Gender-Transformative Climate Action: Shaping a Resilient Future

In this episode, Natasha Garcha, Senior Director of Innovative Finance and Gender-Lens Investing Specialist at Impact Investment Exchange (IIX), joins us to discuss the intersection of gender equality and climate resilience. We delve into gender-transformative climate action and how empowering women and marginalized communities is central to sustainable progress. 

Through initiatives like the Orange Movement, IIX aims to mobilize significant capital to support 100 million women and girls by 2030, driving climate action and fostering resilience across the Global South. Natasha will share insights on how gender equality can shape a climate-resilient future and the essential role of impact investing in achieving this vision.

Transcript

SPEAKER_03 0:00

Women are disproportionately impacted by climate change. But it is precisely because women are on the front lines of these problems. I strongly believe, and everything that my work has shown me is that they are not just victims, they are best placed to be the solutions.

SPEAKER_00 0:17

Welcome everyone to Impact Investing Music, a podcast series where we delve into the ever-evolving world of impact investing and aim to connect, educate, and share knowledge to drive capital towards impact. I'm Vikast Aurora, Chief of Impact Investing at AVPN.

SPEAKER_01 0:34

And I'm Jackie. In this episode, we explore the intersection of gender equality and climate resilience with Natasha Garter, Senior Director, Innovative Finance, and Gender Lens Investing Specialist at Impact Investment Exchange, IIX. Let's dive in.

SPEAKER_03 0:51

Okay, Natasha, thank you so much for joining us today. Thank you so much, Jackie. Such an honor to be here and so excited to talk about the nexus of gender and climate, two topics that are very, very close to my heart and very, very deep in my work.

SPEAKER_02 1:04

Yes, indeed, for me as well. Well, maybe to kick us off. Why don't you start with that? What the gender climate nexus is and why that's such a critical focus for you right now.

SPEAKER_03 1:13

You know, I think I don't have to advocate for the importance of the Anthropocene. We are off our targets for the Paris Agreement. I think climate change is now very much a reality for the world. But to be very realistic, we're not going to achieve this if half the population, that is women, girls, and even the LGBTQI plus community, are left out of the solution. So for me, I think disproportionately the gender climate nexus has focused on a very negative narrative. And I am hoping we can change that dynamic today through our conversation. It's always focused on how women are disproportionately impacted by climate change, which is 100% true. If you go to rural areas, if you go to low-income areas, if you go to the global south, you will see that whether it is a natural disaster or whether it's a lack of access to electricity, women bear the brunt of this. But it is precisely because women are on the front lines of these problems that I strongly believe, and everything that my work has shown me is that they are not just victims, they are best placed to be the solutions because they have this inherent edge, this uh understanding and and wisdom of what the problem is through lived experience. And I think that is really the the heart of the gender climate nexus is that we are we have the power to solve climate action, but we must be inclusive in the way we do it. And gender equality is going to be the pathway forward, in my opinion.

SPEAKER_02 2:38

What an amazing way to kick up this conversation. I think that really sets the stage. Um, maybe for those that are not familiar with you and for your work, would you like to just give a quick introduction to yourself and what you're working on right now?

SPEAKER_03 2:50

Absolutely. I have a background on Wall Street, used my first bonus when I hit a very, very early quarterlife crisis to set up a nonprofit focused on girls' education, but realized that it's probably not logical to work in silos and then shifted over to the impact investment space about a decade ago. I have had the great pleasure of working uh with the impact investment exchange, headquartered here in Singapore, on our gender lens investment work. Uh, I was part of our first gender equality bond, which also happened to be the world's first listed bond focused on gender equality. It was, however, very hard to explain what a gender bond was. If you ask people, everyone will have a different definition. But just as everyone has a different definition for what gender equality is, and this really inspired us to learn, in fact, from the green bond movement of how asset classes can bring a lot of definition and mobilize capital more effectively. That gave birth to the orange movement, which I'm now working very actively on. Orange is the color of sustainable development goal five, focused on gender equality. And I now work on making sure that the orange movement achieves its goal to mobilize$10 billion by 2030 and empower 100 million women, girls, and gender minorities.

SPEAKER_02 3:59

Wow, that's incredible. Tell me more about this orange movement.

