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

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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.

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