This chapter explores opportunities for DAC members to increase the quantity and quality of financial resources for gender equality and the empowerment of women and girls. This will be necessary to deliver change, including both official development assistance (ODA) and financing flows beyond ODA. It addresses how the DAC gender equality policy marker works as an accountability tool.
Gender Equality and the Empowerment of Women and Girls
DAC Guidance for Development Partners
4. Financing for gender equality and the empowerment of women and girls
Abstract
There is a need to increase the quantity and quality of financial resources available for gender equality and the empowerment of women and girls in partner countries. Financial resources, while not an end goal, are a necessary foundation. Sufficient financing is a prerequisite for ensuring capacity to develop relevant policies and strategies for gender equality, to undertake gender analysis, to set up partnerships and implement development programmes with the necessary technical expertise, and to undertake monitoring, evaluations, learning and ensure accountability.
Development Assistance Committee (DAC) members’ official development assistance (ODA) is an essential external financing resource for especially for low-income and fragile countries. DAC members can also leverage their ODA to mobilise other types of development and commercial finance for gender equality. In addition, they can increase funding by targeting their “other” official flows towards gender equality – including financing that does not qualify as ODA and that is typically provided through development finance institutions.
4.1. Bilateral aid for gender equality is on the rise but could be increased
The shares and amounts of bilateral ODA for gender equality and the empowerment of women and girls by DAC members have been increasing consistently. The rise can be attributed mainly to bilateral aid integrating gender equality as one explicit, although not the principal, objective of development projects or programmes. This is a positive trend, because integrating gender equality objectives in programming across sectors is an essential component of achieving gender equality and sustainable development.
However, both dedicated aid (scoring 2 on the gender marker) and integrated aid (scoring 1 on the gender marker) are needed for gender equality and the empowerment of women and girls. This broadly mirrors the twin-track programming approach of mainstreamed and dedicated support for gender equality set out in Chapter 2. Aid dedicated to gender equality as the principal (dedicated) objective has remained consistently at around 4% to 5% of bilateral allocable aid.
DAC members should pursue financing for gender equality and the empowerment of women and girls through the twin-track approach, by aiming to increase the shares of ODA that integrate and is dedicated to gender equality and the empowerment of women and girls.
Because dedicated funding for gender equality is limited, such funding can focus on programming that helps to address the root causes of gender equality and achieve transformative change for gender equality, in regions and countries that are familiar to the DAC member and where the member has an added value.
The DAC gender equality policy marker: Measuring ODA for gender equality for two decades
When reporting development finance to the OECD, DAC members assess the extent to which their bilateral ODA addresses gender equality and the empowerment of women and girls by applying the DAC gender equality policy marker at the planning phase of development activities. A project or programme should be classified as contributing to gender equality if it is “intended to advance gender equality and the empowerment of women and girls or reduce discrimination and inequalities based on sex” (OECD, 2020[1]) (Box 4.1). As contexts evolve and programmes may need to be adapted, the marker score can be adjusted as relevant in the coming reporting to the OECD.
The OECD collects such data and makes it publicly available on the OECD.Stat website. (OECD, 2022[2]) The gender marker is an integral part of the OECD Creditor Reporting System (CRS), along with other policy markers. DAC members also report each project/programme’s sector/thematic area, channel of delivery, country focus, type of financial flow, etc., and are expected to provide descriptions of each project or programme.1 The gender marker is the only common monitoring and accountability tool for DAC members to track aid in support of their commitments to gender equality and the empowerment of women and girls.2 It is designed to monitor inputs rather than outputs.
The data collected through the marker allow for comparison and not only help identify gaps between policy commitments and financial allocations, but incentivise efforts to close those gaps. The marker has also provided an opportunity for awareness-raising and policy discussions around gender equality amongst staff in DAC member institutions, going beyond the technical aspects of the tool. The marker has helped increase attention to and accountability for gender finance. Data is consistently used in DAC peer reviews and by a range of researchers and advocates, and it is published annually (OECD, 2021[3]).
The marker can also help increase awareness, understanding and commitment in looking for opportunities to address gender equality in different portfolios. Internal training opportunities and exchanges about the marker allow for policy discussions and complement the technical application of the marker. Some DAC members also use the marker and its scores as a basis in policy discussions on gender equality with partner governments (European Commission, 2020[4]).
The simple division in three of the gender marker scores allows for a relatively easy application. However, some DAC members note difficulties in determining the score of projects/programmes. Other DAC members find the gender marker too blunt a tool and have adapted its use for a more granular approach. Some use a four-point scale to respond to internal needs and translate these into the three scores of the DAC in reporting to the OECD. Some DAC members note that certain programmes with a gender lens or a low level of gender mainstreaming fall into the “not targeted” (score 0) category when reporting to the OECD, giving a false impression that these programmes are not gender-sensitive at all.
DAC members need to ensure that staff understand and correctly apply the DAC gender equality policy marker scores at the design stage of all programmes, and provide tools and training for staff as needed.
Box 4.1. Methodology of the DAC gender equality policy marker: Monitoring policy intentions
The DAC gender equality policy marker is based on development partner intentions at the design stage of programmes or projects. The marker definition states that an activity should be classified as addressing gender equality (score Principal or Significant) if “it is intended to advance gender equality and the empowerment of women and girls or reduce discrimination and inequalities based on sex.” The eligibility criteria are that “Gender equality is explicitly promoted in activity documentation through specific measures that:
1. reduce social, economic or political power inequalities between women and men, girls and boys, ensure that women benefit equally with men from the activity, or compensate for past discrimination
2. develop or strengthen gender equality or anti-discrimination policies, legislation or institutions.
This approach requires analysing gender inequalities either separately or as an integral part of agencies’ standard procedures.
It is applied to bilateral “allocable aid”, including humanitarian aid. Bilateral allocable aid includes support to specific multilateral funds, pooled funding, support to civil society, sector budget support, donor country personnel and other technical assistance, and scholarships in the DAC country.
Bilateral allocable aid, as opposed to “bilateral aid”, does not include types of aid for which it is not possible to identify the development partner’s policy intention, such as: general budget support, core contributions to multilateral institutions, imputed student costs, debt relief, administrative costs, development awareness in DAC member country and refugees in DAC member countries. These aid categories are excluded from any reports and analysis on aid for gender equality published by the OECD.
Table 4.1. The three scores of the marker
A principal score is not by definition “better” than a significant score. A twin-track approach to gender equality across members’ development co-operation portfolios is needed, combining dedicated/targeted interventions – usually score 2 – with integrated aid, or gender mainstreaming – usually score 1.
All DAC policy markers apply to development partners’ spending commitments. As such, they measure planned investments and not disbursements. Spending commitments are defined as “a firm obligation, expressed in writing and backed by the necessary funds, undertaken by an official donor to provide specified assistance”. There is very little gap over time between commitments and disbursements, but there can be some lags in the case of pluri-annual disbursements (aid paid in several instalments). Commitments are recorded in full at the time they are made, even if they are multi-year commitments, and irrespective of when they are disbursed. DAC policy markers apply to commitments because they provide a forward-looking picture by giving information about future expenditure, and fluctuate as aid policies change, and therefore better reflect development partners’ changing political commitments.
The DAC policy markers measure inputs. They cannot and do not intend to measure the outcome or impact of a programme or project. They need to be complemented by monitoring and evaluation instruments to assess results (OECD, 2016[5]).
