societal inequalities. An important part of this work is to invest in female-led initiatives, especially within sustainable development. Financing female-led initiatives benefits both society and the environment, as research shows that female business leaders are better at taking climate into consideration in their business decisions.  Despite this, the IFC estimates that only 7% of total private equity and venture funding in emerging markets is targeted towards female-led businesses and, similarly, just 3% of philanthropic environmental funding supports girls’ and women’s environmental activism. Female-led businesses often have difficulty accessing funding from climate finance providers who may overlook smaller businesses in favour of investing in large-scale projects.