Women's financial resilience: the key to advancing climate action

Economist

21-05-2025

Scientists recently confirmed that 2024 was not only the warmest year on record globally but also the first year to exceed 1.5°C of warming above pre-industrial levels. We're already seeing global warming's devastating consequences across the world, including more extreme heat, increased droughts and rising food insecurity, ultimately pushing millions into poverty and sickness.
Currently, more than 90% of climate finance is focused on mitigating climate impacts, with only a drop in the ocean of total climate finance being spent on building resilience to the changes that are already threatening the health and livelihoods of millions of people. Our most vulnerable communities are left unprepared for current—and future—climate shocks. And it's not only money on the table that's missing from these lives. The topic of resilience is missing from climate conversations—most notably for me when I attended the World Economic Forum in Davos earlier this year or more recently the Spring Meetings in Washington DC.
Yet we can't build climate resilience without first ensuring financial resilience—especially for women. That includes ensuring access to basic financial services such as digital payments, savings, credit, and insurance. Today, 753m women in the most climate-vulnerable countries lack even the most basic financial services such as access to formal savings accounts and insurance products that protect their assets and livelihoods from climate impacts. Women's World Banking has calculated that today, 880m women don't have access to digital payments, meaning they have no way of receiving emergency relief payments from governments or support organisations in the aftermath of a climate disaster.
The millions of women around the globe bearing the brunt of climate impacts cannot wait. Research shows that women are 14 times more likely than men to die in climate-related disasters, and climate change is predicted to push 158m more women and girls into poverty by 2050. But what if there were a way to advance climate action while also lifting millions of women out of poverty?
Why financial services and climate resilience go hand in hand
Financial services play a critical role in helping women adapt to, mitigate and endure the effects of climate change. Let me introduce you to Rekha Devi, who owns a small embroidery and carpet-making business in Shahjahanpur, India. In 2023 the government's financial-inclusion programme, Pradhan Mantri Jan Dhan Yojana (PMJDY), provided Rekha with a lifeline when monsoon floods devastated her area. A few years earlier, Rekha had been encouraged to open a bank account at Bank of Baroda and, despite her irregular earnings, she had managed to save US$6 five times a year.
Her small but constant savings, alongside two rounds of government relief payments deposited directly into her bank account, provided much-needed financial security when the monsoon displaced Rekha and her children. In addition, an important product enhancement, created in partnership with Women's World Banking and Bank of Baroda, also let Rekha's regular savings habit unlock an emergency loan of US$115. The credit allowed the family to return home, and for Rekha to make essential home and business repairs.
Rekha's story showcases how access to the most basic financial services, combined with savings habits and government support, not only ensure survival but can empower low-income women to navigate the climate crisis and build their resilience.
Women's climate resilience doesn't have to depend on development assistance
Despite the clear benefits of investing in women's financial resilience and the many effective, scalable financial solutions that already exist, only a miniscule part of climate finance is directed to women and girls. As development assistance budgets in the United States and Europe decline, the need for self-sustainability becomes even more urgent.
That's where financial service providers—in partnership with governments—come in. By providing access to basic financial services (including through national financial-inclusion schemes like India's PMJDY) to the broadest number of clients, we can ensure that women are able to prepare for and respond to climate shocks. And we can do that while greatly reducing dependence on international development assistance. Women's World Banking is dedicated to reaching the nearly one billion women who are underserved by the formal financial sector and works closely with financial-services providers across the global south to develop products and services that not only meet women's needs but are financially viable for the provider as well.
A word about insurance
The case for providing savings and credit is clear and, while insurance represents the 'third leg of the stool' in building financial resilience, only 1% of the world's population currently has climate-related insurance. SwissRe estimates that relative to GDP, the insurance loss burden from catastrophes has more than doubled over the last 30 years, and it could double again in the next decade. Property and casualty insurance undeniably assist individuals and families in recovering from natural disasters, while access to health insurance helps people deal with climate-related illnesses such as respiratory diseases caused by air pollution. Insurance provides an essential part of the foundation upon which communities and individuals can recover from climate-induced catastrophes.
Research shows that insurance is at the centre of a virtuous circle. Insurance premiums are largely unaffordable for most people until GDP per capita reaches a certain level, but increased levels of insurance result directly in higher GDP growth—leaving us with a financial 'Catch 22' situation.
For every 1% increase in insurance penetration, there is a 0.5% rise in GDP growth, underscoring the crucial role insurance plays in advancing economic development and the Sustainable Development Goals. Here is where development assistance and philanthropic capital can play a hugely catalytic role: by subsidising premiums to expand the number of people who are insured, while also spreading much-needed awareness about how insurance works and its benefits.
We only have five more years to make progress on the SDGs and other climate commitments, but we cannot stumble at the finishing line just because it seems ever more difficult to reach. Instead, we need to prepare for a sprint. There is no economic growth and sustainable development without women's financial inclusion—just like there is no way to address the climate crisis without improving women's resilience.