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Why Women in Leadership Across Multiple Sectors is Key to Ensuring Sustainable Energy for All
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By Stacy Swann

In emerging markets, there are two key areas that are known to contribute to economic growth:  Access to Energy and Access to Finance, and how well gender considerations are mainstreamed in efforts to scale up access to energy and finance can be important determinant of success. The evidence to support this is clear:

  • Access to clean, reliable energy is an issue in many parts of the world, and it disproportionately impacts women and girls. In the energy sector, the gender dimensions of access to sustainable, clean energy have been recognized as key to effective energy policy making, particularly in emerging markets.
  • Access to finance is key to boosting economic growth and improving opportunities, income distribution and reducing poverty.  Financial inclusion, in particular integrating greater access to finance for women, is important for economic growth, particularly as women comprise more than 40% of the world’s workforce

Forthcoming research this Fall will underscore that financing energy access in many emerging markets – including those least electrified – is significantly lacking, and falls far short of what is needed to close the energy access gap.  Solving these challenges requires policy makers, “practitioners” and leaders in the energy and financial sectors.   Women in leadership across multiple sectors – including finance and energy – is key to solving energy access challenges globally.   Targeted, gender-focused programs, policies, and investments are good.  But getting more women into leadership and decision-making positions is equally important.  This applies at the policy level, and as “practitioners” in both the energy and financial sectors. 

In the energy sector, this will require efforts across an ecosystem of energy access “practitioners,” from entrepreneurs on the ground looking to develop energy access solutions (in emerging markets, these are often distributed and off-grid) to utilities and energy companies both big and small. Many people point out that increasing the number of women in key decision-making positions in the energy sector can influence where and how energy access and services are delivered and can help ensure gender issues are considered. 

Incorporating gender considerations into the approach to financing energy access is also critical to solving the energy access challenge. In many emerging markets financing energy access is closely linked with access to finance challenges, particularly for rural, off-grid and residential energy access investments.  Despite the obvious benefits of including women into the energy sector in many of these countries, women continue to face barriers and challenges to accessing capital, including those women-owned SMEs providing energy access services.  World Bank research underscores how difficult it is for women to access finance in emerging markets, including (importantly) that providers of finance have few incentives to cater to women entrepreneurs. 

Incorporating gender considerations across an ecosystem of financial actors that support energy access investments, including (among others) microfinance institutions, banks, development finance institutions, and impact investors is an important and necessary step.  In practice this means hiring more women into the professional and managerial levels of financial institutions, and staffing them on portfolios and programs that make energy access investments.  It also means taking a proactive approach to increasing gender representation at the executive and board levels.    

The good news is that some policy makers and financial actors are beginning to take issues at the nexus of energy access and gender seriously, while at the same time many financiers see the clear opportunities to support women in the energy access sector. Some of these efforts are driven by internationally agreed development goals, such as the Sustainable Development Goals (SDGs) adopted in 2015 which have specific goals for Energy Access (SDG7) and Gender Equality and Women’s Empowerment (SDG5), as well as the Paris Agreement.

Others efforts by financial actors are driven by the recognition that there are good investment opportunities at the nexus of gender and energy access.  In fact, some report that women focused investment portfolios help not only women-owned SMEs to gain access to capital, but also outperform others in terms of financial performance, repayments and low non-performing loans. Initiatives such as Calvert Foundation’s Women Investing in Women Initiative, a fund launched in 2012 that specifically invests in organizations that work to provide women access to clean energy, has served more than 14 million women around the world to increase their access to energy services. 

But much more needs to be done to close the energy access gap quickly, and financing is key to scaling up these investments. Increasing the number of women “practitioners” in the finance and energy access sector is a start, but moving more women into decision-making positions in both the will be equally important.  And, it could be equally challenging. Women remain underrepresented in decision making positions in both the energy sector and the finance sector in both developed and emerging markets. Even in the United States, women in positions of influence in the energy sector still lag behind their male counterparts, in terms of number, seniority, and compensation, with women comprising only about 14% of senior management at the top 200 power and utility companies, and only about 5% of executive board members. Similar statistics can be found in the financial sector, where the global average of women on the board or executive committee of financial services firms is only 16%, and while representation of women is respectable through the professional levels, representation drops significantly in management, senior management and executive levels. There is clearly a long way to go to get more women into positions of influence in both these sectors.

Given that both access to energy and access to finance disproportionately impacts women, and urgent efforts are needed to close the energy access gap, it seems clear that two clear things are needed:  scaling up gender-focused programs, policies, and investments are needed, and moving women into positions of influence and decision-making throughout these sectors.

It is clear that throughout the energy and financial sectors, women have the potential to be crucial agents of change for solving the energy access problem and must be involved at all levels, including at the policy level, within companies, businesses and the financial actors that will fund the necessary investment to close the energy access gap.

Stacy Swann is the CEO of Climate Finance Advisors, BLLC based in the Washington, DC area.

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