How can we meet the world’s climate goals?
"Start by putting more women in charge. That will give a much better chance of not only controlling global warming but also achieving greater prosperity along the way," suggests European Investment Bank Group (EIB Group) Secretary-General Barbara Balke in an article co-authored with EIB Vice President, Thomas Östros.
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. A recent report from the European Investment Fund shows that women-led firms have higher environmental, social, and governance scores than other companies, and that businesses with greater representation of women in leadership positions have better track records of adopting environmentally friendly practices.
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 are reported to lend less to big polluters.
Women make climate investments and profits
"In the workplace, women’s 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. A critical mass of women on a board leads not only to better climate outcomes but also to more innovation. Given these findings, it is no surprise that the world’s most sustainable cities are led by women," states the article authored by Barbara and Thomas.
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.
"Elevating more women to the top ranks of companies is not just about equality; it is about leadership and entrepreneurship that play a critical role in driving economic growth and creating jobs with positive social, environmental, and climate spillovers. But women still face more economically and socially costly barriers to starting and growing a business than men do. Although female entrepreneurship is growing around the world, male business owners still outnumber female business owners three to one," the articles cites.
According to recent research by the Economics Department of the European Investment Bank, 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. Though female-funded companies get some public support, it mostly comes in the form of startup grants, while access to a wider range of growth finance remains limited. In Europe, only 2 per cent of invested capital goes to all-female founding teams, and only 5 per cent goes to mixed teams. Men-only teams get an astonishing 93 per cent.
Women-owned firms go green and make green
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 European Investment Bank 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.
The shift toward a greener, more digital economy can open up more opportunities for women, because firms that pursue such goals also tend to grow more dynamically, which in turn creates jobs and helps to mainstream practices that promote gender parity. Moreover, there is some evidence that green start-ups are more often established by women.
Beyond increasing the number of women in corporate leadership positions, we also need more women leaders across other parts of the economy. Women investors, for example, are increasingly important, because they have a stronger preference than men for investments that emphasize environmental, social and governance factors. By supporting women as investors, fund managers, and entrepreneurs, we will have a much better chance of accelerating climate solutions – many of which require large-scale investments.
Linking gender to climate investment
The 2X Collaborative’s Gender-smart Climate Finance Guide shows that 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.
"Women care about sustainability, and since they are usually the “chief purchasing officers” within households, they are who the marketers of climate-friendly products need to reach. Hence, the Financial Alliance for Women, a global network of 90 large financial institutions, is exploring how to green the customer-value proposition for women across a broader range of products and services," the article suggests. 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. But policymakers also should do more to help increase women’s participation in the green transition. They can do so by offering affordable, high-quality childcare to parents; increasing support for women-owned enterprises; expanding the financial and networking opportunities available to businesses managed and owned by women; and pursuing measures to eliminate the gender gap in technological industries.
It is critical to remove both the economic barriers that women face, and provide the resources and support they need to succeed. "With more women in business leadership, we can create a more equitable world for everyone, as well as giving humanity a better chance of survival," the article from Barbara attests.
Focused on a broad range of corporate legal matters
Barbara has worked at the EIB for more than 20 years, most recently as General Counsel of the EIB and Director General of the Legal Directorate. She has also been the acting Director General of the EIB's Human Resources Directorate. She has focused on a broad range of corporate legal matters during her career, including policy documents, mandates and borrowing/treasury operations, and also has experience with the Bank’s lending operations, mostly in Central and Eastern Europe. Prior to joining the EIB she was an attorney at law and a member of the bar in Cologne, Germany. She qualified as a lawyer in Germany and completed a Master of Laws degree at the University of Edinburgh, followed by a Doctorate in Law from the University of Bonn.
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Disclosure: Where Women Work researches and publishes insightful evidence about how its paid member organizations support women's equality.