As is the case for all of the DAC policy markers, some inconsistencies in reporting against the gender marker can be observed. To respond to this, the OECD-DAC Network on Gender Equality (GENDERNET) prepared guidance on using the marker and also recommended “minimum criteria” (OECD, 2016[5]). These GENDERNET criteria are recommended rather than mandatory and are subject to inconsistent application by DAC members. An OECD review of the gender marker showed incongruences between the value of the marker and the title and description of the projects and found that development finance providers do not coherently report similar activities with similar scores. The review recommended steps to improve reporting quality, including establishing guidance on how to treat similar types of aid activities, adopting regular quality check mechanisms, and continuing learning and exchange (OECD DAC Working Party on Development Finance Statistics, 2020[6]).
In addition to the DAC gender equality policy marker, the OECD CRS tracks aid to two areas relating directly to gender equality and the empowerment of women and girls, captured in “purpose codes”: aid to feminist, women-led and women’s rights organisations and movements, and institutions, and aid for ending gender-based violence. Aid reported against one of these “purpose codes” is by default given score 2 (principal) against the gender marker (OECD, n.d.[7]). DAC members should make efforts to report their programmes correctly against these codes.
Application and quality control of marker scores
For the majority of DAC members, programme managers apply the score of the gender marker. It is positive that gender equality experts help to ensure the quality of reporting against the gender marker.3 It is equally important that statistical units and reporters in DAC member institutions be familiar with the gender marker and are able to liaise with programme managers and gender advisers as needed and relevant, to ensure quality control and correct reporting to the OECD.
DAC members should aim to increase both the quality and the level of detail of descriptive programme information provided when reporting aid statistics against the gender marker to support accountability and transparency. As the DAC GENDERNET, members can also review the Handbook on the DAC gender equality policy marker.
Box 4.2. DAC members’ practice on applying the DAC gender equality policy marker
Weekly checks within Sida
In Sweden’s International Development Co-operation Agency (Sida), the programme officer applies the DAC gender equality policy marker once a new programme is agreed upon. The agency’s statistics team go through all new programmes on a weekly basis, checking the programme descriptions and, when needed, programme documentation to ensure that the marker score is correct. Should any questions arise, the statistics team liaises directly with the programme officer, using the GENDERNET Handbook as the basis.
In parallel, an automatic system picks up on basic logical errors, for example if a programme reported in the “ending violence against women and girls” purpose code does not score 2 against the marker. Before the annual reporting to the OECD CRS, additional spot checks are conducted.
The agency also organises training for staff around the DAC markers, including around why reporting is helpful and important. This approach allows for correct reporting but also for dialogue and awareness-raising around the gender marker and around gender equality more broadly within Sida.
Guidance and thematic statisticians in the United Kingdom
A review of DAC gender marker scoring by the United Kingdom in 2017 demonstrated the need to improve scoring against the DAC gender equality policy marker. In response, the department added guidance on its internal Aid Management Platform to support programme managers, who apply the marker score for new initiatives.
Once the policy marker scores have been allocated by programme managers, thematic statisticians working in the specific policy area verify the data and change anything that is noticeably incorrect. Gender marker scores are verified by statisticians responsible for disability and inclusion. Any more complex decisions around scoring that may need amendment are referred to the gender equality team which, if needed, also liaises with the programme managers. The central statistics team of the Foreign, Commonwealth and Development Office manages reporting to the OECD.
Checklists and a traffic light system in the Swiss Agency for Development Cooperation
The Swiss Agency for Development and Cooperation (SDC) has developed a checklist defining minimal standards for the DAC gender equality policy marker, as a complement to the Handbook. This checklist is a mandatory annex for each programme and contribution to partner organisations, and is verified when discussing and approving them. The SDC gender equality team has also made efforts to raise awareness about the policy marker and the use of the checklist, which was also addressed in staff trainings on gender equality.
SDC has identified financial targets using the DAC marker, and the gender equality team monitors and reports annually on respective achievements to different departments, using a traffic light concept of red, orange or green. The monitoring also includes the quality of annual reports from country offices, in terms of integrating the gender perspective. If declining figures resulted in a red light, this provided an opportunity for discussions on gender equality with different levels of management and fine-tuning of financial targets by department. This has also increased efforts to revise programme portfolios and budgets to increase focus on gender equality.
Financial targets
Several DAC members have set quantitative targets for their ODA for gender equality, and some are considering establishing targets. 4 Most DAC members that have set financial targets state that these not only help guarantee more aid for gender equality and the empowerment of women and girls but also incentivise and raise awareness in their organisation by setting the stage for constructive discussions across teams. The targets can also to some extent help ensure long-term policy steering, despite shifting political priorities. In some cases, financial targets have allowed for honest discussions with management and lead to definition of more realistic targets, including adjusting targets by sector/department. However, any financial targets need accompanying measures, including leadership commitment, human resources and expertise, as well as a clear understanding of the criteria for the DAC gender equality policy marker.
Potential challenges of establishing financial targets include the risk of “gender-washing”, since organisations may simulate working on gender equality in order to ensure funding from the DAC member. Targets for gender equality may also be perceived as setting up competition with other cross-cutting issues and sectors. It may also be difficult to identify the “right” financial targets in each sector, and targets may risk becoming a “ceiling” rather than an incentive. The DAC as a community has not so far discussed setting a common target for bilateral aid that integrates or is dedicated to gender equality.
Where and how ODA for gender equality is allocated
Most DAC members channel most of their total aid for gender equality through multilateral organisations and/or established civil society organisations based in DAC member countries. These organisations tend to have the advantage of economies of scale, with systems and processes that are equipped to handle large amounts of resources and to respond to DAC members’ reporting requirements (OECD, 2020[8]; OECD, 2020[9]). A very limited amount of funding is channelled directly to local women’s rights organisations based in partner countries. A couple of DAC members provide large amounts of aid to programmes integrating gender equality implemented by partner governments, but in general, financial support directly to partner governments is limited. Support for gender equality through the private sector is relatively limited but increasing.
Aid for gender equality is spread over various sectors, with the largest volumes consistently committed in the governance sector. Other sectors that receive high volumes of aid with gender equality objectives are education, health and reproductive health, and economic infrastructure and services. These financial allocations seem to correspond roughly with DAC members’ policy priorities for gender (see Section 1.2). Two sectors that stand out as having consistently low shares of aid addressing gender equality are energy and humanitarian aid (OECD, 2016[10]). This is noteworthy, given the strong policy focus on gender equality in humanitarian aid in particular.
DAC members should ensure that aid allocations for gender equality and the empowerment of women and girls align with policy priorities, and their global and regional commitments.
Total Official Support for Sustainable Development
The Total Official Support for Sustainable Development (TOSSD) statistical framework has been developed to present a global picture of resources in support of the 2030 Agenda. TOSSD stakeholders go beyond DAC members, and the aim is to obtain reporting from all development actors, including South-South co-operation (SSC) providers. TOSSD aims to keep the reporting form simple, so that it is accessible to new reporters.
TOSSD measures financing from the recipient perspective and includes partner countries’ receipts of ODA, Other Official Flows (official development finance beyond ODA), triangular and South-South co-operation, and private finance mobilised by official efforts – as long as they comply with the definition of sustainable development. Expenditures at global and regional levels for international public goods are also considered in TOSSD. When reporting on TOSSD, the reporters identify which SDGs their financing is targeting, including SDG5. Up to 10 SDGs can be reported on a single TOSSD activity. TOSSD does not specify whether the programme is dedicated to gender equality (principal) or mainstreamed (significant).
