Prime Highlights
- The report urges greater climate finance for women-led micro and small enterprises.
- It recommends flexible funding models and stronger local investment support.
Key Facts
- The report was developed by Futerra, Project Dandelion, and CARE with support from Strive Women.
- Women-led enterprises work across sectors including clean energy, agriculture, waste, water, and digital services.
Background
Women-led micro and small enterprises (MSEs) play an important role in climate action, but they receive only a small share of global climate finance, according to a new report developed by CARE, Project Dandelion, and Futerra with assistance from Strive Women, a Mastercard Strive program.
The report, The $1 Trillion Blind Spot: Redirecting Climate Finance to Women-Led Solutions, says women-led businesses are already providing climate solutions across sectors such as clean energy, agriculture, waste management, water, and digital services. Nevertheless, even though annually more than USD 1 trillion is invested in climate finance, very little of this amount goes to such enterprises, and less than 5% goes towards climate adaptation.
According to the authors of the study, the problem is not connected with the lack of opportunities for doing business; instead, most of the climate finance is focused on large projects and bigger investments, and thus is hard to obtain for smaller enterprises.
As part of the research, ten economic sectors have been identified where women-led enterprises are contributing to climate change mitigation and building climate resilience: energy access, food systems, water and sanitation, waste management, textiles, financial services, digital services, and nature-based solutions.
The authors call on the financial and investment sector to develop funding models that would better meet the requirements of women-led enterprises thanks to more flexible financing and partnerships with local actors.
Additionally, the researchers urge companies to enhance procurement from women-led enterprises and help their supply chains. Finally, governments, together with multilateral organisations are recommended to make sure that women-led enterprises can tap into climate finance more easily. This should happen via public incentives, plus guarantees, and also by improving the whole financial system’s development.
