ACCESS Advisory

Inclusive Green Finance Series #2: Typology of climate-related activities that need financing (part 1)

As discussed in the previous post, one of the key risks in climate finance derives from the fact that a financial institution’s loans could contribute to climate change. However, although it is critical that financial institutions ensure that their loans do not contribute to climate change, this is the minimum standard for green finance. Excluding such loans also does not help the financial institution grow its portfolio. Addressing climate issues and growing the portfolio requires financial institutions to proactively make loans.

There are many different types of climate related activities that need financing. Based on the draft EU sustainability reporting standards developed by the European Financial Reporting Advisory Group (EFRAG) and approved as of 22 November 2022, the typology of climate related loans includes:
- Mitigation
- Adaptation
- Promoting biodiversity and eco-systems, including water
and marine resources
- Reducing resource usage through circular practices
- Pollution prevention

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Inclusive Green Finance Series #2: Typology of climate-related activities that need financing (part 1) | ACCESS Advisory As discussed in the previous post, one of the key risks in climate finance derives from the fact that a financial institution’s loans could contribute to climate change. The most important factor, especially in the Asia-Pacific region, is when forests or other land is developed for farming (known ...

Gender Issues in Financial Inclusion Series 3:
Drivers of the Gender Gap in Financial Services, Part 2:

Supply side gaps

While gender norms affect financial inclusion from the demand side, how financial service providers (FSPs) respond to those norms has a dramatic impact on women’s inclusion. There are two main factors on the supply side that negatively affect how FSPs serve women. The first is that FSPs do not invest enough in serving women. Many consider women less bankable than men because women-owned businesses are often smaller, as are their profits. Women are also considered to be more risk averse than men.

Second, even when FSP claim to target women, it is often with “gender-neutral” processes that work against women. For example, loan or deposit withdrawal applications that require their husband’s signature, or loan terms that include mandatory savings or require attendance at training, can discourage women. Marketing materials that do not directly target women or show women as clients reinforces the perception that financial services are for men.

Financial sector interventions that support FSPs to proactively focus on women as clients cover both product design and operations.

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