A changing climate affects everyone, but it’s the world’s poorest and most vulnerable, predominantly women and girls, who bear the brunt of environmental, economic and social shocks (IPCC, 2022a). For example, figures from the United Nations show that 80% of people displaced by climate change are women (Halton, 2018). There are many reasons as to why women are more adversely affected by climate change than men, but the two main reasons are:

• Women are more dependent on natural resources. Women are often the primary providers of water and food in their households and communities and thus are particularly susceptible to changes in the availability and quality of these resources (GSDRC, 2015). Not only is climate change making it more difficult for women to manage household responsibilities, but it also means that rural women often have to travel further to find these resources. These women end up having less time to pursue other opportunities, such as education or income generating activities, thus preventing them from becoming economically independent.
• Women and girls already face inequalities and discrimination and are less able to cope, which is exacerbated when natural disasters strike. Women generally have far less access to, and control over, financial resources. Women tend to earn 24% less than men globally and 178 countries (out of 195) maintain legal barriers that prevent women’s full economic participation (Oxfam, n/d; World Bank, 2022). This limits their ability In addition, women face protection risks in the aftermath of a disaster: unequal access to assistance, discrimination in aid provision, loss of documentation and a heightened risk of sexual, gender-based violence and exploitation, including trafficking, in disaster relief camps (Brookings, 2016).

Financial service providers (FSPs) have a key role to play in financing the transition to a more sustainable, inclusive economy and giving women access to a greater range of financial services to boost their resilience and economic welfare, for example through insurance and/or credit, can help them become economically independent and improve their ability to recover from natural disasters. In addition, targeting and involving women equitably in the design and implementation of existing climate finance mechanisms would help ensure the sustainability and effectiveness of such mechanisms.

The newly published IPCC report highlights the fact that women have a wealth of local knowledge of and leadership in sustainable resource and disaster mitigation and management at both the household and community level. This knowledge can and should be leveraged to address climate change, particularly when it comes to the design of climate specific financial services and solutions. Increasing women’s participation at the political level also results in greater responsiveness to citizen’s needs, increasing cooperation across party and ethnic lines and thereby improved outcomes of climate related projects and policies (IPCC, 2022b; UNDP, 2016). While there has been some integration of gender considerations into multilateral climate finance mechanisms, such as the Green Climate Fund and the Clean Investment Funds (CIF), much more needs to be done.

The IPCC report emphasises the critical role women can play in addressing climate change and the need for gender-sensitive climate change policies, plans and budgets.

• Developing appropriate products that take both climate and gender considerations into account, and help women manage and recover from climate challenges and improve their welfare. For example, an early warning system linked to a portfolio of financial products, such as flood risk information bundled with flexible credit, insurance and/or targeted savings products, as well as non-financial services such as education/training interventions will help women to mitigate and manage disasters. This also requires that FSPs make a point of understanding the unique needs of women and encourage the participation and leadership of women in product and service design and delivery processes, to really enhance the value proposition of their products. For example, tapping into the patterns in women’s professional and domestic lives (e.g. maternity, healthcare, childcare etc.) will allow FSPs to unlock untapped opportunities.
• Collaboration among providers and with government. FSPs should engage in collective policy advocacy to ensure that government establishes an enabling environment for gender equality and climate action through the financial sector. For example, advocating for policies and interventions that reduce the cost to serve women living in remote and rural locations or adopting a risk-based approach to innovation, customer identification and verification requirements, since underserved women often lack formal documentation.

It is imperative to recognise the fact that women and girls are effective and powerful leaders and change-makers for climate adaptation and mitigation. Failing to do so means that a sustainable, and equal, future remains out of our reach.