In the photo: Streets flood at the Ebeye, Marshall Islands
Over 57 million people were affected by disasters caused by climate change in 2021 in the Asia Pacific region alone. (International Federation of Red Cross and Red Crescent Societies, 2021) . Women in developing countries are often disproportionately affected by climate change as they are more reliant than men on natural resources that may be impacted by climate disasters. Sustainable finance ensures better environmental outcome, and is, therefore, crucial to overcome these challenges. The shift towards a green economy is estimated to require around $1 trillion of investments annually and could yield direct economic gains of $26 trillion by 2030.
According to 2x Climate Finance Taskforce Sector study, women entrepreneurs are more likely to start businesses with a sustainable focus but they also face significantly larger challenges, compared to men, in accessing finance or affordable goods and assets (Investing in Financial Services 2021). It is, therefore, imperative not only to improve financial inclusion of women but also to make them more sustainable and resilient to climate change and other calamities.
However, introducing new digital financial services, specifically gender-responsive sustainable finance, will require the development, piloting and implementation of innovative, scalable, and commercially viable financial risk management products that incentivise financial institutions to increase investments in climate change mitigation, adaptation, and disaster risk prevention with a focus on women-owned medium- and small-sized enterprises.
In this regard, WFX will:
support financial institutions in “greening their portfolios” and in making better informed credit decisions led by sustainability and gender considerations,
identify innovative technology solutions promoting sustainable and gender-based practices,
pilot innovative financing solutions with a sustainable and gender focus, and
raise awareness and share knowledge on ADB’s work supporting sustainable finance and women.