by Najada Kumbuli, Officer, Strategic Initiatives at Calvert Foundation
Are you a millennial? I have bad news and good news for you. The bad news is that climate change and gender equality — two key issues you care about — will cost our generation over $30 trillion*; that is the equivalent of the American, Chinese and Japanese economies combined. The good news is that, while scary, we can use our voices and investable assets to create real change, quickly!
Until recently, climate change and gender equality were considered as two very important, yet independent issues. The reality though is different: climate change, and in particular energy poverty is interlinked with gender equality and women’s rights issues, especially in developing countries. We have made progress in quantifying the price tag for inaction on climate change and for inaction on gender equality. We have also made progress in connecting these two seemingly independent issues in order to develop a framework to address their challenges simultaneously.
In 2009, the UN Population Fund undertook in-depth research on the relationship between women and climate change in its annual report, concluding that women “are among the most vulnerable to climate change, partly because in many countries they make up the larger share of the agricultural work force and partly because they tend to have access to fewer income-earning opportunities.”
Yet in my mind, the biggest and boldest opportunity lies in adding a third dimension to addressing the nexus between climate change and gender equality — engaging young investors, in particular women investors, to become agents of change by utilizing their voices and assets to lead to systemic and sustainable change to these issues.
1. Why Should We Invest in Climate Change?
Investing in climate change is a financial as well as a social and environmental imperative. The opportunity cost of inaction is detrimental to our generation (as described above) while the social and environmental argument does not leave room for interpretation.
Scientists often point to ongoing new evidence that climate change will drive some of the most populated cities in the United States underwater. New York, Boston and Miami are all at great risk. While the impact of climate change varies even within cities, it puts residents of poor neighborhoods everywhere at greatest risk of suffering from climate related shocks, including internationally. Such residents will remain on the forefront of human-induced climate change over the next century. The poorest countries are projected to continue experiencing gradual rises in sea level, hotter days and nights, more unpredictable rains and cyclones, and larger and longer heat waves, according to the Intergovernmental Panel on Climate Change.
To put it in context, according to OECD climate change is expected to further reduce access to drinking water, negatively affecting the health of poor people, and will pose a real threat to food security in many countries in Africa, Asia, and Latin America. In some areas where livelihood choices are limited, decreasing crop yields will threaten famines, or where loss of landmass in coastal areas is anticipated, migration might be the only solution.
2. Why Should We Invest in the Nexus of Climate Change and Women Empowerment?
Women form a disproportionately large share of the poor in countries all over the world. Women form approximately 50 percent of the world’s population yet 75 percent of the people in energy poverty are women. Why? Women in rural areas in developing countries are highly dependent on local natural resources for their livelihood, because of their responsibility to secure water, food and energy for cooking and heating.
On average, 63 percent of rural households depend on women to obtain drinking water for the home. Research shows that women spend up to 20 hours a week gathering biomass (wood, dung, crop waste) and drinking water, instead of going to school, learning and improving their lives. As climate change directly impacts the water availability, the amount of time dedicated to collecting water might increase, leaving women and girls with even less time to go to school and reinforcing the cycle of poverty.
Women also form the majority of the 3 billion people that still use traditional biomass as their main source of energy. Experts at the University of California, Berkeley calculate that having an open biomass fire in your kitchen is equivalent to burning 400 cigarettes an hour. More importantly, WHO reports that exposure to indoor air pollution is responsible for over 4 million deaths a year, easily making it the most critical environmental killer humans face – more death than Malaria, HIV/AIDS, and lung cancer combined.
The effects of climate change make it harder to secure these resources — a burden which further exacerbates women’s and children’s lives. By comparison to men in poor countries, women face historical disadvantages, which include limited access to decision-making and economic assets that compound the challenges of climate change.
It is therefore critical that a gender lens be applied to all actions on climate change and that gender experts are consulted in climate change decision making at all levels, so that everyone’s needs (women’s and men’s) and priorities are identified and addressed from the very beginning.
