By Johanna Nyman, Head IGF and Helen Walbey, Head GIF 

 Women are disproportionately impacted by the impacts of climate change, but are also key to local adaptation. This report explores the role of financial regulation to advance the intersection between gender, financial inclusion and climate change, and seeks to answer how can access to financial services unlock this potential and increase women’s resilience to climate impacts? 

In exploring policy intersections between gender, financial inclusion and climate change, this report shares insights on how to mainstream gender considerations into inclusive green finance (IGF) policies. As an evolving policy areas, IGF seeks to mitigate and build resilience to the impacts of climate change and environmental degradation through financial inclusion, while gender inclusive finance (GIF) aims to increase women’s access to, and usage of, quality and affordable financial services. 

The report outlines the current state of climate change and its impact on women and takes stock of the global policy developments in this space, including the current challenges with mainstreaming gender considerations into green policies. It then moves on to identify how gender considerations could be built into inclusive green finance and concludes with concrete recommendations on how the  IGF 4P Framework on promotion, provision, protection and prevention can contribute to this.  

The gender perspective viewed through the 4Ps on IGF can be described as follows: 

Promotion 

When financial regulators engage in promotion policies, such as awareness raising, information sharing, capacity building and data collection, it is important to fully take into account women’s needs and realities. This is to ensure that private sector schemes are gender inclusive, and that government policies, developed in consultations with women, are gender-sensitive, and incorporate the requirements of women in any financial services or products being offered. This can be achieved through gender-sensitive, community consultations, with local gender experts who have a deep technical understanding of the economic and social context of the country. The use of local gender experts is key to ensuring that women’s needs and realities are included in policy developments. 

 Provision  

Provision policies are aimed at helping ensure financial resources for green projects or related climate action activities are provided to qualified beneficiaries. It is therefore imperative to ensure that qualified beneficiaries include women and girls, or women-led or owned MSMEs.  

In addition, selection processes should take a gender-sensitive or gender transformative approach. Stakeholders, including grassroots women’s groups, can work with the private sector and governments so that these bodies can better understand the different female market segments, including how women use infrastructure and energy services, develop internal capacity, and support the organizational culture change necessary to serve women clients more effectively 

 Protection 

Protection policies provide a safety net and help build resilience by facilitating and accelerating recovery from extreme climate events and sharing the risks related to climate change impacts. A gender-sensitive approach to protection includes putting in place targeted schemes and measurement frameworks and ensuring that women have equal access to gender-based risk-sharing and social protection mechanisms such as insurance schemes, social payments and assets, as well as credit risk guarantees. 

 Prevention  

As part of prevention efforts, financial regulators are enacting Environmental (and Social) Risk Management Guidelines to proactively assess and address the social and environmental externalities and risks which their institutions could face, including the unintended consequences of financing. While there are often gender-specific sections in ESRM Guidelines, there is, to date, no explicit intersection with green finance. Prevention policies should also ensure that the integration of climate change in risk frameworks is inclusive and does not lead to women being further excluded. 

 This first report lays the foundation for understanding the intersection between inclusive green finance and gender inclusive finance. There is both potential and urgency in continuing to explore this intersection and ensuring that there is a strong focus on women as a specific end beneficiary when inclusive green finance policies are developed.  

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AFI’s inclusive green finance workstream, is part of the International Climate Initiative (IKI), which is supported by the German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU), based on a decision of the German Bundestag. 

AFI’s gender inclusive finance workstream is financed by the Swedish International Development Cooperation Agency (Sida) and other partners.