Women-led micro and small enterprises (MSEs) are already delivering climate solutions across critical sectors, from clean energy and food systems to waste, water, and digital services. Yet despite more than USD 1 trillion flowing into climate finance each year, only a small fraction reaches these businesses, and less than 5% supports adaptation (Climate Policy Initiative 2023). This gap is not due to a lack of viable opportunities, but to a mismatch between how capital is structured, where it flows, and how these businesses operate.
Developed by Futerra, Project Dandelion and CARE, with support from Strive Women, a Mastercard Strive initiative supported by the Mastercard Center for Inclusive Growth in partnership with CARE, The $1 Trillion Blind Spot: Redirecting Climate Finance to Women-Led Solutions examines 10 economic systems where WMSEs are active in climate solutions and where better-designed finance could help them grow. It highlights practical opportunities for investors, financial institutions, companies, policymakers, and multilateral actors to align capital with businesses already strengthening resilience, reducing emissions, and meeting community needs.
Findings
- Women are delivering solutions and can grow impact with the right support. Women-led enterprises are active across sectors that matter for climate mitigation and resilience, distributing solar products, running agro-processing businesses, managing waste streams, and providing essential local services.
- Finance is not reaching women-led MSEs because most climate finance is structured for large projects, large tickets, and familiar risk profiles. This disadvantages smaller, locally embedded businesses. For many women-led enterprises, the issue is a mismatch between how finance is designed and how their businesses operate.
- The financing gap has climate consequences. These enterprises operate close to where emissions can be reduced and where communities are adapting in real time. These enterprises are also trusted to deliver solutions in their communities. When they are underfunded, opportunities to scale practical, place-based climate solutions are missed.
Women-led solutions at a glance
The blueprint highlights 10 broad economic systems and sectors, organized by system group, where this dynamic is especially visible. These groups represent distinct but interconnected roles in the climate economy. Progress depends on all three working together.
- Essential systems deliver the services that underpin resilience and economic participation
- Energy access and services
- Mobility and local infrastructure
- Water and sanitation systems
- Skills, care, and social infrastructure
- Circular and regenerative systems reshape how resources are used, reducing emissions and restoring value.
- Textiles and apparel
- Waste and circular services
- Food systems
- Enabling systems provide the conditions that allow all solutions to scale
- Nature-based solutions
- Information and digital services
- Financial services
Calls to action for investors
Finance is not reaching the women-led enterprises driving climate solutions. This is not primarily a capital shortage, but a failure of design and delivery. The financing exists, but it is not structured around the realities of women-led businesses.
- Investors and financial institutions must redirect climate finance toward women-led enterprises, channel funding through local intermediaries, and design financial products and terms that fit how these businesses operate, including appropriately sized, flexible, and blended approaches.
- Corporates must use procurement, offtake, and supply chain finance to create demand, strengthen revenue visibility, and integrate women-led enterprises into value chains.
- Policymakers and multilateral actors must ensure climate finance reaches women-led and local enterprises, strengthen local financial systems, and use public tools such as guarantees and incentives to shift investment toward underfunded sectors.
