Women and sustainable finance: fuel for the engine of COVID recovery

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Professor Durreen Shahnaz, CEO, Impact Investment Exchange (IIX) & Marius Døcker, Managing Director, Business for Peace & Katharine Tapley, Head of Sustainable Finance, ANZ


  • COVID-19 has had a disproportionate impact on women-focused small and medium-sized enterprises (WSMEs).
  • The Asia-Pacific region alone has over 50 million WSMEs, mostly in the micro, small and medium range that provide employment to over 100 million people. They form the backbone of the economy’s success.
  • Investors are doubling down on inclusive growth and at the same time, businesses are building innovative pathways to COVID resilience for underserved women.

There is broad consensus on the need to intervene as a matter of urgency, in order to provide relief for women and underserved communities. However, governments and businesses have the opportunity to go one step beyond, and build the kind of resilience that will outlast any pandemic.

Across the Global South, COVID-19 has had a disproportionate impact on women-focused small and medium-sized enterprises (WSMEs). The unprecedented social and economic changes brought about by the COVID-19 pandemic have put an increased burden on women.

Many face disproportionate responsibilities at home, are experiencing increased unemployment rates and are struggling to maintain their businesses. To add insult to injury, they are being overlooked by COVID-response policies that may even exacerbate home-based violence.

The Asia-Pacific region alone has over 50 million WSMEs, mostly in the micro, small and medium range that provide employment to over 100 million people. They form the backbone of the economy’s success. Women can power the engine for recovery if we step up. Enter sustainable finance.

Sustainable finance: a movement whose time has come

The pandemic-driven surge in social bonds has proven that investors are doubling down on inclusive growth. 2020 represented key milestones in the sustainable finance market – with social and sustainability bond issuances surpassing green bonds for the first time in April 2020.

These trends are promising, but they are not enough. At the end of 2020, the United Nations Conference on Trade and Development (UNCTAD) reported that international private-sector investment in areas related to the Sustainable Development Goals had fallen by 30% in developing economies, with the poorest countries grappling with pre-2015 levels of SDG investment activity.

In the Asia-Pacific region, the challenges are particularly tough:

  • The pandemic has affected the livelihoods of more than 65% of those living in rural underserved communities and over 100 million entrepreneurs.
  • 85% of WSMEs are at risk of bankruptcy across frontier markets.
  • 50% of WSMEs do not have access to capital for business operations across South and Southeast Asia.

Building resilience through finance

To close these gaps, businesses are building innovative pathways to COVID resilience for underserved women. Here are four promising trends that are bringing females to the forefront of capital markets.

1. Mega cross-border alliances

An alliance of 84 global leaders have convened since April 2020 under the World Economic Forum’s COVID-Response Alliance. Their aim? To harness the resources and collective strengths of the public and private sectors, in a bid to ensure that the world responds effectively to underserved communities.

Together with members ranging from Impact Investment Exchange (IIX) to Salesforce and the USAID Center for Innovation and Impact, the Alliance launched a 2021 Roadmap during the Davos Agenda that will drive critical resources – both financial and non-financial – for social entrepreneurs who are advancing inclusive recovery around the world.

2. A lens on gender

IIX built on its successful launch of the Women’s Livelihood Bond Series (the world’s first gender lens and impact-investing instrument to be listed on a stock exchange) when it closed its third Bond and raised an unprecedented $27.7 million in private capital for 180,000 underserved women. It did all this in the midst of a pandemic, determined to empower women to become agents of COVID relief, recovery and resilience.

ANZ took a pioneering role as the lead placement agent, and demonstrated to the world that Australian and New Zealand institutional investors, family offices, and high net-worth individuals are at the forefront of impact investing. These investors were attracted to the bond for its innovative structure and gender-lens outcomes.

Other partners that comprise the growing movement to scale the Women’s Livelihood Bond Series include: USAID and DFC, Shearman & Sterling, Latham & Watkins, Global Affairs Canada (GAC), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the United Nations Capital Development Fund (UNCDF).

3. Bolstering existing commitments

The fact that the United Nations has made 2021’s International Women’s Day about ‘Women in leadership: Achieving an equal future in a COVID-19 world’ pays heed to the fact that women are not only underrepresented in leadership in politics, but also in boardrooms the world over.

Research shows a clear positive link between board-gender diversity and firm performance. Integral to the vital issue of female leadership is the question of women’s economic empowerment on a global scale. It is not only key to gender equality and to growing economies, but also to reaching the Sustainable Development Goals.

The Business for Peace Foundation is working to accelerate women’s economic empowerment to ensure more ‘business-worthy’ corporate operations. Businesses must serve a higher social purpose, and a new and broader mindset is thus needed to ensure that efforts are applied ethically and responsibly to create social as well as economic value.

The Foundation recently launched the Future of Business program, specifically aimed to accelerate the development of responsible and inclusive investment practices. Among the primary stakeholders are women in the Global South. By creating easier access to capital for women entrepreneurs with an impact-driven agenda, activating a global network of socially oriented investors and highlighting global female role models, women’s economic empowerment will increase. At the same time, the chances of achieving all the SDGs will rise too.

4. Standing firm with underserved women in Asia

Through access to inclusive finance and resources, SMEs and WSMEs in Asia are adapting their businesses to the pandemic, and pivoting so that they can continue to support livelihoods in their markets.

