Harnessing Racial And Gender Justice To Amplify Action On Climate Change
This piece was originally published on July 23, 2020 on the GenderSmart Investing Blog.
By Suzanne Biegel and Sophie Lambin
In the past few months, the COVID-19 crisis and BlackLivesMatter (BLM) movement have brought the concept of intersectional inequality to the fore. Across Europe and the Americas, people who are Black, Indigenous and People of Colour (BIPOC) have been disproportionately affected by COVID-19 just as George Floyd’s dying words, “I can’t breathe” became a clarion call for action on institutionalised racism across the world. Increasingly, we see how racial injustice intersects with gender and class injustice to create communities of people who are members of multiple disadvantaged communities. Any programme that targets injustice in one community — women, for example — is significantly more effective if it takes an intersectional approach. What implications does this have for gender and climate impact investment?
Recent protests in Washington DC have emphasized the ways in which environmental justice and racial justice intersect: people of colour are more likely to live near polluting industrial sites, for example, because they have no option. Across the world, it is indigenous communities who are at the sharp end of climate change impacts of food insecurity, wildfires, droughts and floods. People of colour are disproportionately impacted by climate change while in general contributing far less towards the causes of ecological destruction. Both injustices rest on the power imbalance that underlies institutional racism and climate change.
The two causes — environmental sustainability and racial justice — are deeply interlinked, just as issues of gender and climate are inextricably connected. Calls for a global Green New Deal seek an urgent decarbonization of the economy while dismantling these structures that disproportionally impact disadvantaged groups.
Investors looking to introduce a combined gender and climate lens into their portfolios need to consider intersecting inequalities as a whole. Women and gender issues have been pivotal in the emergence and evolution of the environmental justice movement. And directing finance through an intersectional justice lens has the potential to scale up and accelerate positive outcomes for marginal groups everywhere. At the same time, these demographics add value to investments through innovation from their lived experiences. Moreover, given the need for systemic transformation, financial Institutions are also uniquely positioned to create real change.
Gender and climate investment aren’t yet mainstreamed across many parts of the finance ecosystem. As we build our field, we have the opportunity to capitalise on this moment to ensure that lessons from racial and ethnic justice movements are applied to everything we do.
Leadership in climate action
The climate movement for many years reflected the identity of those in power: an army of privileged, male white knights coming to save the world. It reflected an outmoded model of charitable action from the top down. In the last decade, there have been significant moves to recognise the importance of women’s leadership in climate action and this has accelerated progress toward a more collaborative approach to impact investment. However, leadership on climate action has insufficiently reflected racial and ethnic diversity, and has suffered as a result. Now is the time to change that.
We know that a lack of ethnic and gender diversity in asset management reduces awareness of uneven development and unequal opportunity, and numerous studies have shown how increasing workplace diversity can improve performance. For example, the McGregor-Smith Review of Race in the Workplace demonstrated that increased racial enquiry in the labour market could boost the UK economy by £24 billion, and the landmark 2016 report by Credit Suisse which revealed that gender diversity on boards correlated with superior corporate performance. Yet, only 1.35% of assets are managed by women and people of colour. That’s why there are growing calls to address racial and gender inequity in climate investment from organisations like Confluence Philanthropy, the Aspen Network of Development Entrepreneurs and Diversity Forum.
Building a new gender and climate investment field is an exciting opportunity to ensure that racial justice is a core objective underpinning investment strategy. To do this effectively means adding a racial lens to investment tools, case studies and data collection. Where structural inequalities intersect are focus areas for investments and interventions that can have the greatest impact, and by harnessing the power of the many rather than the few, we can create lasting change.
Why race matters to climate action
Some investors may feel that adding a racial dimension to impact investing diverts limited resources away from gender and is in danger of diffusion. But, as our working group contributor Rachna Saxena, Associate Partner at Dalberg puts it, “adding a racial justice lens to gender and climate finance can be more complex, but investing in solutions that take a holistic approach to serving people can be more transformative and more sustainable in the long-term.”
Taking an intersectional justice lens does not mean diverting finance away from gender lens initiatives. In fact, it’s a crucial lever to move more money towards them. Empowering those who face multiple forms of injustice can create a multiplier effect, giving agency to those who have been deprived of it, while generating evidence to support the impact and returns cases to appeal to a broader range of stakeholders and investors.
By ensuring investments reach the places where they are most needed, and equipping beneficiary communities with the skills and capabilities to stay empowered, we can also generate more meaningful, sustainable change for the longer term, freeing up resources to be directed elsewhere when initiatives become self-sufficient. Building a collaborative model of impact investment which gives agency to beneficiaries creates exponential returns on investment.
Calvert Impact Capital, for example, seeks to address structural inequalities by investing in markets and communities not receiving mainstream funding, with the goal of improving social and environmental conditions, across race, ethnicity and gender.
For impact investment strategy to work, we know we must listen to and learn from intended beneficiary communities, to ensure they have agency in informing the interventions that impact their lives. We must guard against replicating unequal power structures in how we make investment decisions and that means applying an intersectional lens to all that we do. There are some models of good practice from which we can learn. The Hewlett Foundation, for example, has stratified its listening practice through Fund for Shared Insight, a funder collaborative. We need to move from impacting on our beneficiaries to impacting with them.
Tackling intersecting inequalities in action
To help us see what good looks like, we can highlight initiatives that are leading the way in promoting racial and ethnic justice through work on gender and climate.
On the investor side, The Compton Foundation directs funds towards addressing climate change, progressive foreign policy, and reproductive rights and justice together, in particular by leveraging transformative leadership and courageous storytelling to shift cultural barriers. Success is multiplied by impacting on racial justice as well as gender and climate issues.
The core mission of the Wallace Global Fund is to “promote an informed and engaged citizenry, to fight injustice, and to protect the diversity of nature and the natural systems upon which all life depends”. Their approach incorporates ESG, shareholder advocacy, high impact investments, and sustainability screening.
There are a growing number of businesses which are intentional about the racial justice, gender and climate impacts of their products and services. For example, kubé nice cream, a plant-based ice cream brand, is dedicated to building an inclusive, regenerative economic model that restores value to the historically oppressed, ensuring that ambition threads through their whole operating model
Madison Reed, a hair products company, was founded with the ambition of eliminating toxic chemicals from hair dye (and other products) but it was built in a way to give people of colour (mainly women) living wages and a career path, thereby delivering economic justice.
SEED, a new agtech company supported by the Los Angeles Incubator (LACI) Impact Fund, offers ‘farm in a box’ through a proprietary irrigation and soil health offering that can be used by small farmers or urban windowsill growers alike. The payback is that for every box sold, SEED donates a box to underserved growers.
As we build the field, we want to learn from these examples to show how gender and climate investment go hand in hand with racial and ethnic justice.
A lasting call for change
Investors looking to accelerate impact on climate change and gender inequality have long understood the importance of attacking systemic weaknesses and injustices. We must now bring a racial and ethnic lens to those systems failures. The heightened awareness of these issues has given us an opportunity to capitalise on the moment to transform empathy into action.
As Bridget Burns, Director of WEDO, said in the GenderSmart virtual session, “We can’t create gender justice without climate justice, and we can’t do this without investments that uplift a transition to a low-carbon society while tearing down the barriers that drive inequality, whether based on gender, sex, class or race.”
As the BlackLivesMatter movement and message ripples across the world, the impact investment community has an opportunity to turn George Floyd’s unheeded cry into universal call for all humanity. This is our opportunity to do more and do better.
