SuStainablefinance benefitS from a gender lenS

This brief explains that women constitute 70% of the world’s 1.3 billion poor people and considers the challenges they face to access financing and play a role in climate mitigation and adaptation decisions. It sets out ways financial institutions can weave gender into their lending processes, strategy, product development, and data analysis to increase the role of women in green finance and bolster their long-term resilience.

The majority (60%) of micro, small, and medium-sized enterprises in Asia and the Pacific are women-led businesses.However, they often face difficulties getting loans as climate finance providers prefer investing in large scale projects.

Category Action
Corporate strategy Reflect climate-and environment-related risk exposure, integrate gender-responsive targets, and facilitate a just transition Governance Establish responsibilities that will enable the conduct of climate-and environment-related risk management and provide resources for the design of gender-responsive products and services   2 and 3).

Gender Barriers Potential Product
• Lack of assets for collateral and lack of a credit track record • Use of alternative forms of collateral, such as assets to be financed • Lack of formal identification and inability to supply proof of identity for the Know Your Customer requirement • Flexible documentary requirements and guidance • Inappropriate product design that does not address women's needs • Repayment terms based on the cash flow of women and the impact of disasters on the cash flow • Reduced mobility due to time constraints or social norms • Quick disbursal with option to release to women's e-wallet

Gender Barriers Potential Product
• Lack of bargaining power within the household • Inability to fend off demands from family members • Must be to a specific commitment goal, i.e., withdrawable only when the goal is met • Concentration on lower-paying economic activities.
• Lack of formal identification • Require a small amount and flexible and minimal documents for opening an account • Competing demands on women's time • Reduced mobility due to time constraints or social norms • For digital savings, cash-in, cash-out modes should be available via channels that are accessible for women (e.g., convenience stores, rural agents, and others).
• Low utility perception of a savings account

Growing Interest in Sustainable Finance with a Gender Lens
In recent years, the number of sustainable finance instruments, such as green, social, and sustainability bonds, has been increasing.The growing interest of investors in these instruments highlights the opportunity for scaling up gender lens investing in Asia and the Pacific.
The following are examples of sustainable finance with a gender lens in Asia and the Pacific.
• The Asian Development Bank (ADB)-financed India Infoline Finance Limited (IIFL) Supporting Access to Affordable Green Housing for Women Project in India provides housing loans to women from economically weaker sections and low-income groups.IIFL Home Finance Limited encourages female property ownership by offering a special incentivized interest rate if a property is purchased by a female borrower or co-borrower.The company also developed a digital application with a rule engine that makes one female applicant mandatory.
• The ADB-assisted Bank of Qingdao Blue Finance Project is a blue loan supporting marine environment protection and sustainable blue economies in the People's Republic of China.The project aims to increase women's access to blue finance through targeted outreach and by introducing a gender lens to Bank of Qingdao's lending, including training loan officers on how to better serve women borrowers.
• The ADB-financed Ping An Leasing Micro, Small, and Medium-Sized Enterprises Energy Efficiency Improvement Project funded the lease of energy-efficient equipment to micro, small, and medium-sized enterprises (MSMEs), especially those owned by women, in the People's Republic of China.Leasing makes energy-efficient equipment more accessible for women's MSMEs because it does not require additional collateral.It also entails lower payments than financing, which is more compatible with smaller businesses that women tend to own.
• The Joint Stock Company Microfinance Organization Crystal (Crystal)-issued gender bond worth GEL25 million (around $9.5 million) will finance women-owned MSMEs in Georgia.The proceeds will support women entrepreneurs with sustainable finance, including climate-change loans to purchase small energy-efficient and renewable energy equipment.

Guidance and Tools for Financial Institutions to Accelerate Gender Equality
Several guidance notes and tools are available to enable financial institutions to track the gender impact of their investments, encourage them to integrate gender targets in overall commitments to climate change, and help them assess women's economic empowerment and gender equality in businesses.Some of these guidance and tools include: • Tip Sheet for Accelerating Gender Equality in the Finance Sector

Table 1 : Integrating Climate-and Environment-Related Risk Preparedness with a Gender Lens Processes.
Incorporate gender-sensitive metrics into the financial analysis and sustainability selection criteria at loan origination and portfolio management to enhance risk management.For instance, gender considerations could be integrated into the eligibility criteria of the use of type of credit instruments.6

Table 2 : Features to Consider in Designing Credit Products for Women Table 3: Features of Tailored Savings Plans to Prepare for Disasters • Data and analytics.
Collect sex-disaggregated data during the initial due diligence process and monitor these throughout implementation.7Thiswill enable financial institutions to increase accountability and transparency while reinforcing the business case for gender-inclusive sustainable finance.
6 Fair Finance Asia.2022 Strengthen Financial Due Diligence to Protect Women's Rights in ASEAN, Fair Finance Asia Urges.Press Release.21 October. 7ICMA, International Finance Corporation, and UN Women.2021.Bonds to Bridge the Gender Gap: A Practitioner's Guide to Using Sustainable Debt for Gender Equality.Zurich.Source: ADB.2022.Financial Instruments to Strengthen Women's Economic Resilience to Climate Change and Disaster Risks.Manila.Source: ADB.2022.Financial Instruments to Strengthen Women's Economic Resilience to Climate Change and Disaster Risks.Manila.
• Tip Sheet for Accelerating Gender Equality in the Renewable Energy Sector • Guidance on Gender Equality Target Setting • UNEP FI Portfolio Impact Analysis Tool • 2X Global Gender and Climate Finance Toolkit • The 2X Challenge -Financing for Women provides a set of gender-relevant indicators.• The Social Bond Principles, the Sustainability Bond Guidelines, and the Sustainability-linked Bond Principles provide guidance for capital market issuers, in addition to the frameworks used in the Social Loan Principles and the Sustainability-linked Loan Principles.