SPEAKER_03 4:02

The orange movement, uh, I have to say, is one of those incredible pieces of work that started as an asset class. And it's not every day you get the joy of coming from Wall Street and then working on designing a new asset class. IEX is a woman-led firm, and I think it was very important for us to make sure women are front and center of financial markets. We wanted to leverage the fact that, you know, the bond market itself is for, you know,$5 trillion plus. And if we can redirect that towards gender equality, we wouldn't be 141 years away from achieving it. And so that's really the birth of why we wanted to uh work on the orange movement. It is, however, a movement. It's not just IAX. Give credit to uh everyone else who's on the steering committee with us. We have the United States International Development Finance Cooperation, we have the Australian Department of Foreign Affairs and Trade, we have Noven, one of the largest Orange Bond investors in the world. In fact, I think probably one of the largest sustainable uh finance investors in the world, ANZ Bank, water.org, and 250,000 signatories from all six continents. And I think that's what really makes it a movement, is there's a big focus on diversity, equity, and inclusion. And we wanted to make sure everyone, including the global south, has a seat at the table and a voice in shaping the movement. The movement allows you to be a part of not only driving forward forms of orange capital, but also being part of various projects to build that ecosystem and infrastructure. We worked with research organizations, we've worked with also just think tanks, we have data and technology tools. And I think it's really about building that infrastructure to make sure we can create a truly gender-empowered financial market. You've actually created a bond.

SPEAKER_02 5:41

How did you structure that to be able to mobilize that capital? How did it come about?

SPEAKER_03 5:45

Every orange bond is going to look different. There's an orange bond focused on Syrian refugees being reintegrated into economic livelihoods. There's an orange bond, as we speak, focused on affordable housing in the United States. But the ones that I have had the pleasure of working personally on and structuring is part of our Women's Livelihood Bond series, which got the orange table. And those bonds really focus on women at the last mile of underserved communities in Asia and Africa. We look at not only economic empowerment through financial inclusion-related investments, but we also structure it to have a multi-country, multi-sector portfolio. And a big part of that is actually making sure women are climate resilient. This includes making sure women have access to electric vehicles, to solar panels, to clean cook stoves, uh, all of that to mitigate emissions. And on the adaptation side, which is a significantly underfunded area, uh, we have investments into sustainable agricultural supply chains. Most of the food we eat is grown by a woman, even if she does not own the land. We're trying to change that. Uh, and also water and sanitation. Many of the wars that we're going to fight now are going to be over these kinds of land and water-related resources. And to make sure that women are a part of owning them and our stewards is a fantastic way for us to build keys and stability as well. So the orange bonds that I've had a chance to work on to our Women's Savvy Bond series, really focus on making sure these women at the last mile are getting access to orange finance.

SPEAKER_02 7:10

Yeah, I had the privilege of actually chatting with Rod Pandey from BCG, and he was talking about the financing gap adaptation and how how much of an urgent and pressing need that is. So it's interesting that you also bring this up. You mentioned about the last mile. What kind of mechanisms are in place to actually ensure the funding is effectively reaching that last mile and is reaching these women-led initiatives and underserved communities?

SPEAKER_03 7:33

You know, all of us, especially sitting here in Singapore, we talk a lot about data technology, uh artificial intelligence, and I think all of this is fantastic, but it's going to be most powerful when we use it to make sure the human element is brought forth. We at the Orange Movement have a commitment to making sure that we use data and technology to track the way capital reaches women at the last mile, to make sure that we are sending out, for instance, mobile surveys. Internet penetration is incredible across the markets we're working in. And most women will have access to a basic phone. It's 2024. There's no excuse that you can't reach women at the last mile anymore. You can, especially with the technology we all have access to. Is that we forget sometimes to use it to make sure these people have a voice. And so for us, it's been very much about making sure that we are using tech to give women a voice and to give them a value. I think it's one to collect the data from them to say, did you receive the loan? Were you benefited by it? But the more interesting part is the data analytics. How do you use that to shape investments? Our personal journey to the Women's Diabet Bond series, which are all orange bonds, was in our in the earlier issuances that we've did, we've done six to date and mobilized over$270 million. The first few issuances were very much focused on women's economic empowerment. But a lot of them had women who were smallholder farmers. And a lot of them would say, look, it's very nice to have this loan or to have a fair trade model where we're getting paid a fair price. But honestly, with climate change as a reality, we're not going to be able to improve our yield or our earnings. And so we're going to get into this debt trap. Using that data to make sure that all our loans had climate action plans to say, if you're working with a woman smallholder farmer, she needs to be climate smart and you need to give her that support as well, has really allowed us to have a very transformative impact, to change the way we design orange ponds. And I think that's the real power. You not only to make sure funds were used the right way, but that we learned from the women and that we are recognizing, as I said before, that they are solutions to these challenges, but we need to listen to them. And tech is the way we've been doing it.

SPEAKER_02 9:37

Is that technology that you built yourself? Or are you doing that in strategic collaborations and partnerships with other organizations?

