In the face of two of today's most pressing challenges—climate change and escalating social inequalities— it is clear that we need to radically rethink our approach to finance. Not only do we need to drastically increase funding for climate change, but we also need to ensure that this funding is both socially and gender inclusive.
For far too long, women, particularly in developing countries, have suffered disproportionately from the impacts of climate change. Often tasked with managing natural resources and securing food and water for their families, women play a pivotal role in building community resilience. Strengthening their capacity to adapt to climate change is not only a matter of justice but also a strategic investment in the overall resilience of communities.
The business case is clear: women’s leadership across politics, finance and business is critical for climate action. The European Investment Bank's research reveals that over half of European firms are investing in climate action and that women-led firms achieve great environmental, social and governance scores. Women’s skills and talents are also needed as part of the workforce that will fill 24 million new green jobs by 2030.
An immense opportunity
Globally, financial flows for climate mitigation and adaptation amount to around $800 billion per year, but needs are expected to reach $4 trillion per year by 2030. Making all climate finance flows gender responsive would represent an immense opportunity to advance gender equality and climate action at the same time.
Climate action has the potential to generate benefits of $26 trillion by 2030 compared to business as usual. The economic influence of women, who control or significantly influence 85% of consumer spending, underscores the vast growth potential in adopting gender-responsive strategies. Women also possess unique knowledge and innovative approaches that can contribute significantly to climate resilience and mitigation efforts. In India for instance, involving women in forest and energy projects is associated with a 28% greater probability of forest generation and a 30% increase in sales of off-grid energy solutions.
- Men and women have different attitudes to climate change. Read about it here
The European Investment Bank, through its Climate Bank Roadmap, acknowledges the symbiotic relationship between advancing social inclusion, reducing inequality, and building climate resilience. The Bank committed to a three-fold increase in adaptation finance, specifically targeting the most vulnerable regions globally and supporting women. This commitment aligns with the broader goal of achieving a just transition and resilience.
The Bank implements gender-smart climate finance by investing in women entrepreneurs and fund managers supporting climate and environmental solutions. For example, in February 2023 the European Investment Bank signed €270 million of investment agreements with three Tanzanian Banks including the National Microfinance Bank of Tanzania (NMB) which supports women entrepreneurs and women-led businesses in the blue economy, including those with a focus on climate action and environmental sustainability.
- Read about great climate and health solutions by female entrepreneurs
We are also supporting projects enhancing the climate resilience of women and girls, such as through our €350 million loan to the International Fund for Agriculture and Development (IFAD) that aims to reduce poverty and build resilience to climate change. The IFAD helps rural women grow more food in a sustainable and climate smart way. It also helps connect them to markets, increase their incomes, and become more literate and financially skilled.
Enhancing women’s access to low-carbon infrastructure services is essential to tackle poverty, improve health, job, and education opportunities. In Brazil, through a €200 million loan with Enel, the European Investment Bank is increasing the supply of renewable energy to households in Sao Paolo’s favelas. 65% of the new renewable energy connections have been provided to households led by women, helping to tackle energy poverty among women and unlocking access to other financial and social benefits.
Collaboration is key
Finally, it is essential to collaborate with promoters to boost the involvement of women in green employment opportunities. In Spain, the European Investment Bank is helping the company Cabify to decarbonize its fleet of taxi vehicles, while increasing the share of women in the workforce to 50%, notably to meet the demand from female customers for more women drivers.
In 2022, 70% of our gender-smart projects also advanced climate action and environmental sustainability. This shows that gender and climate are not competing objectives. In fact, they are complementary. Unfortunately, however, while climate finance is scaling up much more quickly than previously expected, it is not always with a gender lens. We need to keep pushing integrated approaches to gender and climate finance, and for this, collaboration is key.
Initiatives like the gender and climate finance toolkit, developed in collaboration with 2X Global partners, and the participation of the European Investment Bank in the Luxembourg Gender Finance Taskforce, illustrate our conviction that the two issues are and should be closely tied.
Only through partnership can we ensure that the voices of women and other marginalised gender groups are not only heard but actively integrated into climate policies and initiatives that promote gender equality and climate justice