Want more effective climate finance? Consider gender-smart solutions

Quick links:

•    Climate finance gender gap
•    Women’s climate vulnerability factors
•    Financial barriers to adaptation
•    Socio-cultural climate barriers
•    Gender analysis from day one
•    Leveraging existing systems
•    Prioritise women’s local expertise
•    Tailored solutions for women
•    Inclusive climate finance for the future

Climate finance gender gap

Climate change impacts are intensifying globally, yet the burden is not shared equally. Women and girls, particularly in low- and middle-income countries (LMICs), experience heightened vulnerability due to pre-existing inequalities. This reality is starkly contrasted by a challenging global funding landscape. Significant cuts to international aid budgets by major donor countries, including the US, UK, and some European nations, place immense pressure on climate resilience efforts. The UK's planned reduction in aid funding, for instance, from £15.3 billion in 2023 to an estimated £9.2 billion, potentially jeopardises its climate finance commitments, including the £11.6 billion pledged for 2021-2026.

These funding cuts disproportionately affect LMICs, where climate finance is critically needed. The consequences for women and girls are particularly severe; UN Women estimates that climate change could push up to 158 million more women and girls into poverty by 2050. In these contexts, women and girls are often on the front lines of climate impacts, facing disproportionate harm from environmental shocks while being frequently overlooked by response systems.

Understanding and addressing the specific needs and vulnerabilities of women and girls is therefore not merely an equity issue; it is fundamental to effective climate action. As resources become scarcer, maximising the impact of every dollar is paramount. This requires investing strategically in long-term, inclusive resilience initiatives that proactively reduce future humanitarian needs. Achieving this demands solutions that are not only innovative but also deeply rooted in local contexts and realities.

Women’s climate vulnerability factors

In our work across LMICs, we see persistent barriers systematically limit the capacity of women and girls to prepare for, adapt to, cope with, and recover from climate impacts. These barriers rarely exist in isolation; instead, they intersect, creating compounded disadvantages that significantly amplify climate vulnerability. Senegal and Madagascar, for instance, nations highly susceptible to climate shocks like floods and droughts, serve as compelling cases illustrating these interconnected challenges, which resonate across many similar contexts. Recognising this intersectionality is crucial, as climate interventions that fail to account for this complex interplay often fall short of reaching those most in need.

Financial barriers to adaptation

Limited access to financial services and products represents a critical barrier preventing effective climate action by women in many LMICs. In Madagascar, access to formal banking and digital financial services remains low. This lack of access deprives women of essential tools – savings, credit, and insurance – necessary for building climate resilience. Without savings, women lack a financial buffer to cope immediately after a climate shock, such as purchasing food when harvests fail due to drought or repairing minor damages after a cyclone. 

The absence of accessible credit prevents proactive investments in adaptation measures, like acquiring drought-resistant seeds, investing in irrigation, or reinforcing homes against storms. Furthermore, the unavailability of suitable micro-insurance means that climate-related disasters can wipe out household assets entirely, with no mechanism for recovery.

Compounding the issue of access is the lack of diversity and suitability in the financial products that are available. Standard insurance products, often designed with assumptions based on different economic or cultural contexts, may be irrelevant or inaccessible. For instance, products might require levels of collateral that women, who often have fewer formal assets, cannot provide. Insurance schemes suitable for one agricultural zone may not address the specific risks (e.g., drought vs. flood) prevalent in another. 

This mismatch between available products and the specific needs and capacities of women in climate-vulnerable situations effectively excludes them from risk-transfer mechanisms, leaving them to bear the full brunt of climate impacts. Addressing financial exclusion is therefore not just an economic development goal, but a direct pathway to enabling climate resilience actions.