SPEAKER_03 9:42

You know what? This is an interesting story. I think we had women everywhere from small islands in the Philippines to women growing tea in mountains in Kenya. And I think for us, it was about how do you actually reach these women? And it became a real need during COVID when my team couldn't fly to the field. And so for us, we immediately used our existing impact management platform, digitized it, made sure that we were able to do that. We had support from the Singapore government to do that. We've had support from the Australian government to build that out with an orange lens. And so with that sort of support, we've been able to make sure that now we have uh the ability to send out surveys to women in all countries. I think there's uh 15 plus languages and 10 plus sectors, you can also customize the surveys uh to quite an extent and make sure that you are capturing this data from the last mile. But it was really built out of need. And I think some of the most powerful tools that the world has is things that were built during a crisis.

SPEAKER_02 10:36

I think that's a whole other podcast on its own, just to learn about the technology and how you've been able to collect all of this data.

SPEAKER_03 10:42

Absolutely. I think one of the interesting things for me, I was on the advisory council for the green and social bonds. And the big issue that investors had with these thematic asset classes was greenwashing and impact washing. And I think it was, it's, it's a real struggle in the industry. And it's often not, it's not talked about enough. It's talked about enough to be mildly annoying, but not enough to talk about the solutions. And so for us, when we thought about orange, we said there has to be a solution that we learned from what the green bonds and the social bonds have gone through. And so tech was the way we decided to make sure that we're not only breaking the digital divide that women have faced, but also making sure it's a very data-driven, evidence-based approach to bring a human element and bring greater transparency into orange than we've seen in other thematic asset classes.

SPEAKER_02 11:28

I can imagine that being quite a difficult challenge to navigate. What are some of the other challenges that you've seen when you're trying to mobilize capital in these regions, especially in the global south?

SPEAKER_03 11:37

I think one of the um challenges that that is a bit of a myth is if you talk to investors, they'll say there's no pipeline. If you talk to companies at the last mile, they'll say there's no capital. And this demand and supply mishap that we see in the market really needs to be solved with innovative financial structuring. And I really hang everything that I learned from Wall Street. That the things I learned not to do, but the things that I learned that we should be doing, which is using financial innovation for good instead of using it to make that extra edge. You know, I used to work at a hedge fund and so forth. So it was all about arbitrage, but really financial innovation used the right way should be creating more value. And so for us, uh, we use blended finance. I think one of the big challenges that you also face when you're looking at emerging markets is for we're investing in countries like Cambodia and Ghana and in uh uh communities at the last mile and in Vietnam and Kenya. And so for us, we're not working with channeling investments into uh large uh developed markets. And so there is obviously the credit rating that these sovereigns have uh already that that allows uh you to think very carefully about how do you balance the other side of innovation is risk. How do you de-risk these investments? And for us, we've been very fortunate to have very strong de-risking partners. So I will call attention to the fact that Swedish International Development Agency has been one of the guarantee partners for our bonds. And I think that gives investors a lot of comfort to say we understand the capital is going to the last mile. We do want to see that impact. Uh, but to have a risk-adjusted return, it is very helpful to have a government come in and say, look, we're we're backing this bond, we've diligenced it, we're supporting it, we're a guarantee partner. So that's one of the challenges I've seen on demand and supply, the need for blended finance, an example of leadership from Sweden to help solve some of that.

SPEAKER_02 13:21

And what about in terms of opportunities for the impact investors that are listening?

SPEAKER_03 13:25

I think there's three things that can be done. I think first, of course, you know, an easy one is to obviously join the orange movement. As I mentioned, there are about 250,000 signatories across the world. Joining the movement allows you to learn more about these investment opportunities. And I think that's where it starts. The second is using the tech platform I mentioned to make sure your existing investments are being mapped in a gender-disaggregated way. We do provide an orange seal when someone goes to the impact uh tech tool that we have called uh using our um orange rating methodology. And so that orange seal is a way that you can assess whether your existing investments or anything you're considering has that very clear gender lens. And the third thing I think that you can do is to actively request the next time a green bond comes across your desk is to request it to uh include an orange label as well. And then just to make sure that sure you're you're looking to fund climate action, but can you also have an environmental justice angle to it where you make sure that women who've been historically left out of this uh solution are empowered to be a part of it? And as I mentioned, we see that as a wonderful way to de-risk your investments as well. Women are the most incredible repayers on the world. When I was on Wall Street, just a very quick side anecdote. I was there during the financial crisis of 2008. And the one asset class that was doing very well was microfinance because most of the beneficiaries were women because they're incredibly responsible repairs. So for us, it's a it's a double win if you have not just the greenlands, but also women to de-risk your investment and to give you that extra edge of impact and social co-benefits.

SPEAKER_02 14:57

Incredible. Now we spoke a little bit about the orange movement. I'm not sure if we clarified for those that are not familiar with this orange label. Can you just help define what exactly is the orange label?