4.2. Making all development finance work for gender equality
The past few years have seen an overall increase in development finance beyond ODA and also an increased interest in finance other than ODA that addresses gender equality and the empowerment of women and girls. Capital markets are crucial sources of long-term funding to help close the SDG financing gaps and mobilise capital for sustainable development. The Addis Ababa Action Agenda, adopted at the Third International Conference on Financing for Development in 2015, aligns all domestic and international resource flows, policies and international agreements with economic, social and environmental priorities.
Development finance institutions and banks, private investors, commercial actors and private philanthropy are intensifying investments with a “gender lens”, recognising that gender-lens investing (GLI) is smart investing that can both help increase return on investments and contribute to leaving no one behind in developing countries. GLI is defined by many as integrating a gender equality into the financial analysis and decision making processes of an investment. Other more holistic definitions refer to deliberately incorporating a gender analysis into a financial analysis to achieve better outcomes (VERIS Wealth Partners, 2018[11]). Most definitions and criteria for GLI revolve around investing in women-owned or women-led enterprises, investing in enterprises that promote equal opportunities in the workplace (in staffing, management, boardroom representation, and along their supply chains), and/or investing in enterprises that offer products or services that substantially improve the lives of women and girls (GIIN, n.d.[12]).
Many DAC members engage with different types of private actors and use financing tools beyond ODA for gender equality, including by partnering with commercial actors and/or private philanthropy, and setting up blended finance vehicles with development banks and development finance institutions (DFIs).5 Financing approaches range from prioritising commercial return to prioritising social return (OECD, 2020[13]) (Infographic 4.1).
While funding beyond ODA cannot replace aid, and ODA will remain a key tool for funding gender equality and the empowerment of women and girls, DAC members can partner with a range of actors and mobilise additional funding for gender equality using their ODA, their expertise on gender equality and policy dialogue as leverage.
There is scope for better integration of gender equality throughout the cycle of the investment from planning, to implementation, reporting and lessons learned.
DAC members can support or leverage various types of dedicated investments in gender equality, gender-lens investing and the integration of gender equality objectives in development and climate investments. Gender-smart climate finance is relatively new, but it is growing fast as more investors apply a gender lens to their investments, and as evidence for the business case increases (2X Collaborative, 2021[14]). At the very least, all financing, including foreign direct investments and climate finance, should apply safeguards and should not have a negative impact on gender equality.
Infographic 4.1. Leveraging private finance can achieve social and commercial returns
Note: The different financing approaches can be seen on a scale of prioritising commercial return in grey on the left-hand side and prioritising social return, in blue on the right-hand side. These terms and categories are fluid and evolving – payment-for-success instruments, for example, can be used as a form of blended finance. Individual initiatives may include features of more than one type
Source: OECD (2020[13]), Putting finance to work for gender equality and women's empowerment: The way forward, https://doi.org/10.1787/f0fa4d91-en.
DAC members can adopt a variety of approaches to leverage additional funding beyond ODA for gender equality, including by:
partnering financially with private actors at all levels
providing guidance and financial incentives for financial actors to work on gender equality
providing technical support on gender equality for actors in partner countries.
These approaches, presented in more detail below, are interlinked and overlap.
Financial partnerships with investors and private actors
DAC members and private actors can complement each other and create important synergies to address gender inequalities by combining the private sector’s financial resources and innovation capacity with DAC members’ resources, expertise and ability. DAC members can set up, contribute to or leverage innovative structures, funds and instruments dedicated to gender equality and involve different types of partners, including commercial actors and private investors. Private philanthropy also plays an increasingly important role in the development finance landscape.
Participating in blended finance vehicles for gender equality
Blended finance is an important partnership approach to funding the implementation of the SDGs, with clear potential to drive gender equality goals. Blended finance is defined as the “strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries”. Here, “additional finance” refers to commercial finance directly mobilised by development finance interventions in a blended finance structure, which would not otherwise be directed towards development-related investments (OECD, 2020[1]).
Blended finance can use a multitude of financial instruments to achieve both development and commercial goals, including grants, guarantees, technical assistance, credit lines or bonds (see below for “gender bonds”), equity investments and debt instruments. It can be used across a range of sectors critical for achieving gender equality. Investors often associate investments in partner countries with an unfavourable risk-return relationship. An effective blended finance transaction should structure and/or calibrate financial instruments to address investors’ concerns about the risk-return profile of investment opportunities in developing countries. DAC members are already engaging in blended finance, although they are at varying stages in terms of the range of instruments used and how blending is carried out (OECD, Forthcoming 2021[15]).
In 2020, the OECD conducted a survey of 198 blended finance funds and facilities how their activities aligned with the SDGs, and to what extent they integrated or were dedicated to gender equality – aligned with the DAC gender equality policy marker methodology. Two-thirds (66%) of the assets under management of blended finance vehicles captured in the OECD survey were reported as either integrating or dedicated to gender equality. However, only 1% of assets under management were specifically dedicated to gender equality, indicating considerable potential to scale up blended finance dedicated to gender equality and the empowerment of women and girls. Of blended finance vehicles dedicated to gender equality in the OECD survey, the key rationale cited for dedicating these vehicles to gender equality was the high potential for return enhancement. Vehicles dedicated to gender equality were mainly used in agriculture, education, and banking and financial services, and grants were the dominant financial instrument.6 Vehicles dedicated to gender equality reported no challenges to their approach to gender equality. However, vehicles integrating gender equality as a mainstreamed objective noted resource constraints linked to gender equality, and lack of awareness and availability of data on the issue, as obstacles to integrating gender equality (OECD, Forthcoming 2021[15]).
As investors of blended finance, DAC members should assert their influence and ensure that gender equality is addressed, in line with their policy commitment to gender equality. When working with private sector partners, DAC members can ensure investments are managed appropriately for gender equality and development impact.
Box 4.3. Examples of blended finance for gender equality
Gender equality in Australia’s blended finance initiatives
Australia’s Department of Foreign Affairs and Trade (DFAT) integrates gender equality into its investments so that initiatives strengthen capital markets that support gender equality objectives and capitalise on the contribution women can make to economic growth, to COVID-19 recovery and to climate resilience. The Investing in Women programme has boosted private impact investment in women’s small and medium enterprises (SMEs) in Southeast Asia since 2017. From Investing in Women investments of AUD 11.1 million, in 42 women’s SMEs, the programme leveraged over five times as much in additional private capital. As DFAT’s longest-running gender-lens investing initiative, Investing in Women is recognised for its strong demonstration effect, inspiring sustained organisational change in partners to consider gender and diversity throughout their investment processes, and to scale and launch new gender-focused funds.
All other DFAT blended finance programmes, including the Pacific RISE pilot and the Emerging Markets Impact Investing Fund (EMIFF), apply a gender lens as core to all their operations, activities, partnerships and investments, regardless of sectoral focus. EMIIF’s investments will support women’s SMEs as well as businesses that supply products or services that benefit women that adopt workplace gender-equality practices or promote gender equality throughout their supply chains.