3. How Can We Invest in Climate Change and Women Empowerment Simultaneously?
This is one of the key questions and reasons that make me excited to go to work everyday! We at Calvert Foundation embarked on the journey of moving the dialogue from the why to the how investing in the nexus of climate change and women empowerment in early 2015 through our Women Investing in Women Initiative (WIN-WIN). Through this investment initiative we are working to channel pools of capital towards positive impact in gender equality and clean energy.
Building off the success of the responsible investment movement, impact investing is perfectly positioned to create deeper engagement between an individual’s values and her investment portfolio. In the same way that purchasing decisions — the car you drive, the clothes you wear — suggest a certain set of values, an investment product can represent your values and the impact you want to have on the world. If you are passionate about climate change and/or gender issues, then why not invest in solutions to addressing these issues simultaneously.
Fortunately, research points that millennials want to align their assets with their values. Nearly 80 percent of millenials and 88 percent of women want to invest for impact, particularly climate change and gender related issues. There is a number of investment opportunities that enable investors to align their assets with their values — we launched WIN-WIN as an opportunity to target their dollars towards women and clean energy. By doing so, investors can express their values through their investable assets and shift the conversation around gender lens investing in the climate change space.
We particularly need to increase women’s participation as investors to new levels. We also need to engage women as policy makers at the national and international level. Recently, there has been a small but steady increase in the representation of women that participate — as delegates and in leading roles — at climate negotiations. From 2008 to 2014, women delegates representing nations at the UN Framework Convention on Climate Change rose from 33 to 38 percent, while women’s participation as Heads of Delegations increased from 18 to 26 percent.
While you can’t guarantee that a woman in a leadership position will make a decision based on gender-equality or low-carbon pathways, it is still important to have women in decision-making positions when we’re talking about something as important as inclusive and sustainable development in the next 15 or 20 years.
The same goes for including women in leadership roles at the company level. Research points to stronger profits for companies that are led by female executives and the same goes for companies that care about climate change.
While women in developing countries face the brunt of climate change, they are better positioned and should be encouraged to be involved in the design and distribution of climate solutions. It has been proven that social enterprises that adopt more gender inclusive models do better than their counterparts that don’t.
Through Calvert Foundation’s work lending to social enterprises to produce and distribute clean energy solutions in off grid communities round the world, we have learned that women hold important decision-making power when it comes to purchasing household products. They may not be the one actually engaging in the purchasing transaction but they do heavily influence the decision point. As a result, educating and engaging women on the importance of using these solutions is critical in making progress in the up-take of products like solar systems, clean cook stoves or water filters.
Article by Najada Kumbuli. She works on the design, management, partnerships and communications around new investment initiatives and incubator portfolios within Calvert Foundation’s Strategic Initiatives mandate (www.CalvertFoundation.org). She is responsible for the origination of new investments and management of credit quality within the incubator portfolios. This portfolio is comprised of microfinance institutions and intermediary vehicles, ventures in sustainable agriculture, and small to medium enterprises providing access to clean water and renewable energy to the base of the pyramid.
Prior to joining Calvert Foundation, Najada worked as a Project Assistant for the Central and Eastern European team at the National Democratic Institute for International Affairs. She also worked with Community Reinvestment Fund and had done international development work in Kenya, Cambodia and Albania. She received a B.A. in Economics from Macalester College in Minnesota.
* The cost of inaction: Recognizing the value at risk from climate change: https://www.eiuperspectives.economist.com/sites/default/files/The%20cost%20of%20inaction_0.pdf
Gender Inequality costs as much as the American and Chinese economies combined: http://new.time.com/4045115/gender-inequality-economy/
52nd session of the Commission on the Status of Women (2008) “Gender perspectives on climate change,” Issues paper for interactive expert panel on Emerging issues, trends and new approaches to issues affecting the situation of women or equality between women and men. http://www.un.org/womenwatch/daw/csw/csw52/issuespapers/Gender%20and%20climate%20change%20paper%20final.pdf