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TOWARDS AN INCLUSIVE GREEN FUTURE
INTRODUCTION Inclusive green finance (IGF) is an evolving policy area aimed at mitigating and building resilience to the impacts of climate change and environmental degradation through financial inclusion. Gender inclusive finance (GIF) aims to increase women’s access to, and usage of, quality and affordable financial services, while reducing the global financial inclusion gender gap. The policy intersection between gender, financial inclusion and climate change is an emerging global opportunity. However, research in this area, both within and outside the AFI network, remains limited. Financial services have the potential to enable lowincome, marginalized, and vulnerable populations to cope with financial losses caused by climate change and environmental degradation. Savings, credit, insurance, money transfers and new digital finance channels are not only adaptation strategies, they also expand access to green technologies and renewable energy sources that can help mitigate climate change. However, structural inequalities, such as the gender gap in access to financial services and formal credit, and the barriers women face in owning land and property, inhibit low-income earners and micro, small and medium-sized enterprises (MSMEs) from accessing these financial services. When these structural inequalities intersect, they have a multiplier effect, creating disproportionate outcomes for women.
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Across developing and emerging economies, there is an average nine percent gender gap in access to formal bank accounts,1 and in some regions the figure is much higher. For example, the average gender gap in the Middle East and North Africa (MENA) region is 17 percent.2 Despite the efforts of policymakers, the global gender gap in financial inclusion has not changed since 2011.
Central banks and regulators now have an opportunity to design gender and climate-sensitive policies to enable financially excluded populations to access financial services, but research on how financial inclusion policies can specifically help women become more resilient to climate change is still limited. This presents the AFI network with an opportunity to develop innovative solutions and regulatory and policy initiatives in this important area. There are synergies between IGF and GIF, but they have not been clearly mapped at a global or national level, and the potential to bring them together to develop gender sensitive and intersectional IGF policies is not yet fully understood. There is, however, a pressing need to promote regulation and policies that strengthen the adaptive capacity and resilience of women to environmental change while empowering them to take part in mitigation efforts and environmental-related decision-making. The purpose of this special report is to examine the intersection between IGF and GIF, with a special emphasis on how to integrate gender considerations into AFI’s 4P Framework on Inclusive Green Finance. The report also highlights the principles enshrined in the Denarau Action Plan (DAP) on Gender and Women’s Financial Inclusion, which was adopted by AFI members at the 2016 AFI Global Policy Forum in Denarau, Fiji, as well as the Sharm El-Sheikh Accord on Climate Change, Financial Inclusion and Green Finance adopted by AFI members at the 2017 AFI Global Policy Forum in Sharm El-Sheikh, Egypt.
1 World Bank. 2017. Global Findex Report. Available at: https:// globalfindex.worldbank.org/ 2 FinDev Gateway. April 2020. Making Digital Finance Work for Women in the MENA Region. Available at: https://www.findevgateway.org/ bhthtqryr/2020/04/making-digital-finance-work-women-mena-region 3 The World Bank Global Findex has only been collecting gender gap data since 2011, and many countries are not included in this survey since they do not yet have this information at the national level. 4 Alliance for Financial Inclusion. 2020. Inclusive Green Finance: A Survey of the Policy Landscape (Second Edition). Available at: https:// www.afi-global.org/publications/inclusive-green-finance-a-survey-ofthe-policy-landscape-second-edition/ 5 Alliance for Financial Inclusion. 2019. Denarau Action Plan. Available at: https://www.afi-global.org/sites/default/files/ publications/2019-07/Denarau_FS19_AW_digital.pdf Aymara woman crossing fields on Isla del Sol (Island Of The Sun), Lake Titicaca, Bolivia. The main economic activity of the approximately 800 families on the island is farming, with fishing and tourism augmenting the subsistence economy (hadynyah/iStock)