Japan ASEAN Women Empowerment Fund
The Japan ASEAN Women Empowerment Fund (JAWEF) is a blended fund that invests through financial institutions in women micro entrepreneurs across the Association of Southeast Asian Nations (ASEAN) region. Launched with support from the Japanese government, JAWEF leverages first-loss and mezzanine tranches to mobilise institutional investors. In 2016, Japan International Co-operation Agency (JICA) and the Japan Bank for International Co-operation signed an agreement to invest in the fund, along with Sumitomo Life Insurance Company and other Japanese finance institution investors. JAWEF’s mission is to encourage gender equality and the empowerment of women and girls by providing financial opportunities to women. It seeks to support women entrepreneurs in ASEAN countries. Lessons learned from the fund show that blended finance can be an effective tool for mobilising institutional capital for gender-lens investing, and that successive fundraising rounds may lead to more efficient mobilisation.
Women’s World Banking Capital Partners Fund II
Several DAC members have provided catalytic funds to Women’s World Banking Capital Partners Fund II, helping to mitigate risk for commercial investors and incentivising them to invest. This private equity limited partnership makes direct investments in women-focused financial institutions around the world.
Drawing on the lessons learned from the first fund, it employs a blended structure to bring together traditional development partner money with more commercial investors, bringing more capital to the table. The fund also provides technical assistance to investees, to help them improve internal gender diversity, better serve their customers, and increase their impact.
Development banks and finance institutions, and commercial actors
Multilateral and regional development banks and development finance institutions play a critical role in blending by deploying instruments and structuring mechanisms to mobilise the private sector.7 Multilateral development banks provide large shares of private sector investments through private sector operations. However, a wider range of diverse actors is engaging in blended finance, from foundations and philanthropic investors, to commercial actors, including institutional investors, commercial banks, private equity and venture capital funds, hedge funds, as well as corporations and SMEs (OECD, Forthcoming 2021[15]). Many DAC member ministries and agencies already collaborate with banks and development finance institutions (DFI). Bilateral DFIs are usually majority-owned by the national government and source their capital from development funds or benefit from government guarantees, enabling them to raise money on international capital markets and provide financing on competitive terms (OECD, 2021[16]).
Several examples show how DAC governments have provided impetus for a stronger focus on gender equality by their bilateral DFI, including by:
defining gender equality as a policy objective when participating in blended finance vehicles
granting loans with the explicit objective of investing in projects that promote gender equality
issuing policy directives requesting that new investments explore the role of women and impact on gender equality.
DAC members undertake similar partnerships with multilateral DFIs and development banks.
In partnering with business, commercial investments can be used to support gender equality and the empowerment of women and girls in two broad ways: through investment in companies offering services or products that significantly benefit women, such as dedicated loans or affordable maternal health care, and also through investment in companies led by women, or companies that support women employees and/or women’s leadership through internal actions and policies (FSD Africa and UN Women, 2020[17]).
Initiatives such as the “2X Challenge”, founded by the DFIs of the G7 member countries,8 and the “DFI Gender Finance Collaborative”9 has provided significant impetus for DFIs to develop shared financing principles, definitions and methodologies for providing women in developing country markets with improved access to support, leadership opportunities, finance, and products and services that enhance economic participation and access.
Using bonds as an incentive to channel private capital towards gender equality
A bond is an instrument that represents a loan made by an investor (“purchaser”) to a borrower (“issuer”). Development impact bonds (DIBs) finance development programmes with funding from private investors, who earn a return if the programme is successful. Green, social and sustainability bonds have gained traction over the past few years in developed markets, given their potential to bridge the SDG financing gap. Their use is limited in developing countries. Bonds allow issuers to diversify their sources of funding and provide an alternative to conventional financing, which can often be more expensive (OECD, 2021[18]).
DAC members can make use of bonds to help create incentives and channel private capital towards gender equality goals.
“Gender bonds” can be broadly defined as bonds that support the advancement, empowerment and equality of women, although no official definition exists, and credible reference standards are lacking (FSD Africa and UN Women, 2020[17]). So far, the number of investors in gender bonds has been limited.
Despite the modest size of the gender bond market globally, there is reason for optimism (Gouett, 2021[19]). Issuers can identify gender equality as the sole objective of a bond, or alongside other objectives in a broader social bond, or alongside green objectives in a sustainability bond. Gender bonds have been issued by financial institutions to fund ongoing loan portfolios that are intended for women entrepreneurs. Gender bonds could, however, also be issued by a public sector issuer that intends to direct all the proceeds towards a country’s national strategy or action plan for gender equality (ICMA, UN Women, IFC, 2021[20]). Education may be another sector of interest for gender bonds (Osborne and Gustafsson-Wright, 2020[21]).
Opportunities exist for DAC members to provide incentives such as guarantees for gender bonds, and also to provide incentives for a gender equality focus of bonds in other thematic areas, including green bonds.
Box 4.4. Examples of gender bonds
Examples of gender bonds investments include JICA’s gender bond issued in 2021, which raised USD 181 million to promote the empowerment of women and girls and education. The bond proceeds will be allocated to JICA’s Finance and Investment work for projects which meet the criteria of the DAC gender equality policy marker and include both projects where the main objective is gender equality and where gender equality is an integrated objective.
The Asian Development Bank (ADB) launched its first gender bond in 2017 and has issued several gender bonds since then. The gender bonds have been effective in increasing awareness of ADB's activities and in broadening ADB's investor base, having attracted demand from investors who may not necessarily participate in ADB's regular bond offerings. The proceeds from the gender bonds are used to finance a pool of eligible projects that promote gender equality and women’s empowerment. Projects include those funded either in whole or in part from ADB’s ordinary capital resources that target gender disparities and promoting empowerment of women and girls. Projects typically address – either as part of the overall outcome of the or by incorporating them into specific project components – women’s economic empowerment; gender equality in human development; reducing poverty among women; participation in decision making and leadership; and/or women’s resilience to risks and shocks, including climate change and disaster impacts.
Another example is the private sector-issued Women Entrepreneurs Bonds by the Bank of Ayudhya in Thailand, with the aim of boosting lending to SMEs led by women. International Finance Corporation (IFC) and Deutsche Investitions und Entwicklungsgesellschaft (DEG) have signed up, and the pioneering investment is supported by the Women Entrepreneurs Opportunity Facility, a joint initiative of IFC and Goldman Sachs 10,000 Women.
Box 4.5. A multilateral approach to partnering with the private sector: The Women Entrepreneurs Finance Initiative (We-Fi)
The Women Entrepreneurs Finance Initiative (We-Fi) is a multilateral partnership that aims to unlock financing for women-led and women owned businesses in developing countries. Since its inception in 2018, We-Fi has allocated USD 300 million to address critical constraints for women entrepreneurs and is now operational in 52 developing countries. Housed at the World Bank, We-Fi’s global scope is supported by a strong network of six Implementing Partners (multilateral development banks) and more than 140 executing partners from the public and private sector. Almost two-thirds of We-Fi’s funds are allocated to low-income (International Development Association (IDA) eligible) and fragile countries. Its holistic approach is policy work and capacity-building through the public sector, paired with private sector development and blended finance innovations. A recent midterm review concluded that We-Fi fills a critical gap in the aid architecture as the only multilateral fund at scale addressing finance, markets, policy and skills gaps. The initiative is particularly strong in leveraging funds and has already leveraged approximately USD 1 billion.
Source: We-Fi (2020[22]), WE Persist, Rebuild, Empower Finance 2020 Annual report https://we-fi.org/wp-content/uploads/2021/03/WeFi-Annual-Report-2020.pdf.
