Writing

Frontline communities have been underrepresented and underserved in climate resiliency efforts to date, mirroring their underinvestment in the investment field as a whole.

More and more investors are waking up to the urgency of the climate crisis, using their capital to invest in climate mitigation, adaptation, resilience and biodiversity.

But too much of this investment continues to address climate in isolation, separate to and distinct from the world around it. The truth is that the climate crisis is a human crisis: both in the sense that humans created it, and that its impacts mirror and reinforce existing patterns of inequality.

I’ve always been an environmentalist. I grew up with a real love for nature and especially the ocean – not only for humans, but for all living things – and as a young adult, supported groups like Tree People, Ocean Conservancy, NRDC, and Heal the Bay.

So when my business partner and I sold our company in 1998 and I began using my capital to support other entrepreneurs, it was only natural that sustainability would be one of my key investment themes.

Suzanne Biegel and Sana Kapadia

In October, GenderSmart brought together over 325 asset owners, institutional investors, fund managers, gender experts, and investment intermediaries, from over 40 countries, for our Global Investing Summit.

It was the first time since 2018 that our community had gathered in the same room together. The event was a space for vital action-oriented discussions about everything from climate finance, to gender data and analysis, the care economy, financial inclusion, agriculture and more, against a broader frame of moving gender-smart investing beyond silos and adopting systemic approaches to deploying capital across public and private markets.

Bringing a gender lens to climate investments improves their efficacy across all fronts, including finance, sustainability and equity.

This week and next, governments, business leaders and civil society are meeting for the 27th United Nations Climate Change Conference, more commonly known as COP27.

They will be addressing the trillions of dollars of capital needed for climate mitigation, adaptation and loss and damage — for which an integrated perspective of climate, nature and ecosystem services is essential.

Investing in climate adaptation and mitigation is both a matter of justice and smart business. It’s also something we need to urgently scale up, with a widely reported 2021 study by the World Resources Institute calculating that the world will need to invest $5 trillion a year by 2030 to fund measures to fight climate change.

But it’s not just the amount of capital invested that matters. It’s also how and in what/whom it is invested. Put bluntly, we can’t solve climate change without leveraging the intelligence, innovation, and taking into account the needs of the whole population - and that means paying attention to gender and other forms of diversity, such as race and ethnicity.

We know that at every level, gender-balanced businesses and organisations perform better both financially and on climate: whether it’s companies with gender-diverse boards having lower stock volatility and stronger climate governance and innovation, or gender-balanced representation across companies, political institutions, and civil society being linked to lower CO2 emissions.

With little capital flowing in established economies, and increasing urgency, the time to move money in this direction is now.

When many investors — especially those with a focus on impact, equity and resilience — think about the opportunity to invest with a dual climate and gender lens, their starting point is emerging markets. That’s largely due to the greater amount of storytelling that has been done about the opportunities for growth and impact in this context.

But gender can be a source of rich market opportunity and impact in developed markets such as North America, Europe, Japan and South Korea, and Australia and New Zealand, too. That could mean investing in female innovators and entrepreneurs that other investors are missing due to narrow networks or implicit bias; working with investee companies to make sure products, teams and supply chains reflect the full communities they serve; or leveraging gender and other forms of diversity as a way to deepen environmental and social impact.

Suzanne Biegel and Sana Kapadia

The ways in which money could work harder and refine investment processes and strategies for women, girls and under-represented communities, is a discussion we are having often with investors.

It is our job to equip, influence, and spotlight how they are using, and can use, their resources to choose investments that integrate gender as a factor of analysis, for better financial and social outcomes. Simply put, this is what's known as gender lens investing - and it has never been more urgent. When Roe v Wade was overturned on 24 June, it sent shockwaves through homes, workplaces and communities. Overnight, women in 13 US states no longer had access to abortions, and many more will follow.

We’re officially in a bear market: a moment when investors tend to turn inward, doubling down on the same types of founders, fund managers, and sectors they’ve historically invested in, in the perception that it is safer to invest in what is already familiar and known.

For most investors, this means investing in companies and vehicles that mirror the market as it has been - in companies that are overwhelmingly white, male, and conservative on matters of people and planet - rather than looking to where it will be in the future.

As the climate crisis continues to intensify, attention is turning not just to how we can mitigate and adapt to climate change but how to foster resilience among the communities most affected by it.

We know that the impacts of climate change are distributed unequally, with women, communities of color and the Global South bearing the disproportionate brunt of climate disasters and resource shortages. We also know that climate resilience and financial resilience go hand in hand. If communities aren’t economically stable, they won’t be climate disaster-prepared, whether that means access to well-built green homes, being insured against climate disasters or having safe and accessible water systems or access to energy in the event of a water or energy emergency.

So far in this column, I’ve written about how climate and gender are coming together in private market investment vehicles, and why investing that way isn’t just the right thing to do, it’s the smart thing to do.

But what about the public markets? We know that more capital is deployed through investing in listed companies than anywhere else by institutional and retail investors alike. And it’s well recognized that corporate behavior is both a key driver on climate and a key driver on gender equity.