Socio-cultural climate barriers

Beyond financial and health constraints, deeply embedded socio-cultural norms and institutional factors significantly limit women's agency and access to climate resilience resources. These barriers manifest in several interconnected ways:
•    Restrictive social norms: Prevailing norms often dictate women's roles, mobility, and decision-making power within households and communities. Restrictions on women's ability to travel alone, own or inherit land and other assets, control household finances, or participate in public meetings can severely hinder their ability to engage in climate action. For example, in Senegal, women may be excluded from community-level adaptation planning processes, unable to access early warning information if it's disseminated through male-dominated channels, or prevented from independently accessing relief aid or financial services offered at locations they cannot easily reach or where they cannot interact freely.
•    Institutional mistrust and  information gaps: The observed deep mistrust in insurance companies in contexts like Madagascar and Senegal often points to a broader skepticism towards formal institutions, whether governmental or private sector. This mistrust may stem from past negative experiences, perceived exclusion, lack of transparency, or simply a lack of familiarity. It is closely linked to limited understanding or acceptance of a culture of risk and challenges posed by low literacy levels. When climate finance initiatives, including insurance schemes or credit programmes, are introduced without adequately addressing these trust issues and information gaps, women, in particular, may not participate. They may be hesitant to engage with initiatives they do not fully understand, whose processes seem opaque, or whose representatives are not perceived as trustworthy. This avoidance is not merely a matter of preference; it is often a rational response based on perceived risks and past experiences, leading to the exclusion of precisely those groups the initiatives aim to serve.

These socio-cultural and institutional factors are intertwined. Norms can limit women's access to information and education, reinforcing literacy gaps. Lack of understanding and negative experiences can breed mistrust, further discouraging engagement with formal systems. Addressing these requires more than just information campaigns; it necessitates building trust through culturally sensitive engagement and designing activities that acknowledge and work within, or carefully challenge, existing social structures.

The barriers women face, including but not limited to those outlined above, do not operate in isolation. They intersect and reinforce one another, creating a complex cycle of vulnerability for women and girls facing climate change. Lack of financial independence restricts access to healthcare and limits agency in household decisions. Poor health reduces the capacity to pursue livelihoods or engage in community activities. Restrictive norms prevent access to financial services or climate information. 

This intricate web significantly undermines women's and girls’ agency, their ability to make independent choices and act on them,  and erodes their resilience to climate shocks. Consequently, climate programmes and finance mechanisms that fail to explicitly account for and address these intersecting realities risk being ineffective and inefficient. Worse, they may inadvertently reinforce existing structural inequalities, ultimately failing to reach those most vulnerable and in need of support.

While the barriers hindering women's climate resilience are significant and complex, practical and effective strategies exist to overcome them. Our work for the Global Shield against Climate Risks, a G7/V20 initiative focused on strengthening climate risk finance and pre-arranged disaster protection, has allowed us to draw key insights from programmes working on the ground. The Global Shield against Climate Risks aims to close protection gaps in climate-vulnerable countries, using a toolbox of pre-arranged finance. 

Following the principles of subsidiarity and ownership of partner countries, the Global Shield applies a needs-based approach and works together closely with local stakeholders to build on already existing financing structures and instruments. Specific country studies that we are conducting for Global Shield, like those in Madagascar and Senegal, point towards key principles for designing and implementing climate finance that truly reaches and supports vulnerable women and girls.

Similar findings are emerging across other country case studies, including the Pacific Islands (Fiji, Marshall Islands, Tonga), Pakistan, Malawi, Gambia, Bangladesh, Costa Rica, Rwanda and Philippines. Moving from diagnosing the problem to crafting effective solutions requires a shift towards approaches that are intentionally inclusive, contextually grounded, and participatory. The following recommendations outline actionable pathways for funders seeking to maximise the impact and equity of their climate finance investments.

Gender analysis from day one

Integrating gender considerations into climate finance proposals must be treated as a foundational necessity, not an optional supplement or an afterthought. Conducting thorough gender analysis from the very beginning of programme design is crucial. This early analysis allows initiatives to identify and understand the specific barriers, financial, socio-cultural, institutional, that women and girls face in that particular context concerning climate vulnerability and resilience. The findings from this analysis should then directly inform key aspects of programme design, including targeting strategies (how to reach the most vulnerable women), delivery mechanisms (what channels are accessible and trusted by women), the types of support offered (financial products, information, services), and the indicators used for monitoring and evaluation (measuring impact on women specifically).