Incentives and guidance for investors and financing actors
DAC members can provide guidance and technical assistance for investors and financing actors to integrate gender equality throughout development and climate investments, and at the very least, “do no harm” to gender equality and the empowerment of women and girls. This can imply undertaking research and providing support for commercial actors and private investors who may not have access to gender equality expertise.
This work can be facilitated by the Women’s Empowerment Principles (WEPs), which offer businesses guidance on how to promote gender equality and the empowerment of women and girls in the workplace, marketplace and community. Established by UN Global Compact and UN Women, the WEPs are informed by international labour and human rights standards and grounded in the recognition that businesses have a stake in, and a responsibility for, gender equality and the empowerment of women and girls. The principles focus on: High-Level Corporate Leadership; Treat All Women and Men Fairly at Work without Discrimination; Employee Health, Well-Being and Safety; Education and Training for Career Advancement; Enterprise Development, Supply Chain and Marketing Practices; Community Initiatives and Advocacy; and Measurement and Reporting (UN Global Compact and UN Women, 2021[23]).
Guidance and support in financing for gender equality also involves encouraging transparency and accountability through financial and results reporting. DAC members can engage with investors on the types of gender equality objectives the investments are aiming to achieve, and they can identify opportunities for supporting transformative change to achieve gender equality.
DAC members can provide specific incentives for investors and financing actors to integrate gender equality throughout development and climate investments, such as offering loans with the explicit objective of investing in projects that promote gender equality.
The 2X Collaborative is an industry body that evolved out of the 2X Challenge and DFI Gender Finance Collaborative. Bringing together the entire spectrum of investors to promote gender-lens investing, it may prove helpful for capacity building amongst investors. The group facilitates peer learning across communities, to train and expand gender-lens investing practices to a wider group of commercial investors, including DFIs, Multilateral Development Banks (MDBs), pension funds, asset managers, fund managers, financial institutions, public development banks and corporate institutions.
Towards transparency in financial and results reporting
It is possible to monitor the level of development finance for gender equality by applying the DAC gender equality policy marker to financial flows beyond ODA.
DAC members should aim to screen all their “other official flows” (OOF) against the marker and report these data to the OECD where feasible.10
It is positive that a number of private foundations and some development banks and DFIs already use the marker. Members of the 2X Challenge – a group of DFIs founded by the DFIs members of the G7 – are aligning their gender-lens investing criteria11 to those of the DAC gender marker. While reporting on the extent to which these “other” finance flows, beyond ODA, address gender equality remains a voluntary exercise, reporting will help increase the ability to both find existing gaps in financing, and create a more holistic picture of the financing landscape with regard to gender equality (OECD, 2021[24]).
Recent evidence indicates that there is little standardisation of reporting among the major DFIs in terms of project rationale, funding instrument or environmental, social and governance safeguards category (Publish What You Fund, 2021[25]). Likewise, evidence highlights that “transparency on impact performance, including targets and results” remains one of the most significant challenges in the impact investing field (GIIN, 2020[26]). There can be some difficulty linked to collecting data and measuring gender equality results in the context of finance “beyond ODA”, due to the nature and structure of these funds. However, higher levels of transparency are fundamental to ensuring that development actors and their private sector partners provide the levels of accountability necessary for development partners, and improving overall development and gender equality results through sharing and learning from previous investments.
Box 4.6. Partnering with business: The U.K.’s Work and Opportunities for Women (WOW) Programme
Work and Opportunities for Women (WOW) is a five-year programme originally funded by the UK’s former Department for International Development (DfID) that aims to improve access to economic opportunities for women “through business interventions in supply chains and economic development programmes”. By partnering with and supporting businesses, organisations and programmes that are ready and willing to act on women’s economic empowerment, facilitate change across supply chains, and drive international action on this issue, WOW works to eliminate systemic barriers that hinder progress.
The programme provides various entry points for companies in their efforts to address women’s participation in supply chains. WOW can provide options to expand and deepen existing programmes; develop proof of concept to streamline the replication of successful interventions; ensure the sustainability of any efforts by using existing efforts to inform the creation of, or changes to, legislation and policy; and create opportunities for innovation and piloting new interventions.
In some partnerships with WOW, companies provide access to data on women working within their global value chains – information that is crucial for gaining a comprehensive understanding of women’s experiences and challenges. WOW is able to analyse and use this data to identify challenges, barriers and opportunities for intervention and subsequently employ this information for further engagement. Additionally, while partnerships with some companies require a due diligence process, WOW also recognises the importance of working with companies that require more support for addressing women’s economic empowerment. A pillar of the WOW programme is the help desk. Through this function, UK has supported technical assistance as well as expert analysis, and direction can be provided to departments and actors seeking guidance at any stage of their efforts to further women’s economic empowerment. While companies were selected in a due diligence process, but the intention was also to work with companies that need improvement, and to provide companies guidance and support.
Source: DfID (2020[27]), Work and Opportunities for Women, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/869561/Programme-Overview-March2020.pdf.
Making development programmes less risky for investors through guarantees
Guarantees are financial instruments similar to an insurance policy, which provide financial compensation for the financier if the borrower is not able to pay back. This makes financing of the development projects less risky for investors (Sida, 2020[28]). DAC members might for example propose higher guarantee coverage – taking on more of the risk – when investing in companies that support women or offer services and products that benefit women.
According to OECD data on private finance raised for development, guarantees have raised the largest amount of private finance in recent years. They are rarely used, however, in blended finance vehicles dedicated to or integrating gender equality, indicating potential for scaling up (OECD, Forthcoming 2021[15]).
Box 4.7. Sweden’s use of guarantees to support businesses led by women
Sida has numerous on-going guarantee projects in its portfolio. In 2020, the guarantee-frame was approximately USD 2 billion, mobilising a total of approximately USD 2.5 billion; 70% of the guarantees have gender equality as a significant or principal objective.
Guarantee with TBC Bank in Georgia: Sweden takes 60% of the risk on loans to start-ups and women-led SMEs specifically. Of 911 loan takers in Georgia, 199 are women-led businesses, and 22% of the loan volume has been taken up by women-owned SMEs. The Sida guarantee is approximately USD 25 million, and total mobilised capital is USD 50 million. Special effort has been made to ensure that loans are provided in the local currency, further reducing risk for the loan takers.
Enat bank in Ethiopia: Sida and the US Agency for International Development (USAID) support the Enat bank in by providing guarantees to support lending to women owned SMEs. Sida and USAID each provide a 25% guarantee cover. The 50% remaining risk lies with Enat Bank. All loan-takers are female-owned businesses (the majority with 100% female ownership, and no less than 51%).
Box 4.8. Facilitating access to credit for women refugees: Switzerland
The Swiss Capacity Building Facility (SCBF) is a platform with about 25 partners, mainly Swiss financial institutions and impact investors. Its aim is to assist financial institutions in developing countries by developing and disseminating innovative finance products for low-income people, smallholder farmers and small-scale entrepreneurs, and in particular, women. In 2018, the Facility launched a partnership with Jordan's Micro fund for Women (MFW) to set up a loan programme specifically for Syrian women refugees. The Micro fund benchmarked the needs of Syrian refugees and other foreign-born individuals through a feasibility study, and adapted its service offering accordingly.
This partnership allowed some 4,000 Syrian women refugees to access credit, in many cases enabling them to achieve economic independence. Based on the success of this pilot collaboration, the Micro fund expanded its lending and non-financial services to this client segment and generated further interest in refugee lending programmes among Jordanian and foreign microfinance institutions.
