Article Building the future we choose

Let’s picture 2044. The world is just 6 years shy of the 2050 Net Zero¹ goal set out in the Paris Agreement.² We have rallied as a global community to create a more sustainable planet, inclusive business models, more just investment structures, and an inclusive society. Since 2025, climate finance has kept pace with global demand, such that USD 10tr each year³ has been added from 2031 onward, helping to avoid the most-severe impacts of climate change. Moreover, where once less than 1% of the USD 1.3tr in global climate finance was tagged as gender-smart, now in 2044 it’s close to a quarter. Back in 2020, it was estimated that USD 1.8tr⁴ invested in adaptation and resilience could generate USD 7.1tr in overall net benefits—this has not only been met but exceeded by double the amount. In this future the world is cleaner, greener, and more equitable for all.

If we are grounded in today’s gender-smart climate actions

The future painted above can become reality. But achieving it requires steering climate flows and actions we take today both through a gender and inclusion lens and more broadly by adopting more systems-level perspectives. What that means is undertaking gender analysis alongside financial analysis— acknowledging the materiality of gender—for enhanced financial, business, and social outcomes. When it comes to climate change, women, especially women of color, and girls will suffer disproportionately⁵ due to a variety of social, cultural, and economic factors. At the same time, women are at the forefront of solutions for the climate crisis and are agents of change ⁶ —as innovators, leaders, entrepreneurs, workers, and customers. Applying a gender lens to climate finance enables the delivery of climate outcomes while promoting gender equality and women’s empowerment. Some markers of the opportunity for climate finance include the need for USD 23tr⁷ in emerging markets alone to meet targets under the Paris Agreement.⁸

What is the “smart” in gender-smart climate finance?

• Better for business: A gender-just transition to a net-zero economy⁹ can be worked towards by helping businesses develop gender-aware and transformative climate actions across their value chains. For example, research illustrates that companies with women making up at least a third of board directors have lower emissions growth rates¹⁰ (0.6% compared with 3.5% with no women on the board).
• Better for the global economy: To achieve the UN Sustainable Development Goals (SDGs) and net zero goals, it is crucial that the millions of green jobs¹¹ created deliver fair incomes, security, and social protection for both women and men, thereby reducing gendered labor market gaps. This will also enable women to participate more equally in the benefits brought about by the green transition, which could add USD 28tr¹² in GDP growth by 2025.
• Better for health and social outcomes: The transition to an energy system aligned with the Paris Agreement can help avoid more than 100 million¹³ premature deaths from air pollution over the 21st century, of which roughly 60%¹⁴ affect women and children.

Taking that next step in the gender and climate finance journey

• To build knowledge and greater capacity around the how/what/why, one can utilize various tools, reports, and frameworks such as those available on 2X Global’s Knowledge Hub.
• More equal access to capital has the power to change the world. Having more women and diverse allocators deploying capital is key, as is ensuring the financial services industry is doing all it can to unlock this significant opportunity. This is underpinned by women’s rapidly rising ownership and control of wealth (expected to be 35% by 2025 ). This increase in wealth, coupled with women’s more sustainability and impact-oriented investment approaches could mean that if women invested at the same rate as men, there could be more than USD 3.22tr of additional capital to invest globally by women, and likely would flow into these sustainability and impact-oriented sectors.
• Learning from “lighthouse” examples that other wealth holders and investors have created is important. One such example is Suzanne Biegel’s endowment Heading for Change, a multi-asset class demonstration portfolio that provides investments and grants to advance both climate and biodiversity solutions and gender equity.
• Finally, in keeping with this future-forward theme, to explore what it means to future proof your portfolio and overall approach, check out “Envisioning Fair Futures,” which presents four hypothetical but plausible (or even in-motion) futures factoring in political considerations, and seen though a gender and climate lens. Their handy workbooks spark imagination, help visualize how a future scenario might impact the current and future investment context and encourage reflection on the link between gender and climate finance.

Building the future we choose, requires embracing possibility and systemic approaches. Integrating a gender perspective and using a broader inclusion and social lens can help us not only imagine, but also realize the end goal of a more just, sustainable, and equal world that works for all.

The author is grateful for feedback from: Jackie Bauer, Emma Wheeler, Amantia Muhedini, Michelle Laliberte, Richard Mylles, William Nicolle, Mike Ryan.

For further information, please visit www.ubs.com/institute-disclaimer