This proactive approach contrasts sharply with attempts to 'retrofit' gender considerations onto pre-existing programme designs. Retrofitting is often superficial, failing to address the underlying structural barriers identified earlier. For example, simply setting a target for female beneficiaries without changing a financial product's collateral requirements (which women may lack) or delivery location (which women may be unable to reach due to mobility restrictions) is unlikely to achieve meaningful inclusion. The Global Shield's approach, which actively supports governments and partners in identifying gender-related gaps early in the process, exemplifies how proactive integration ensures inclusivity is built into the core logic of climate finance mechanisms, making them far more likely to be effective. For funders, insisting on robust, upfront gender analysis is a key step towards ensuring investments lead to equitable and impactful outcomes.

Leveraging existing systems

Rather than creating entirely new, parallel structures for delivering climate finance, a more strategic, efficient, and often more sustainable approach involves leveraging and adapting existing systems and platforms. This means identifying and building upon established national strategies, policies, and community-level structures that already have reach, legitimacy, and operational infrastructure.

At the national level, existing policies focused on women’s social inclusion, poverty reduction, or social protection can often be adapted to incorporate climate resilience objectives. For instance, established cash transfer programmes within national social protection systems could be modified to deliver climate-related emergency payments quickly and efficiently to vulnerable households, including those headed by women, following a disaster. Similarly, national strategies for women's economic advancement could integrate components focused on climate-resilient livelihoods or access to climate-related financial services. Referencing these existing policies when developing national climate finance strategies helps ensure specific considerations for gender and social inclusion are incorporated from the outset.

At the community level, working through existing trusted structures like women's groups, cooperatives, or village savings and loan associations (VSLAs) offers significant advantages. These groups often have established trust networks, communication channels, and mechanisms for reaching women who might be excluded from more formal systems. Integrating climate information dissemination, climate-smart agriculture training, or even delivery of micro-insurance products through these existing groups can overcome barriers related to trust, access, and cultural appropriateness. This approach avoids the duplication of effort and resources required to build new systems from scratch, leading to faster implementation and potentially greater political viability and long-term sustainability. For funders, supporting initiatives that strategically 'piggyback' on proven existing systems offers a pathway to achieving scale and impact more effectively.

Prioritise women’s local expertise

Effective climate finance solutions cannot be designed in isolation from the contexts in which they are intended to operate. Prioritising local expertise, especially of women, is therefore essential. Local consultants, community leaders, and civil society organisations possess nuanced understanding of the social norms, informal economic systems, local power dynamics, and historical context that shape how interventions are perceived and accessed. Their insights are invaluable for navigating potential pitfalls and identifying culturally appropriate strategies, particularly regarding sensitive issues like gender relations and institutional trust. As seen in Senegal and Madagascar, local experts understand how intricate local dynamics affect processes like women's access to financial support in ways that external actors might easily miss.

Crucially, leveraging local expertise must go hand-in-hand with ensuring the meaningful participation of women throughout the entire project cycle – from initial design and planning through implementation, monitoring, and evaluation. This means moving beyond token consultations towards genuine co-creation, where women's voices, experiences, and feedback actively shape the solutions being developed. Women are not just recipients of aid; they are agents of change with critical knowledge about their own needs, priorities, and the practicalities of implementing solutions within their communities. Their direct involvement is fundamental to designing programmes that are practical, relevant, culturally acceptable, and truly responsive to their lived realities. This participatory approach directly addresses the barriers of mistrust and potential cultural disconnect. By ensuring women have a stake in shaping the solutions, programmes build ownership, enhance accountability, and significantly increase the likelihood of achieving sustainable and equitable outcomes. Funders should look for evidence of robust participatory processes as a hallmark of well-designed, effective programmes.

