The missing question that will transform your climate investments
Last week, I revealed the simple question costing climate investors 63 percent better returns: How many women are leading your climate projects? Now here's how to stop leaving that money on the table.
When companies evaluate their climate investments, it’s smart to consider not only the usual — reduction versus removal, vintage year, geographic region, project certification, price per tonne — but who is leading these projects you’re buying into.
Adding gender criteria to climate investment decisions isn't about ESG compliance — it's about competitive advantage. It's a performance indicator, risk management tool, innovation signal, and community impact multiplier all rolled into one.
Here's why your competitors who figure this out first will outperform you:
Performance matters. Female-founded startups deliver higher returns than male-founded companies, while women-led small and medium-sized enterprise (SME) loan portfolios consistently have lower non-performing loans based on six consecutive years of IFC data. When you're investing in climate projects, you want the developers with the strongest track record of execution.
Risk management matters. Women-led businesses demonstrate greater resilience in uncertain moments. Given the current economic headwinds affecting climate finance, this isn't just an advantage; it's essential.
Innovation matters. Gender-diverse teams solve problems differently, bringing access to underserved markets and user insights that homogeneous teams miss entirely. Companies with gender-diverse boards are 60 percent more likely to reduce energy consumption and 39 percent more likely to reduce greenhouse gas emissions. In a sector desperately needing innovation at scale, we're voluntarily limiting our creative capacity by not prioritizing diverse leadership.
Community impact matters. Women reinvest earnings back into families and communities at significantly higher rates — up to 90 percent compared to up to 40 percent for men — creating multiplier effects that extend far beyond the initial investment. When climate projects succeed at the community level, they're more likely to deliver long-term, sustainable results.
How to capture this competitive advantage
The good news? You don't need to overhaul your entire procurement process. You can start by expanding your existing scorecard to include gender alongside your current criteria.
Step 1: Set baseline and targets for climate investment projects
Begin by auditing your current climate portfolio. Ask project developers and intermediaries to provide gender composition data for project leadership. You'll likely find that women represent less than 10 percent of project leads across your portfolio, meaning there's significant room for improvement.
Set a target for women-led project participation. Start with 20 percent as a baseline goal, then increase over time. Weight your scoring system to favor gender-diverse portfolios, just as you might weight for geographic diversification or project type.
Step 2: Seek co-benefits that command premium pricing
Not all gender-focused climate projects are created equal. Look for projects with co-benefits verified by established frameworks like the W+ Standard, which requires that 20 percent of the credit price goes directly to women’s groups in the project community.
These projects don't just deliver gender benefits. Credits from carbon-emissions-reduction projects that deliver benefits to women can add the W+ Standard certification, which may command higher pricing given that co-benefit certifications generally trade at a premium in carbon markets.
Step 3: Establish strategic partnerships
Partner with intermediaries and funds that explicitly integrate gender objectives. Organizations like W+, 2X Global and grants like Women-Led Coal Transitions (WOLCOT) have developed sophisticated approaches to gender-smart climate finance. They've done the due diligence work to identify high-quality, women-led projects at scale.
Work with project developers who can demonstrate women's leadership not just in management roles, but throughout project implementation. Ask for specific metrics: What percentage of jobs created go to women? How are women involved in project decision-making? What community benefits specifically target women?
Tools to accelerate women-led climate investment already exist
This isn’t about creating new systems as the infrastructure for gender-smart climate investing is already being built.
Financial instruments are evolving. Clean Impact Bonds allow SMEs to repay through gender and health credits alongside carbon credits. Some innovative financing structures also offer lower interest rates tied to hitting both climate and gender milestones.
Programs and platforms can help you identify opportunities. IFC's "She Wins Climate" program accelerates women-led climate startups, while the 2X Global toolkit provides detailed guidance for gender-smart climate finance. These aren't experimental programs. They're established initiatives with track records of success.
Standards and certifications can also help you verify impact. The W+ Standard quantifies women's empowerment benefits, while various sustainability certifications can help you identify projects with strong community co-benefits verified against UN Sustainable Development Goals.
Your action plan starts now
The biggest barrier to incorporating gender into your climate investment decision-making isn't finding the tools or identifying the projects. It's making the decision to prioritize gender in the first place. Here's how to start:
Ask “Who is leading these projects?" Request gender composition data from project developers as a standard part of your RFP process. Include gender criteria in your evaluation rubric alongside price, vintage and project type.
Set target percentages for women-led projects in your portfolio. Track your progress quarterly and report on it in your sustainability communications.
Prioritize working with partners who can demonstrate strong gender outcomes. Ask them how they source women-led projects and what systems they have in place to track gender impact.
Triggering a wide ripple of impact
Here's what happens when you start systematically asking about women's roles in climate projects:
Project developers begin to prioritize women's leadership because they know it creates competitive advantage.
Intermediaries develop stronger pipelines of women-led projects.
The entire market starts to reward gender diversity because there's a clear demand signal from corporate buyers.
This isn't theoretical. Pilot studies examining clean energy value chains have found, for example, that companies that hire more women in clean energy sales saw gains of up to 85%. Imagine the impact if they lead these companies too.
When you create demand for women-led climate projects, you're not just changing your own portfolio — you're helping to transform market incentives.
The early movers are already gaining this edge. The question isn't whether you can afford to prioritize gender in climate investing. It's how much longer you can afford to let your competitors get there first.
Read the full Gender + Climate Finance series here.
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Jennifer Owens is a marketing leader with 14 years of experience, including the past five years focused on sustainability, climate tech and carbon markets. Previously, her work centered on equity and inclusion communications, including DEI benchmarking and policy-focused storytelling. She co-hosts the Engaging ESG podcast with Kati Kallins, global sustainability lead, Adobe. Learn more at Jennwork.