Women represent 43% of the agricultural labour force in developing countries, but receive only about 7% of sector investment. Investing in female farmers could improve agricultural yields by 30%, according to the Food and Agriculture Organization, almost enough to plug the decline in agricultural output expected by 2030 because of climate change.
Climate and gender are deeply intertwined. Women’s livelihood often depends on our forests, rivers, lakes and oceans, and the knowledge they possess about those resources could spearhead conservation efforts. At the same time, women suffer more from climate change. They tend to be poorer and often lack the financial wherewithal to recover from flooding, heat waves or fires.
Despite the profound impact climate change is having on women’s lives, however, their views, needs and realities are rarely taken into account in high-level climate discussions or policy initiatives. That’s incredibly short-sighted. Climate projects need women’s input to succeed, considering the enormous role they play as consumers, community leaders, workers and entrepreneurs. Women are an essential part of the climate solution.
The smart money is on women
We already know that investing in women is good business. Enterprises with women in at least half of leadership positions have higher sales growth, are more profitable and get a better return on their assets. Roughly 80% of consumer buying decisions are made by women, which means that firms with women across their ranks often produce better-selling products. But investing in women doesn’t just make good financial sense. It makes good climate sense:
A growing number of investors evaluate companies not just on their financial performance, but on their environmental and biodiversity commitments, as well as on their efforts to promote gender equality. EcoEnterprises, a biodiversity fund based in Latin America, is tapping into that investor interest. It has a solid track record of helping environmentally sustainable businesses in Latin America scale up their operations and provide economic opportunities for women in rural areas.
EcoEnterprises is owned and led by a woman, Tammy Newmark, and its fund management team is dominated by women. It has raised money for three successive funds so far. The third fund will allocate 15% of capital to investments in women-owned or women-led companies, and it will push for portfolio companies to employ women in 50% of jobs. Those objectives have qualified the fund for the 2X Challenge, a global initiative aimed at raising $15 billion to improve the economic participation of women. The EIB has supported the 2X Challenge since its inception.
One EcoEnterprises investment, an organic orchard producer in Colombia, is hiring women to balance out its male-dominated workforce and has promoted two women to senior positions as head of human resources and chief operating officer. Another EcoEnterprises investment, Ecoflora, is a fast-growing producer of environmentally friendly natural colorants for the food and personal care industries. Founded by Sandra Zapata, the Colombian company is actively expanding its supply network to include more women. The European Investment Bank has invested about $20 milllion in EcoEnterprises third fund alone.
Biodiversity and gender equality naturally complement each other. Focusing on the two objectives enhances project impact, while reducing risk.
Done right, climate change projects could provide a unique opportunity to invest in women’s potential. The shift to the green economy is expected to create millions of jobs. Ensuring that women have the skills to seize those new jobs could help address the persistent inequalities that exist in the labour force and reduce gaps in incomes. Providing women with this chance, however, requires integrating gender-sensitive policies into all aspects of job recruitment and promotion.
Achieving the United Nations’ Sustainable Development Goals hinges on improving women’s opportunities and economic participation worldwide. At the European Investment Bank, we have recognised that need and are increasingly weaving gender into our projects. We have been applying 2X Challenge criteria to our investments since 2019.
The 2X Challenge criteria define levels of female employment and investment into women-owned and women-led firms. Having internationally agreed criteria helps the European Investment Bank, and even more importantly our partners, to better measure our gender impact and evaluate what works and what doesn’t.
The European Investment Bank has also been working with the CDC Investment Works and the European Bank for Reconstruction and Development to develop a guide for gender-smart climate finance. The guide, developed on behalf of the 2X Climate Finance Taskforce, will provide investors with tools on how to integrate women into climate investments. It will be released on 9 November at COP26.
Directing climate resources correctly could enable the world to make significant progress on two fronts – climate change and gender – at the same time. As UN Secretary-General António Guterres says, “Bridging the gender divide is not only a matter of justice for women and girls. It’s a game-changer for humanity.