Tailored solutions for women

Innovation in climate finance, particularly for reaching vulnerable women in LMICs, should be understood not necessarily as deploying the latest technology, but as the creative adaptation of solutions to fit specific local contexts, capacities, and existing systems. Standardised approaches, often imported from different settings, frequently fail because they rest on assumptions that do not hold true. For example, many conventional climate finance mechanisms, such as complex parametric insurance products, assume levels of financial infrastructure (banks, digital connectivity), financial literacy, and trust in formal institutions that simply do not exist or have very limited reach in many rural or marginalised communities, such as those in Madagascar heavily reliant on agriculture and vulnerable to cyclones and droughts.

Therefore, a fundamental rethink is often required. Insurance products, for instance, must be radically redesigned or delivered through different channels in places where there is no cultural precedent or deep-seated mistrust exists. Effective innovation involves grounding solutions in local realities. The prevalence and success of informal systems like Village Savings and Loans Associations (VSLAs) even among people living in poverty in rural Madagascar provide a powerful example. VSLAs function effectively because they are built on social collateral and trust, operate using simple and understood mechanisms, and are highly accessible within the community. Their success suggests they are far more likely to be accepted by local communities as potential platforms or channels for climate-related financial products, such as adapted micro-insurance or emergency loan funds. 

Innovation, in this sense, means finding ways to build upon and link these trusted, existing informal systems with broader climate finance goals. This could involve designing simplified insurance products distributed through VSLAs, using VSLA meetings for climate information sharing, or developing mechanisms to connect VSLAs to formal financial institutions for larger needs. Other context-specific innovations might include using community radio for climate early warnings in areas with low literacy or limited mobile connectivity, adapting mobile money platforms for users with limited literacy, or bundling health information and services with financial literacy training delivered through women's groups. The key is that innovation must be demand-driven and contextually appropriate, leveraging local strengths rather than imposing external models.
The pathways outlined above converge on a set of core principles for funders aiming to support climate finance that effectively reaches and supports women and girls:
•    Foundation of gender analysis: Ensure rigorous gender analysis informs programme design from inception.
•    Leverage existing systems: Prioritise adapting and building upon trusted national and community structures.
•    Local expertise and participation: Ground activities in local knowledge and ensure women's meaningful involvement throughout.
•    Contextualised innovation: Foster creative solutions tailored to local realities, capacities, and existing systems like VSLAs.

Approaches that integrate these principles are demonstrably more likely to overcome the complex, intersecting barriers women face. They move beyond simplistic actions to address the root causes of gendered vulnerability, thereby enhancing the effectiveness, equity, and long-term sustainability of climate finance investments.

The future of inclusive climate finance 

The imperative to integrate gender equality into climate action has never been more urgent. As climate impacts escalate and development budgets face constraints, ensuring that climate finance effectively supports women and girls is critical not only for social justice but also for achieving meaningful and lasting resilience. The analysis, drawing insights from contexts like Madagascar and Senegal, underscores that women are at increased risk through a complex interplay of factors, including financial exclusion, restrictive socio-cultural norms, and institutional barriers. Overlooking these intersecting realities leads to ineffective interventions that fail those most in need.

However, clear pathways exist for more impactful investment. By embedding gender analysis from the start, strategically leveraging existing national and community systems, prioritising local expertise and women's participation, and fostering innovation grounded in local realities, climate finance can be designed to overcome these barriers. Principles derived from initiatives like the Global Shield and experiences with mechanisms like VSLAs demonstrate the viability of these approaches. For funders, this requires a commitment to supporting programmes that are thoughtfully designed, evidence-based, and context-specific. It means challenging assumptions, demanding robust gender integration, and investing in participatory processes. Continued collaboration between funders, governments, local experts, and, crucially, women themselves, is essential to shape climate responses that are not only more equitable but also fundamentally more effective in building a resilient future for all

About the author:

Humaira Hansrod is a qualitative researcher and economist, with expertise in gender and social inclusion. She has worked in the MENA region, sub-Saharan Africa, and the UK. Humaira is based in the Inclusive Education hub within the Education Practice. She holds a DPhil in International Development from the University of Oxford.