Note: For more information please see www.scbf.ch.
Support for local actors in partner countries in mobilising finance
DAC members can play an instrumental role in supporting partner country businesses and governments in mobilising finance for gender equality and the empowerment of women and girls and in becoming “investment ready”.
Supporting the private sector in partner countries in mobilising finance
The private sector in developing countries is a source of employment and growth, with potential for positive effects on the situation for women. However, it can also risk undermining the potential for greater gender equality and the empowerment of women and girls. Given the high level of uncertainty and risk associated with developing markets, it is often challenging for entrepreneurs in general, and women entrepreneurs in particular, to access credit or investments (Sida, 2021[29]).
DAC members can play a role in supporting capacity building and mentoring of the private sector in partner countries:
for businesses overall to help them meet some or several of the most common gender-lens investing criteria/standards, including but not limited to the share of women in the workforce and the quality of women’s jobs, the share of women in senior management, and human resource and harassment policies
for women entrepreneurs and women-led businesses and projects in developing countries to strengthen their financial viability and practices, as well as their lending capacity to help them become “investment ready”.12
Supporting partner country governments and markets in mobilising finance
DAC members can also play a role in supporting partner country governments and markets in mobilising finance, including by:
improving investment environments, including by helping to build capacity of local financial institutions and develop capital markets, to better benefit women. If partner governments are to issue gender bonds and attract private finance, for example, an adequate regulatory framework is needed. Partner governments overall have yet to participate in the gender bond market
working with ministries of finance and economy to increase governments’ capacity in gender-responsive public financial management and budgeting. This includes expanded use of ex ante gender-impact assessments, gender budget tagging, gender budget statements and gender budget audits.
Box 4.9. Good examples of supporting the private sector in partner countries: Sweden
Market sector development in Mozambique
The WIN (Women IN Business) programme in Mozambique was initiated and financed by Sida in 2019 and implemented by TechnoServe. WIN’s objective is to economically empower women by supporting partners in the private and public sectors. These partnerships are designed to increase women’s access to finance, equipment, business information and tools and wholesale/distribution of products, as well as to shape the rules and norms that govern women’s entrepreneurship.
One of the 32 companies working with WIN is Energy Access Mozambique (ENGIE), an off-grid energy and financial services company focused on solar home systems (SHS). The company started operations in Mozambique in 2019 and aims to reach 200 000 households by 2023. WIN assessed its sales operations and identified several opportunities, including improving the recruitment guidelines and making job descriptions more gender sensitive. In this process, the company identified women as customers and as sales agents of particular strategic interest. By focusing on these areas, WIN increased the retention rate of women sales agents from 40% to 75%, and an increase of 80% in earnings of the women sales agents in the first year.1
WIN is also supporting Vodacom M-Pesa to reach more women customers and agents through various initiatives. M-Pesa is used by more than 5 million people2 in Mozambique to store money digitally and make multiple transactions – from payments for basic needs and transfers to other mobile numbers or banks via mobile phone. WIN conducted a review of M-Pesa’s Xitique product, which allows people to regularly save money. Through this partnership, M-Pesa made updates to product functionality and marketing strategy by responding to women’s needs. This has contributed towards a 42% increase in the number of women regular users3 in the past year, compared to a 26% increase in regular male users in the same period.
Support for private sector development in Tanzania
In 2017, with support from Sida, private sector development (PSD) actors in Tanzania engaged in a transformative journey. By 2021, the partners had accumulated considerable knowledge and hands-on solutions for PSD with a gender perspective. The actors are the Agricultural Markets Development Trust (AMDT), the Private Agricultural Sector Support (PASS), the Hanns R-Neumann Stiftung (HRNS) with the Coffee Farmers Alliance of Tanzania (CFAT), the Commission on Science and Technology/Small Industries Development Organisation (COSTECH/SIDO) and Tanzania Horticultural Association (TAHA).
The baseline from 2017 showed such challenges as: lack of adequate budgeting and knowledge; sex-disaggregated data; tools; human resource allocation; policies and strategies. Sida provided organisational capacity building tailored to each partner’s needs, which focused on ownership, engagement and accountability in management and close collaboration, monitoring and learning with Sida. A central feature in the support was peer learning amongst the actors.
The organisational development had already had an impact at the project level in 2019, which continued throughout the COVID pandemic and were reported in 2021. TAHA measured an increase in the number of women owning greenhouses, and that they had higher yields in horticulture compared to men. The results subsequently led to more men wanting to work with and join the women’s groups. HRNS/CFAT saw an increase in the transparency of the household economy between women and men, which led to improved decision-making processes. Both women and men in these households reported that the joint household planning led to tangible improvements in their livelihood. HRNS/CFAT also saw an increased number of women in leadership in farmer organisations and noted that these had done well. PASS shared that the increased gender awareness had practical implications for the development of an innovative financial product to apply for loans from home from a non-smartphone device. The product targets women, who tend to have more limited mobility and less access to smartphones. The loans will also be linked to a Swedish loan guarantee to women and youth.
1. The growth in income was not linear, due to promotions held in different quarters of the year. Throughout the first year of partnership, women agents consistently earned above the amount at baseline.
2. Considering active customers on a 30-day basis.
3. Regular users defined as using the product more than once.
Checklist on financing for gender equality
DAC members can ask the following questions:
On to bilateral ODA for gender equality and the empowerment of women and girls:
Is funding allocated both to programmes that mainstream gender equality and programmes that are dedicated to gender equality?
Do ODA allocations align with the identified policy priority of gender equality and the empowerment of women and girls?
Do staff have awareness of, understand, and correctly apply the DAC gender equality policy marker scores, to ensure accountability and transparency for ODA for gender equality? Can further awareness raising and trainings be undertaken around this tool internally?
Is there a quality assurance process set up to ensure the robust and correct application of gender marker scores?
Are the marker criteria embedded in programming design and approval requirements, to serve as guidance and incentive for incorporating and advancing gender equality?
Are programmes correctly reported against the DAC statistical purpose codes relating to gender equality: aid to “feminist, women-led and women’s rights organisations and movements, and institutions, and/or aid to “ending violence against women and girls”?
Has all possible descriptive information about programmes been provided in reporting aid statistics to the OECD?
On to development finance beyond ODA:
Is the advancement of gender equality considered as an objective for different types of financial structures and instruments, including climate finance, blended finance, bonds and guarantees?
Are synergies and opportunities for collaboration identified to strengthen dialogue and partnership with private sector actors, including private philanthropy, on gender equality and the empowerment of women and girls? Are different actors’ comparative strengths identified and drawn upon?
Are efforts made to build the case, set requirements, provide capacity development on gender equality and monitor results when partnering with private actors in blended finance vehicles, guarantees and other financing instruments?
Are there discussions with private sector actors around opportunities for addressing and investing in transformative change for gender equality?
References
[14] 2X Collaborative (2021), The Gender-Smart Climate Finance Guide, https://www.2xcollaborative.org/what-is-gender-smart-finance-investing.
[27] DfID (2020), Work and Opportunities for Women, DfID, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/869561/Programme-Overview-March2020.pdf (accessed on 26 April 2022).
[4] European Commission (2020), Evaluation of the EU’s external action support to gender equality and women’s and girls’ empowerment (2010-2018) Final Report, https://ec.europa.eu/international-partnerships/system/files/gender-evaluation-2020-final-report-volume-1_en.pdf.