SPEAKER_03 15:08

Yes. So the way a bond could get a green label if they're focused on environmental issues, typically climate action, but it could also be biodiversity, nature-based solutions. Orange uses that, as I mentioned, inspired by the orange hue of UNSDG5 on gender equality, is a similar label that you would use for a bond that focuses on making sure that women, girls, or uh gender minorities are sort of the central to the way you think about how the proceeds are used. Uh, I don't like to use the words beneficiaries because I feel like that lacks a little bit of dignity uh to it. But for us, there are three key principles that make the bond orange. So first is you have to make sure obviously your proceeds are used to empower women. Uh, and we don't just mean women on in leadership. It's not just about women-led enterprises or women on boards. That works very well in some parts of the world, and we are doing that for uh some issuances in some parts of the world. But in other parts of the world, like where I'm from, Asia Pacific or Africa or uh Latin America, it's women in supply chains. It's women, as we've been talking about, accessing clean energy products. It's about women accessing financial services, it's about women in the workforce of textile factories. And I think when you expand that definition, that's principle one is you're taking a very customized, localized view to what gender equality needs for that region and you're investing accordingly. The second principle, which makes a bond orange, is something I really admire because it looks at the issuer, who's issuing this bond? And are there women on that team? Are there women on the investment committee? Are there women on the team who designed the bond? Are there women from the region that you're investing in? So, for example, with our women's cyberhood bond that we issued last year, we had uh 40% women on the investment committee, 68% women on the core team, and 90% were from the regions we're investing in in Asia and Africa. That intersectional approach is also very important where race and gender play off each other. Uh, and I think the the investments uh we've never had a default to date. And I think it's because we have women thinking through this. Uh, gender equal teams are more powerful always. The last principle is to verify your impact. You're an orange bond only if women at the last mile have verified that it is indeed orange. As I mentioned, we're using CAC to do that for transparency purposes. But you can't call yourself an orange bond if the women you're saying you're benefiting cannot uh vet that.

SPEAKER_02 17:26

Wow. So they're actually part of that process to validate and verify their own kind of orange label in a way. Exactly. And I think that's why it's so empowering. Those the final decision makers are the women themselves. Yeah, absolutely. So you mentioned so many different partners. I know AVPN and IX are working together as well. How do these collaborations and partnerships really enhance the impact like the orange movement?

SPEAKER_03 17:50

You know, collaboration has been very key. For instance, uh, there's three main ways we collaborate. One is when we are using the orange label, we have a number of uh amazing organizations across the world who are trained to uh through our orange bond verification training program to use the label. For instance, Sustainable Fitch, uh Morningstar are all trained to actually label a bond orange. So the next time someone asks them to rate a bond, they can also tell you whether it's orange. Uh so that's one fantastic example of using existing market leaders to bring a gender lens into their work. The other uh collaboration that I'll mention is with our steering committee, when we wrote these principles, we actually ran them by a hundred stakeholders. So we had bankers, investors, and human rights experts and gender experts who all came forward to the table. Australian Department of Foreign Affairs and Trade really led the charge on that to make sure civil society had a voice. And I think that's a wonderful way to collaborate. As you mentioned, they often get left out of these conversations. So these Orange Bond principles were really written by a very holistic group of ecosystem actors. And the third way I think collaborations work, and I think this is why we really enjoy working with groups like ADPN, is making sure that we are building awareness in the market. This is a new label in the market, and we are now hosting an orange forum in collaboration with the Singapore Stock Exchange. And I think it's been very important for us to work with folks like the Singapore Stock Exchange to make sure that we are building that awareness that listed products and mainstream products can and should have an orange lens. What do you see looking ahead with other financial instruments? Perhaps, what are some of the next big steps you see? So I think one of the big exciting things we're seeing, you know, Bangladesh as a sovereign recently announced that the next time they do their series of sovereign bonds, up to a billion, they will include the orange label. And I think that a big uh step that I'm seeing is many countries are now stepping up to say, look, we're already thinking about green. We need to think about orange in parallel, especially if there are countries who are based in the global south where climate change is a reality and where gender equality is seen as part of the solution. I think that's truly transformative. So Bangladesh is one example of how I see the public sector really embracing all of this work that the private sector has already pioneered to the existing orange bonds. So very excited to see more sovereigns embrace this. We have done some incredible work in Indonesia along with the Ford Foundation. We uh had some very exciting conversations with the South African government who are hosting G20 next year, who are and who are very keen to bring orange into the country. And I think we're really going to see a lot of sovereigns now embrace this, which will really be a very powerful signal for everyone else to follow suit.

SPEAKER_02 20:27

What a perfect way to end the conversation. Thank you so much for sharing. I'm sure there's lots of impact investors that would love to hear more. And I'm sure they'll be checking out your website and learning all about the orange movement and hopefully becoming a signatory.

SPEAKER_03 20:41

Absolutely. Many thanks to AVPN for their incredible leadership. Thank you for having me today. Thank you so much.