IIX’s Women’s Livelihood Bond Series has shown extraordinary resilience throughout the pandemic. Despite the upheaval to global markets, all borrowers of the second issuance (the WLB2) remained on track to hit or over deliver on their impact targets.

For example, one woman-focused enterprise in Cambodia – Amru Rice – continued to source sustainable rice from thousands of farming families and women smallholder farmers. Benefiting from its deep impact on women, Amru’s business has been powering through to contribute to national food security, global economic recovery and women’s empowerment.

This is just a glimpse of how women can become the engine of growth during the pandemic.

Through cross-sector partnerships, innovative financial instruments, and a renewed commitment to inclusive growth and women’s empowerment, we can rebuild the foundations for sustainability that will outlast the pandemic era.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

What does reimagining our energy system look like?

France pushes UK to stay and Germany to pay

Sudan: European Union provides €30 million in humanitarian assistance

Want a Sustainable Earth? Bring on the Fourth Industrial Revolution

Climate Change : An Already Health Emergency

Mergers: Commission clears E.ON’s acquisition of Innogy, subject to conditions

Governments, businesses ‘walk the talk’ for investment in sustainable development: UN forum

EU-U.S. Privacy Shield: Second review shows improvements but a permanent Ombudsperson should be nominated by 28 February 2019

Humanitarian aid: €7 million for disaster preparedness in Southern Africa and Indian Ocean region

As Yemen relief operations face funding gap, timing of surge in violence ‘couldn’t be worse’

Paid paternity leave should be the norm in the US

#UNGA NEWS ROUNDUP: Funding plea for UNRWA, Burkina Faso and CAR updates, Guterres praises climate change ‘pioneer’ Chirac

EU Border and Coast Guard: new corps of 10 000 border and coast guards by 2027

‘The clock is ticking’ on meeting the Sustainable Development Goals, says UN deputy chief

Robot inventors are on the rise. But are they welcomed by the patent system?

Why India can show us how to achieve growth with purpose

GSMA Announces New Keynote Speakers, Event Updates for 2019 “MWC Los Angeles, in Partnership with CTIA”

Back to the basics for the EU: Investment equals Growth

More electric cars on EU roads by 2030

10 ways central banks are experimenting with blockchain

Here’s a reason to feel cheerful – the world is full of Good Samaritans

Sassoli to EU governments: Rise to the challenge. Find new shared ways to finance our recovery

‘I don’t like to give up’: veteran UN envoy reveals how two decades of quiet diplomacy gave birth to North Macedonia

UN food agency appeals for access to key storage facility amid fight for Hudaydah

We lack a global framework for saving our environment. Here’s how we change that

Politics needs to “Youth UP” in order the ensure the future of our democracies

How cities, not states, can solve the world’s biggest problems

Why tourism policy needs to use more imagination

This new form of currency could transform the way we see money

This brand is recycling underwear – here’s why

FROM THE FIELD: Turning waste into a business in the slums of Yaoundé, Cameroon

Drought in Europe: Member States agree on support measures proposed by the Commission

WEF Davos 2016 LIVE: “Chinese economy has great potential, resilience and ample space for policy adjustment”, China’s Vice President Li Yuanchao reassures from Davos

EU ready to relinquish its internal tax havens

A Sting Exclusive: “Youth voice must be heard in climate change negotiations!”, Bérénice Jond Board Member of European Youth Forum demands from Brussels

The financial future of Eurozone on the agenda of Friday’s ECOFIN council

As children in Ebola-affected areas of DR Congo head back to school, UNICEF ramps up support

Ebola emergency chief decries new attacks on frontline staff, after DR Congo worker death

Azerbaijan chooses Greek corridor for its natural gas flow to EU

Donald Trump’s victory is a great opening for global EU leadership on the sustainability agenda

Coal addiction ‘must be overcome’ to ease climate change, UN chief says in Bangkok

Erasmus+ 2021-2027: more people to experience learning exchanges in Europe

COVID-19 vaccines: MEPs quiz top officials on authorisation and contracts

‘Uphold human dignity’, dismantle ‘specious notion of racial superiority’ urges UN chief

Parliament sets up plan to fight the 3,600 criminal rings of EU

FROM THE FIELD: Children in warzones denied right to education

LGBT community in Chechnya faces ‘new wave of persecution’: UN human rights experts

European Commission: Does Apple, Starbucks and Fiat really pay their taxes?

From zero to one: a realist’s guide to overcoming hopelessness

Colombia: ‘Terrible trend’ of rights defenders killed, harassed; UN calls for ‘significant effort’ to tackle impunity

Gender disparity in salary and promotion in medicine: still a long way to go

A Sting Exclusive: “Doing ourselves a favour”, Vice President Dombrovskis underscores that this time growth has to come from within the EU

Cyclone Fani hits India, UN moves to protect vulnerable refugees in Bangladesh

The business of media in 2021

Mergers: Commission approves acquisition of joint control over Prosegur Alarmas by Telefónica and Prosegur

DPRK reports ‘little progress’ since historic June 2018 summit with US

Emotional control and introspectivity in times of pandemic

A revolution, an ecosystem, an ocean: 5G is just the beginning

New Eurobarometer survey shows: The majority of Europeans think the EU should propose additional measures to address air quality problems

UN Mission, community leaders, condemn South Sudan violence which left two dead at camp

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s