[17] FSD Africa and UN Women (2020), Viability of Gender Bonds in SSA: A Landscape Analysis and Feasibility Assessment, https://www.fsdafrica.org/wp-content/uploads/2020/09/20-09-22-Gender-Bonds-Report_AK.pdf (accessed on 18 May 2021).
[26] GIIN (2020), “2020 Annual Impact Investor Survey”, Global Impact Investing Network, https://thegiin.org/research/publication/impinv-survey-2020.
[12] GIIN (n.d.), Gender Lens Investing Overview, Global Impact Investing Network, https://thegiin.org/gender-lens-investing-initiative#:~:text=Gender%20Lens%20Investing%20Overview,and%20better%20inform%20investment%20decisions. (accessed on 27 May 2021).
[19] Gouett, M. (2021), Furthering Gender Equality Through Gender Bonds, Malaysian Finance Sustainable Initiative and Foreign and Commonwealth Development Office, https://www.iisd.org/system/files/2021-03/equality-gender-bonds.pdf (accessed on 27 May 2021).
[20] ICMA, UN Women, IFC (2021), Bonds to Bridge the Gender Gap: A Practitioner’s Guide to Using Sustainable Debt for Gender Equality, https://www.ifc.org/wps/wcm/connect/05aca7eb-6e85-4296-8b27-f8c75c7107d4/Bonds+to+Bridge+the+Gender+Gap.pdf?MOD=AJPERES&CVID=nQl1OB1.
[2] OECD (2022), Creditor Reporting System (CRS), OECD International Development Statistics (database), https://stats.oecd.org/Index.aspx?DataSetCode=crs1 (accessed on 28 April 2022).
[3] OECD (2021), Development finance for gender equality and women’s empowerment, https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/development-finance-for-gender-equality-and-women-s-empowerment.htm.
[24] OECD (2021), Development finance for gender equality and women’s empowerment: A 2021 snapshot, OECD Development Assistance Committee, http://www.oecd.org/development/gender-development/Development-finance-for-gender-equality-2021.pdf.
[16] OECD (2021), Development finance institutions and private sector development, https://www.oecd.org/development/development-finance-institutions-private-sector-development.htm.
[18] OECD (2021), Scaling up green, social, sustainability and sustainability-linked bonds issuances in developing countries, https://www.oecd.org/dac/financing-sustainable-development/blended-finance-principles/documents/scaling-up-green-social-sustainability-sustainability-linked-bond-issuances-developing-countries.pdf.
[1] OECD (2020), DAC Converged Statistical Reporting Directives, https://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/.
[9] OECD (2020), Development Assistance Committee Members and Civil Society, The Development Dimension, OECD Publishing, Paris, https://doi.org/10.1787/51eb6df1-en.
[8] OECD (2020), Multilateral Development Finance 2020, https://doi.org/10.1787/e61fdf00-en.
[13] OECD (2020), “Putting finance to work for gender equality and women’s empowerment: The way forward”, OECD Development Policy Papers, No. 25, OECD Publishing, Paris, https://doi.org/10.1787/f0fa4d91-en.
[30] OECD (2020), Twentieth Anniversary of UN Security Council Resolution 1325: Financing gender equality and women’s empowerment in fragile contexts, OECD Development Assistance Committee, https://www.oecd.org/development/gender-development/OECD-Gendernet-Financing-UNSCR.pdf.
[10] OECD (2016), 2015 OECD Recommendation of the Council on Gender Equality in Public Life, OECD Publishing, Paris, https://doi.org/10.1787/9789264252820-en.
[5] OECD (2016), Handbook on the OECD-DAC Gender Equality Policy Marker, OECD Publishing, https://www.oecd.org/dac/gender-development/Handbook-OECD-DAC-Gender-Equality-Policy-Marker.pdf.
[15] OECD (Forthcoming 2021), Blended Finance for Gender Equality and Women’s Empowerment.
[7] OECD (n.d.), DAC and CRS code lists, https://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/dacandcrscodelists.htm.
[6] OECD DAC Working Party on Development Finance Statistics (2020), Assessing the policy objectives of development co-operation activities: Review of the reporting status, use and relevance of Rio and policy markers, OECD Development Assistance Committee, https://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD/DAC/STAT(2020)27&docLanguage=En.
[21] Osborne, S. and E. Gustafsson-Wright (2020), Brookings, https://www.brookings.edu/blog/education-plus-development/2020/12/17/the-worlds-largest-education-impact-bond-delivers-on-results-midway-through-the-program/.
[25] Publish What You Fund (2021), ESG and Accountability to Communities, Publish What You Fund, The Global Campaign for Aid and Development Transparency, https://www.publishwhatyoufund.org/projects/dfi-transparency-initiative/3-esg-accountability-to-communities/.
[29] Sida (2021), Challenge Funds, Swedish International Development Cooperation Agency, https://www.sida.se/en/for-partners/private-sector/challenge-funds (accessed on 27 May 2021).
[28] Sida (2020), Sida’s guarantee instrument, Swedish International Development Cooperation Agency, https://www.sida.se/en/for-partners/private-sector/sidas-guarantee-instrument (accessed on 20 May 2021).
[23] UN Global Compact and UN Women (2021), Women’s Empowerment Principles - A Snapshot of 350 Companies in G7 Countries, http://www.weps.org.
[11] VERIS Wealth Partners (2018), Gender Lens Investing: Bending the Act of Finance for Women and Girls, https://www.veriswp.com/research/gli-bending-arc-of-finance-women (accessed on 20 May 2021).
[22] We-Fi (2020), We persist rebuild empower finance 2020 Annual report, http://www.we-fi.org (accessed on 21 April 2022).
Annex 4.A. Additional resources on financing
Bilateral aid for gender equality
For all data on ODA and bilateral allocable aid for gender equality, see the OECD DAC Creditor Reporting System database: https://stats.oecd.org/Index.aspx?DataSetCode=crs1.
Handbook on the OECD-DAC Gender Equality Policy Marker, OECD 2016, https://www.oecd.org/dac/gender-development/Handbook-OECD-DAC-Gender equality -Policy-Marker.pdf.
While there is no dedicated “women’s economic empowerment” sector in the OECD CRS system, the OECD has traditionally monitored aid integrating gender equality objectives in the economic and productive sectors as a proxy measure for aid to women’s economic empowerment, picking up on a range of areas from agriculture and transport to business and banking. Similarly, aid for “women, peace and security” is monitored through the shares of aid integrating gender equality in fragile contexts, and/or the share of aid integrating gender equality in the sector of conflict, peace and security (OECD, 2020[30]) (see: https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/development-finance-for-gender-equality-and-women-s-empowerment.htm).
The code “Women’s rights organisations and feminist movements” (CRS purpose code 15170) tracks “Support for feminist, women-led and women’s rights organisations and movements, and institutions (governmental and non-governmental) at all levels to enhance their effectiveness, influence and sustainability (activities and core funding). These organisations exist to bring about transformative change for gender equality and/or the rights of women and girls in partner countries. Their activities include agenda-setting, advocacy, policy dialogue, capacity development, awareness raising and prevention, service provision, conflict prevention and peacebuilding, research, organising, and alliance and network building.” As with all financing data reported to the CRS, it is possible to cross-reference the data reported under this code with CRS “channel codes”, in order to identify how much aid is provided by DAC members directly to local grassroots organisations and feminist movements in partner countries, without any intermediaries. This definition of the code was applied by DAC members starting from 2020 on 2019 flows.
