Where to next: reflections on the direction and trends for climate & gender policy work in 2025

According to the latest Global Landscape of Climate Finance report, the global flow of climate finance exceeds $1.44 trillion annually toward climate adaptation and mitigation. Yet, less than 10% of this finance is allocated to adaptation activities, the component most relevant to achieving sustainable development goals, including gender equity. Furthermore, only a small portion is directed toward gender-lens projects, and there are no clear metrics to provide a comprehensive picture of their outcomes. Moreover, according to the UNFCCC Standing Committee on Finance’s 2021 report, US$803 billion was recorded for climate finance focused on mitigation and adaptation, while only US$6 billion was raised for gender‑lens funds in private markets by mid‑2021. This represents a mere 0.01% of global funding directed toward gender‑responsive climate finance, despite the fact that 80% of those displaced by climate change in developing countries are women.
It’s critical to remember that women are key agents of change in climate adaptation and mitigation - therefore, prioritising gender equity creates new market opportunities and fosters innovation, resulting in comprehensive and effective climate solutions. This is confirmed by several case studies, such as one from the IFC which found that gender‑balanced investment teams in private equity and venture capital generate returns 10% to 20% higher. Similarly, a McKinsey report indicated that companies with gender‑diverse executive teams are 21% more likely to outperform their counterparts in profitability and 27% more likely to create superior value for investors. The European Central Bank also found that a 1% rise in the share of female managers corresponds to a 0.5% decrease in CO₂ emissions. In extreme synthesis, it is evident that integrating gender considerations into investment decisions is both a smart investing and de-risking strategy.

The adage “you cannot manage what you cannot measure” is particularly applicable in the context of gender-responsive climate finance.

The adage “you cannot manage what you cannot measure” is particularly applicable in the context of gender-responsive climate finance. Investors may be unaware of the potential for higher economic and social returns, as well as improved risk diversification, that comes from gender-responsive climate projects. Hence, how to measure the gender-responsiveness of climate investments was a central theme of 2X Global’s 2024 advocacy efforts leading up to COP29, held in December 2024 in Baku, Azerbaijan, and remains a focus for 2X Global in 2025.

In fact, a key expected outcome of COP29 was the establishment of a new financial target to support developing countries in their post‑2025 climate actions, known as the New Collective Quantified Goal (NCQG). The drafting of the policy to be presented at COP29 was given to a selected group of countries appointed technical experts and both party (governmental institutions from the UNFCCC countries) and non‑party (non-governmental and private sector organisations) stakeholders were encouraged to submit recommendations for NCQG policymakers. For the preparation of the NCQG policy discussions at COP29, 2X Global submitted an input paper to the Ad‑Hoc Work Programme on the NCQG in collaboration with 2X Global members such as British International Investment (BII) and the Private Infrastructure Development Group (PIDG). The paper stressed that the quality dimension of climate finance must incorporate gender‑smart investing as a driver for inclusivity and equity. It included evidence‑based insights and practical suggestions for integrating gender‑informed strategies into climate finance policies and procedures, arguing that a just transition cannot be achieved without such integration. 

The paper stressed that the quality dimension of climate finance must incorporate gender‑smart investing as a driver for inclusivity and equity.
It included evidence‑based insights and practical suggestions for integrating gender‑informed strategies into climate finance policies and procedures, arguing that a just transition cannot be achieved without such integration. 

Specifically, the paper called for the climate finance deployed through the financial mechanisms of the climate convention to apply internationally recognised criteria that ensure climate projects foster gender equality, leading to transformative impacts on environmental and social sustainability, enhanced returns, and additional finance for climate action. It recognised the need for all financial players involved in the climate investment space to integrate a gender lens into all their climate investments. The paper also suggested that international financial institutions supporting the implementation of the Paris Agreement establish clear gender integration parameters and define and implement guidelines for incorporating gender considerations into climate finance.

Moreover, based on the research stemming from this input paper, during COP29, 2X Global published recommendations for the COP negotiators involved in the NCQG decision, presenting three pathways and non‑exclusive options to incorporate gender‑responsiveness into the NCQG framework. These options included establishing a core principle in the chapeau or preamble, embedding gender‑responsiveness as a stand‑alone subgoal, and integrating gender‑responsiveness within combined subgoals and reporting standards, without adding reporting burdens to developing countries.

Remarkably, 2X Global’s call for ensuring gender‑responsiveness in climate investments was included in the draft negotiation text sent to the COP29 Parties, although the final NCQG COP29 decision did not include any specific reference to gender-responsive climate finance. Although this outcome was disappointing, the COP29 Presidency also called for a 10‑year extension to the Lima Work Programme on Gender (LWPG). 
The LWPG is tasked with providing a clear roadmap and developing a new Gender Action Plan (GAP) to be agreed upon and adopted by Parties at COP30 in Belém, Brazil. This extension underscores the private sector’s crucial role in contributing to the new GAP through the LWPG. Accordingly, 2X Global will actively contribute to the LWPG this year, including by submitting an input paper. If you are interested in contributing to this effort alongside us, please contact Climate Lead Demetrio Innocenti (demetrio@2xglobal.org) or Senior Associate Eleanor Ripoll (eleanor@2xglobal.org).

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2X Impact Rewards: Incentivising Better Gender Impact