For a greener, fairer and more prosperous world, put more women in charge
- Women tend to make better, greener choices in life and business. As entrepreneurs, investors and CEOs, they play a critical role in climate leadership
Emerging research underscores the business and development case for applying a gender lens to climate-related investments. It also highlights the critical role women play in climate leadership.
Similarly, women leaders are more likely to invest in renewable energy, leading to reduced greenhouse-gas emissions and improved environmental outcomes, and women-owned businesses are more likely to pursue greater energy efficiency and practices such as recycling. Banks run by women lend less to big polluters.
In the workplace, female leadership is associated with increased transparency regarding environmental footprints, and a higher percentage of women on a corporate board is known to correlate positively with the proper disclosure of greenhouse-gas emissions.
And yet, while more than one-fifth of major corporations have pledged to reach net-zero emissions by 2050, very few are taking explicit steps to include women in their climate action plans and decision-making. If they did, they would have a far better chance of hitting their targets.
According to recent EIB research, only 36 per cent of all entrepreneurs in the European Union are women, partly because they have more difficulty than men when it comes to financing their ventures.
The consequences of this disparity are far-reaching. Women who own businesses are more likely to employ and retain other women and to improve employees’ skills by investing in training. The EIB finds that 47 per cent of female-owned firms have more than 50 per cent female employees, compared to just 26 per cent of male-owned firms.
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The shift towards a greener, more digital economy can open up more opportunities for women, because companies that pursue such goals also tend to grow more dynamically, which in turn creates jobs and helps practices that promote gender parity become mainstream. Moreover, there is some evidence that green start-ups are more often established by women.
As 2XCollaborative’s Gender-Smart Climate Finance Guide shows, there are many ways to ensure that women play a greater role, from elevating more women to the top ranks of financial services providers to supporting women investors and helping women customers go green.
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Women care about sustainability, and since they are usually the “chief purchasing officers” within households, they are the people the marketers of climate-friendly products need to reach. Hence, the Financial Alliance for Women, a global network o financial institutions, is exploring how to “green” the customer-value proposition for women across a broader range of products and services.
Similarly, as part of its new commitment to link gender and finance, the Luxembourg Stock Exchange has begun to flag sustainable debt instruments that either set gender-equality targets or raise financing for projects advancing gender equality and women’s empowerment. These are simple measures that can make it much easier for investors to identify gender-focused bonds.
We must remove the economic barriers that women face while also providing the resources and support they need to succeed. With more women in business leadership, we can create a more equitable world for everyone, and give humanity a better chance of survival.
Barbara Balke is secretary general of the European Investment Bank
Thomas Östros is vice-president of the European Investment Bank