The code “Ending violence against women and girls” (purpose code 15180) tracks “Support to programmes designed to prevent and eliminate all forms of violence against women and girls/gender-based violence. This encompasses a broad range of forms of physical, sexual and psychological violence, including but not limited to: intimate partner violence (domestic violence); sexual violence; female genital mutilation/cutting (FGM/C); child, early and forced marriage; acid throwing; honour killings; and trafficking of women and girls. Prevention activities may include efforts to empower women and girls; change attitudes, norms and behaviour; adopt and enact legal reforms; and strengthen implementation of laws and policies on ending gender-based violence, including through strengthening institutional capacity. Interventions to respond to violence against women and girls/gender-based violence may include expanding access to services including legal assistance, psychosocial counselling and health care; training personnel to respond more effectively to the needs of survivors; and ensuring investigation, prosecution and punishment of perpetrators of violence”. This code was applied by DAC members starting from 2017 on 2016 flows, allowing for accountability to deliver on and achieve SDG5 targets 5.2, “eliminating all forms of violence against women and girls”, and 5.3, including “eliminating all harmful practices such as child, early and forced marriage and female genital mutilation”.
DAC members are increasingly aiming to address inequalities that intersect with gender (see Section 1.3) and there is some scope to monitor aid aimed to reduce these inequalities. The CRS includes a DAC policy marker focused on the inclusion and empowerment of persons with disabilities. This marker has the same scoring system as the gender equality policy marker, distinguishing between programmes/projects that have disability inclusion as the dedicated or “principal” objective (score 2), and programmes/projects with an integrated or “significant” objective (score 1). It is possible to cross the disability inclusion marker with the gender equality marker in order to identify aid that addresses the intersecting inequalities of gender and disability.
The CRS sector code focused on “Human rights” (CRS purpose code 15160) tracks aid for “Human rights programming targeting specific groups, e.g. children, persons with disabilities, migrants, ethnic, religious, linguistic and sexual minorities, indigenous people and those suffering from caste discrimination”. Applying the gender marker to programmes/projects reported under this code makes it possible to identify aid that addresses the intersecting inequalities of gender and disadvantaged groups, such as ethnic and sexual minorities (OECD, n.d.[7]).
In addition, the purpose code “Emergency Response – Basic Health Care Services in Emergencies” (CRS purpose code 72011) includes the provision of basic health services, mental health, and sexual and reproductive health.
Making all development finance work for gender equality
For more information about development finance instruments, see: https://www.oecd.org/dac/financing-sustainable-development.
A map of the Gender Finance Ecosystem, sponsored by the Tara Health Foundation and led by Catalyst at Large, can be found here: https://nexial.co/maps/gf.
Gender Lens Investing: Bending the Arc of Finance for Women & Girls: https://www.veriswp.com/thoughtleadership/gli-bending-arc-of-finance-women/.
The Women’s Empowerment Principles: https://weps-gapanalysis.org.
Gender-lens investing criteria as defined by the DFIs in the 2X Challenge: https://www.2xchallenge.org/criteria.
Resources on funding the concessionary part of a blended capital vehicle:
Women’s World Banking Capital Partners Fund: https://www.womensworldbanking.org/gender-lens-investing/.
CARE SheTrades Impact Fund: https://www.care.org/news-and-stories/ideas/beyond-gender-lens-cares-new-impact-fund-opts-for-gender-justice/.
Japan Asean Women Empowerment Fund (JAWEF): https://assets.ctfassets.net/4cgqlwde6qy0/486sbWFRVDlqKpzxXutxke/ee0112a89c4589b579f370c0352c41ac/JAWEF_Case_Study_-_Final_final__2_.pdf.
About gender bonds in sub-Saharan Africa, see: https://www.fsdafrica.org/publication/viability-of-gender-bonds-in-sub-saharan-africa and watch the webinar here: https://www.youtube.com/watch?v=DqrXfvTI8Iw.
Notes
← 1. See the DAC and CRS code list: https://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/dacandcrscodelists.htm.
← 2. Reporting on the DAC gender marker is possible, but voluntary, for non-DAC development finance providers and for non-ODA financial flows. The DAC marker is used beyond the DAC. For example, the International Aid Transparency Initiative (IATI) uses the methodology of the DAC marker in its data collection.
← 3. Twelve of the 21 survey respondents noted that a gender expert is involved in verifying or providing quality control of the DAC gender equality policy marker scoring process, either at the design or review phase. This is more than in the 2013 GENDERNET study, when gender equality experts were involved in applying or reviewing scores in only one-third of responding DAC members.
← 4. DAC members that had financial targets for gender equality at the time of the GENDERNET survey were: Austria, with 42.5% of funds channeled by the Austrian development co-operation in Africa to score 2 (principal) against the marker; Canada, with 80% for score (significant) and 15% for score 2; the European Union (EU), with 85% of new initiatives to score 1 or 2 (including both ODA and blending operations and guarantees by – 2025); France, with 75% of programmable aid to score 1 or 2, and 20% to score 2 by 2025, with the Agence Française de Développement (AFD), France’s development agency, aiming for EUR 600 million to score 2 in the 2020-2022 period; Italy, with 10% of score 2 and the remaining ODA allocated by the Ministry of Foreign Affairs and International Co-operation Agency for Development Co-operation (MFA/AICS) as score 1; Japan, with the Japan International Cooperation Agency (JICA) aiming for 40% of aid to score 1 or 2; Korea (the Korea International Co-operation Agency) intends to double the number of projects that score 1 or 2; Slovenia, with 60% to score 1 or 2 by 2030; Switzerland, with a total of 85% of which at least 8% score 2.
← 5. Thirteen DAC members reported that they used financing tools for gender equality and women’s empowerment beyond ODA, such as partnerships with private companies and multilateral development banks and blended finance instruments.
← 6. DAC members providing capital to blended finance vehicles devoted to gender equality that responded to the 2020 OECD blended finance survey include the Netherlands, the United Kingdom and Sweden.
← 7. Seventeen DAC members identified multilateral organisations as the main or one of the main modalities for funding gender equality programming. This included funding for dedicated gender equality projects, as well as core funding accompanied by regular policy dialogue to influence the multilateral organisation to address gender inequalities in line with their commitments.
← 8. See more https://www.2xchallenge.org.
← 9. See more https://www.cdcgroup.com/en/news-insight/news/development-finance-institution-gender-finance-collaborative/ .
← 10. OOF are defined as official sector transactions that do not meet ODA criteria. OOF include: grants to developing countries for representational or essentially commercial purposes; official bilateral transactions intended to promote development, but not reaching the minimum grant element for a given recipient; and, official bilateral transactions, whatever their grant element, that are primarily export-facilitating in purpose. This category includes, by definition: export credits extended directly to an aid partner by an official agency or institution (official direct export credits); the net acquisition by governments and central monetary institutions of securities issued by multilateral development banks at market terms; subsidies (grants) to the private sector to soften its credits to developing countries; and funds in support of private investment.
← 11. The 2X Challenge’s gender-lens investing criteria focus on businesses founded or owned by women, women in leadership, women in the workforce, products or services benefitting women, and includes applying these criteria when investing through intermediaries.
← 12. The International Trade Centre’s “SheTrades” initiative is an example of a set-up that offers a network and platform supporting the participation of women-owned businesses in international trade (https://www.shetrades.com/en).