While we cannot predict what the impact of the current coronavirus crisis will be in Africa and South Asia, we do know that we must support the businesses that we invest in through the course of the pandemic, as well as afterward to rebuild sustainably.
On July 15, Devex and the CDC Group convened a group of experts to discuss COVID-19’s effect on women’s economic empowerment and livelihoods — as well as to explore solutions for ensuring their access to finance, job opportunities, and career growth.
As my colleagues at CDC Group have highlighted throughout our event series with Devex, our first priority as the United Kingdom’s development finance institution has been to preserve the viability of our current investee businesses so that they can support their employees and protect jobs.
This has particularly been the case in those sectors most affected by COVID-19, where it’s been crucial to act to protect the positive environmental, economic, and social impacts of these businesses. That’s why we are providing technical assistance, guidance, and working capital to many of our portfolio companies — to improve their resilience and protect jobs.
We’ve also been thinking about the impact that the pandemic is having on our areas of strategic focus, including gender equality and climate change — both at the center of the event series. At this critical time, it’s key that we don’t lose sight of these longer-term commitments and that we think about the opportunity they provide as we rebuild economies and societies.
The expected impact of every investment we look at is assessed through the lens of a development impact framework that considers gender equality and sustainability alongside other impact targets, such as job creation or provision of credit, goods, or services. This helps us play our part in achieving the United Nations’ Sustainable Development Goals, including poverty reduction, by supporting businesses in a way that is inclusive and resilient to a changing climate.
One way we can increase resilience to future shocks is by supporting a growing, inclusive, and productive private sector.—
How has the pandemic affected existing vulnerabilities and issues?
As the final event in the series highlighted, the impacts of COVID-19 are particularly felt among women. For example, according to the World Health Organization, women represent 70% of health and social workers worldwide and are therefore at higher risk of virus exposure.
Globally, women are also more vulnerable to losing their jobs as a result of the crisis because they often work in sectors more likely to be negatively affected by coronavirus disruptions. They are overrepresented in low-skilled, low-paid, and informal jobs in sectors such as manufacturing, agriculture, and consumer services, and they therefore face higher risks of job- and income-insecurity. In fact, analysis by Citigroup found that $1 trillion could be lost from global growth as female workers fall out of the workforce during the pandemic.
Some of the issues we’ve assisted businesses with include the provision of adequately fitted and designed personal protective equipment for front-line female staff members, support of women working from home with limited access to technology, and ensuring gender-sensitive job protection plans. That’s why the guidance notes we’ve produced on job protection and remote working have been important to businesses, investors, and financial institutions considering how the pandemic may particularly affect women.
One way we can increase resilience to future shocks is by supporting a growing, inclusive, and productive private sector. Alongside our peers, we called for a gender-sensitive approach among investors in both immediate responses and longer-term recovery solutions to the COVID-19 crisis.
The pandemic has exacerbated preexisting challenges faced by women in the labor market, including those faced by female entrepreneurs in accessing capital and the lack of women in leadership positions.
This emphasizes the role that investors can play in addressing these issues — in working with financial intermediaries to support women’s access to finance or in helping champion a strong pipeline of female talent across the workforce to ultimately build stronger, better performing companies. Achieving higher representation of women in senior positions will take time, which is why it’s vital that this work start now.
Rebuilding while supporting the ‘net-zero’ transition
COVID-19 has meant some delays to the climate agenda discussions. 2020 was meant to be the year that the U.K. hosted COP26, the 26th United Nations Climate Change Conference. Instead, the pandemic pushed the event — the first “global stocktake” outlined in the Paris Agreement — to next year. However, despite those setbacks, the pandemic has also exposed opportunities to rebuild economies in ways that can support a transition to “net zero.”
The COVID-19 pandemic has highlighted the fragility of many jobs — and markets — across the globe. CDC Group’s Nick O’Donohoe argues that building resilience in the private sector today will ensure a swifter and more sustainable economic recovery in the months and years to come.
Helping businesses become resilient is not just about financially surviving future pandemics; it’s also about building businesses that can withstand the impacts of climate change, such as the increasing frequency and severity of extreme weather events. There’s much crossover between our plans to support our investees in the coronavirus’s wake and our recently published climate change strategy, which we will put to work in the recovery phase.
As part of that strategy, we’ll ensure our investment portfolio reaches net-zero emissions by 2050 — and we’ll make an investment only if it supports a country’s unique plan to meet its ambition to become a net-zero economy by 2050. We’ll also be investing more in sectors that deliver on climate and development goals, such as renewable energy and forestry.
We are also supporting a “just transition” to a net-zero economy by keeping the creation of decent jobs and skills development at the forefront of the change — something that countries will be very focused on when coming out of the coronavirus crisis. Finally, because we know that the countries in Africa and South Asia where we invest are particularly vulnerable to the negative impacts of climate change, we want to strengthen the adaptation and resilience of sectors, communities, businesses, and people.
This builds on work already underway with our investee companies. For example, at Zephyr Power, a company developing a 50-megawatt wind farm in Pakistan — and whose CEO spoke during the event series — steps are being taken to use “nature-based solutions” to protect the site from flooding risks that may emerge over time due to rising sea levels.
The unparalleled impact of COVID-19 across the globe has underlined the importance of ensuring business and economies are resilient to future shocks. But it’s also presented us with a unique and important opportunity to build back better. Supporting businesses to take steps to achieve this sustainable recovery will be crucial as we rebuild livelihoods and economies.