Editing IPCC:AR6/WGIII/Chapter-15 (section)

==== 15.6.8.3 Exploring Gender-responsive Climate Finance ====

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Global and national recognition of the lack of finance for women has led to increasing emphasis on financial inclusion for women ( ''high confidence'' ). Currently, it is estimated that 980 million women are excluded from formal financial system ( [[#Miles--2018|Miles and Wiedmaier-Pfister 2018]] ); and there is a 9% gender gap in financial access across developing countries ( [[#Demirguc-Kunt--2018|Demirguc-Kunt et al. 2018]] ). This gender gap is the percentage difference between men and women with bank accounts as measured and reported in the Global Financial Inclusion (Global Findex) database. Policies and frameworks to expand and enhance financial inclusion also extend to the area of climate finance ( ''high confidence'' ). Since AR5, there remain many questions and not enough evidence on the gender, distribution and allocative effectiveness of climate finance in the context of gender equality and women’s empowerment (Williams M., 2015; [[#Chan--2018|Chan et al. 2018]] ; [[#Wong--2019|Wong et al. 2019]] ). Nonetheless, the existing global policy framework (entry points, policy priorities, etc.) of climate funds is gradually improving in order to support women’s financial inclusion in both the public and the private dimensions of climate finance/investment ( [[#Schalatek--2015|Schalatek 2015]] ; [[#Chan--2018|Chan et al. 2018]] ; [[#Schalatek--2020|Schalatek 2020]] ). At the level of public multilateral climate funds, there have been significant improvements in integrating gender equality and women’s empowerment issues in the governance structures, policies, project approval and implementation processes of existing multilateral climate funds such as the UNFCCC’s funds managed by the Global Environment Facility, the Green Climate Fund and the World Bank’s CIFs ( ''high confidence'' ) ( [[#Schalatek--2015|Schalatek 2015]] ; Williams M., 2015; [[#Sellers--2016|Sellers 2016]] ; [[#GCF--2017|GCF 2017]] ). But according to a recent evaluation report, the integration of gender into operational policies and programmes is fragmented and there is lack of an ‘adequate, systematic and comprehensive gender equality approach for the allocation and distribution of funds for projects and programmes on the ground’ ( [[#GEF%20Independent%20Evaluation%20Office--2017|GEF Independent Evaluation Office 2017]] ; [[#Schalatek--2018|Schalatek 2018]] ). The review found that ‘almost half of the analysed sample of 70 climate projects were judged to be largely gender-blind, and only 5% considered to have successfully mainstreamed gender, including in two Least Developed Countries Fund adaptation projects’ ( [[#GEF%20Independent%20Evaluation%20Office--2017|GEF Independent Evaluation Office 2017]] ; [[#Schalatek--2018|Schalatek 2018]] ). While the GCF requires funding proposals to consider gender impact as part of their investment framework, [[#footnote-001|16]] the fund does not have its own funding stream targeted to women’s project on the ground, nor is there as yet an evaluation as to how entities are actually implementing gender action plan in the projects. In the case of the CIFs, as noted by [[#Schalatek--2018|Schalatek (2018)]] , ‘gender is not included in the operational principles of the Pilot Program on Climate Resilience (PPCR), which funds programmatic adaptation portfolios in a few developing countries, although most pilot countries have included some gender dimensions’. And, ‘gender is not integrated into the operations of the Clean Technology Fund (CTF), which finances large-scale mitigation in large economies and accounts for 70% of the CIFs’ pledged funding portfolio of 8.2 billion USD’ ( [[#Schalatek--2018|Schalatek 2018]] ). However, both the Forest Investment Program (FIP) and the Scaling-Up Renewable Energy in Low-Income Countries Program (SREP) have integrated gender equality as either a co-benefit or core criteria of these programmes ( [[#Schalatek--2018|Schalatek 2018]] ).

Overall, efforts to promote gender responsive/sensitive climate finance, at national and local levels, both in the public and private dimensions and more specifically in mitigation-oriented sectors such as clean and renewable energy, remain deficient ( ''high confidence'' ). Recent developments in the capital markets in the areas of social bond are focused around gender bonds – debt instruments targeted to activities and behaviours that are relevant to gender equality and women’s empowerment. These bonds are aligned with Sustainability-linked Bonds as well as Social Bonds Principles of the International Capital Market Association. Issuances of gender-labelled bonds are increasing in the Asia Pacific region (the most comprehensive initiative is the Impact Investment Exchange’s (IIX) multi-country USD150 million Women’s Livelihood Bond [[#footnote-000|17]] ) and in Latin America, Colombia, Mexico and Panama each have gender bond issuances). Additionally, a few developing countries, such as Pakistan (May 2021) and Morocco (March 2021) have issued gender bond guidelines for financial market participants.

'''Linkage to sectoral climate change issues and gender and climate finance.''' Subsets of actions designed to enhance women’s more formal integration into climate policies, programmes and actions by the global private sector include: investment in clean energy, redirecting funds to support women and vulnerable regions as a component of social and green bonds as well as insurance for climate risk management. In the latter context, insurance providers are arguing that ‘given the fact that women are disproportionately affected by climate change, there could be new finance innovations to address this gap’.( [[#Miles--2018|Miles and Wiedmaier-Pfister 2018]] ). AXA and IFC estimate that the global women’s insurance market has the opportunity to grow to three times its current size, to UDS1.7 trillion by 2030 (AXA Group et al. 2015; GIZ et al. 2017). However, across the board, and in particular with regard to public funds, despite improvements in the substantive gender sensitisation and operational gender responsiveness of multilateral and bilateral climate finance funds operations, current flows of public and climate finance do not seem to be going to women and local communities in significant amounts ( [[#Chan--2018|Chan et al. 2018]] ; [[#Schalatek--2020|Schalatek 2020]] ). At the same time, evaluations of the effectiveness of climate finance show that equitable flow of climate finance can play an important role in levelling the playing field and in enabling women and men to successfully respond to climate change and to enable the success and sustainability of local response in ensuring effective and sustainable climate strategies that can contribute to the global goals of the Paris Agreement ( [[#Minniti--2010|Minniti and Naudé 2010]] ; [[#Bird--2013|Bird et al. 2013]] ; [[#Barrett--2014|Barrett 2014]] ; [[#Eastin--2018|Eastin 2018]] ). This is particularly, so in the case of female-owned MSMEs, who, the literature increasingly shows, are key to promoting resilience at micro and macro scale in many developing countries ( [[#Omolo--2017|Omolo et al. 2017]] ; [[#Atela--2018|Atela et al. 2018]] ; Crick, F. et al. 2018).

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