Climate + Finance: a perfect storm for gender inequity
GreenPortfolio’s COO and Co-Founder shares her thoughts on gender inequity as it relates to climate change, why it’s a problem, and what we as a company are doing about it.
By Elizabeth Landau
March 8, 2023
On March 8th, women are recognized globally as part of International Women’s Day, with this year’s theme being “Embrace Equity.” Instead of devoting one day to focus on women, I would prefer the theme of equity to be integrated throughout the whole calendar year so we can discuss the accolades of men and women at roughly the same cadence year round. But since we have this day, I’d like to use it for reflection, inspiration, and action.
While inequity exists in many industries, places, and societies, let’s dive into how inequity exists in the world relative to climate change, reasons to improve, and what part GreenPortfolio is playing to help.
Inequity when it comes to climate
Climate change is a major crisis plaguing my millennial generation, but not everyone will feel the effects of climate change the same way. Women tend to be disproportionately affected by climate change since the impacts of global warming intensify other inequalities that exist. The effect on agriculture can be felt acutely — not only is that a leading industry for women in low-income countries, but it is also a source of food for women to rely on as primary caregivers. As droughts, floods, and extreme weather events occur, it increases a woman’s burden and can lead to their daughters joining them in household responsibilities instead of attending school.
Despite the disproportionate effects, there’s a lack of women leadership at the negotiating table. At COP27, the global UN climate summit, BBC found that women accounted for less than 34% of negotiating teams in 2022. Plus, look at this photo from the summit: 7 out of the 110 leaders were women. We can do better.
Innovation drives solutions to the world’s biggest problems, but women founders generally receive less funding than their male counterparts. In 2022, startups founded solely by women received 2.1% of venture capital invested in startups. However, women-founded startups make up ~14% of startups, which means we are far from equity. If we look specifically at the climate tech sector, GreenBiz reports numbers from Pitchbook that are troubling. In the first three quarters of 2022, only 5.4% of all deals in climate tech went to female founders. That’s 128 for women vs. 2,232 for men.
A case for improvement and change
To state the obvious, half of the population isn’t proportionately represented in discussions that are supposed to address climate change. Let’s make sure the gender that is most affected has a place to be heard. We can facilitate female leadership in a corporate setting.
When women do have a seat at the table, there tend to be better outcomes for the climate. A recent study by the European Central Bank shows that banks with more women on their boards hold fewer investments in companies that harm the environment. The study also established that the “greening” impact of gender-diverse boardrooms was greater in countries with more female politicians with proactive approaches to climate change.
Women aren’t just theorizing on how to improve — they have solutions, are implementing them, and are doing it well! First Round Capital found that startups with at least one female founder outperformed male-founded companies by 63%. This success isn’t just in the short-term. BCG and MassChallenge reported that “startups founded or co-founded by women generated 10% more in cumulative revenue over a 5-year period” than those founded by men.
While the stats above are not solely focused on climate tech, capital should also flow to women in this sector because female leadership is good for the environment, and startups with women perform better financially. If climate change is a problem we want to solve, the smart thing to do is to invest in women-founded climate tech companies.
Let’s not forget about the world of finance
As a woman who has always worked in male-dominated industries, I’m proud to be tackling two topics — climate and finance — where women don’t generally have the upper hand. Only 0.7% of assets under management in the US are managed by women. With roughly 85% of consumer purchasing decisions being driven by women, the financial power should be more equally distributed.
Your money can be your most valuable tool to fight climate change — if you know where to put it. GreenPortfolio is your guide for climate-friendly financial decision making. We help you avoid funding fossil fuel projects and find companies, banks, and services that have a positive climate impact. Through GreenPortfolio’s Climate Hub, we can aggregate your individual action into collective pressure on corporations and institutions and decarbonize $4 trillion in retail financial assets to slow the effects of climate change.
I’m also very excited for GreenPortfolio’s upcoming series this month, which will highlight women founders in climate fintech. Stay tuned to learn more…
Igniting a movement towards gender equity in climate and finance
The first step is always to build awareness, but to really advance progress we need to find our allies. If women are simply speaking into an echo chamber, what good will that do? So, where are all my male allies who are ready to get involved? I know I’ve already found some as investors, advisors, and teammates, but we need just as many male voices as female in the chorus to move the needle on gender inequity in the climate space.
Are you addressing inequity in your organization’s policies and practices? For reference, gender equity is integrated into our business strategy. As women in this space, we are always keeping an eye open for how we can open doors for individuals of all underrepresented groups. Let’s be transparent about our staffing at GreenPortfolio:
It’s time to lead by example. Here’s to hoping that my thoughts inspire some true action, not just empowerment and mentorship. And next time you write about how women raised a nominal percentage of capital, don’t call it a “banner year.” Until there is true equity, the market is undervaluing innovation and ingenuity.
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