4.1.1 Establishing gender mainstreaming in external-facing policies is a critical departure point.

Effective gender mainstreaming is predicated on institutions evolving their policy and procedural frameworks in line with good practices. Before pursuing climate finance mobilisation, all but one of the entities studied had been approaching gender solely from an inward-facing perspective. For example, all institutions had gender-related provisions as part of their internal employment equity policies but did not have policy provisions related to the inclusion of gender in external investments or projects that they developed. The GCF requires that projects are developed in a gender-sensitive (at minimum) or gender-responsive manner [16]. All interviewees agreed that pursuing GCF accreditation was the primary driver for formalising revisions to their policy and procedural frameworks to fully activate an outward-facing gender focus.

As an exception to this observed trend, CRDB had already begun to develop outward-facing products and services with a gender lens before pursuing climate finance; as part of an initiative driven by the World Asset Finance Initiative. Having already established a track record of applying an external gender-responsive lens to project development was found to be of significant benefit in supporting the bank’s application for GCF accreditation (CRDB, personal communication, 2023). This was seen as a factor that enabled the accreditation process to proceed expediently, including their ability to develop and readily adopt a gender policy in compliance with the requirements for GCF accreditation. CRDB (personal communication, 2023) attributes the early exploration of gender mainstreaming linked to a practical project example, i.e. the gender-focused products and services developed under the World Asset Finance Initiative project, with acculturating the organisation to external gender practices. This practical experience was seen to be of great benefit as opposed to trying to usher in new policies and procedures in the abstract, which has been difficult in the experience of several other entities interviewed.

4.1.2 Shifting from risk-based to opportunities-based approaches is a foundational precept.

The experiences of study institutions demonstrate that gender consideration in external-related policy tends to first find its way into risk-management practices as part of the environmental and social risk identification and management processes adopted by financial institutions i.e. a harm minimisation or risk-based approaches pioneered by the World Bank and the IFC. Whilst ensuring that institutions undertake investment practices that do not result in harmful social outcomes is part of the GCF’s safeguarding requirements, the GCF promotes a more progressive approach to gender mainstreaming. DAEs are required not only to undertake a gender assessment to surface the gender risks of the project and design project interventions such that they do not worsen gender inequality but also, gender assessments should surface opportunities for the project to include features within its design that can be said to be gender-responsive or gender-transformative [18]. In other words, climate projects funded by the GCF should seek to maximise the potential opportunities within the project to achieve outcomes that positively impact gender equity. Consequently, whilst all institutions have well-established environmental and social safeguarding policies and practices to manage investment risk, they require entirely new frameworks to guide and manage opportunities-based approaches. Whilst risk-based approaches within institutional policy may be sufficient for meeting GCF accreditation requirements, they would likely fail to guide the development of funding proposals that satisfy GCF project expectations for approval. It is, therefore, more strategic for organisations to pursue gender mainstreaming practice holistically, including integrating opportunities-based approaches.

4.1.3 Shifting from project-taker to project-maker is a significant departure from business as usual.

The critical shifts from internal to external facing gender policies and from a risk-based to an opportunities-based approach are linked to a more profound and foundational shift in the institution’s operations as they pursue the mobilisation of climate finance. This foundational change is what the DBSA refer to, in their experience, as the strategic shift from project-taker to project-maker (DBSA,personal communication, 2023). Where financial institutions newly exploring their role as climate finance intermediaries have historically (outside of climate finance) essentially played the role of project financiers—taking on bankable investments brought to them for consideration (i.e. as project-takers)—their role primarily having to do with undertaking due diligence and an assessment of financial viability. If the financial returns are viable, they provide investment capital. Their role starts and ends there without involvement in the design and execution of the projects. However, mobilising climate finance requires that they perform additional functions. As a GCF DAE, institutions are required to identify, source, develop, implement, manage risks, and monitor & report on climate projects (i.e. as project-makers). This is a much broader set of activities, requiring additional technical skill sets with which institutions are typically not equipped. The changes institutions are thus required to implement to shift from project-taker to project-maker need to happen concurrently with those changes they need to make to promote gender mainstreaming. This recommendation is echoed by [17] as well as [19] in advocating that gender considerations be integrated within overarching project design (and, by extension, preparation), particularly to overcome the tendency for projects to silo gender considerations, including them post hoc or to relegate gender specialists/expertise as supplementary and temporary. Similarly, both highlight the likelihood that solid gender mainstreaming is predicated on a foundation of gender expertise and formalised processes for gender analysis and integration.

The volume and overlapping nature of these changes present a complex nexus that is both intimidating and difficult to navigate. Institutions, particularly their senior leaders, would benefit from being aware of this volume of change and from putting in place a strategic plan as part of a larger change management process for their organisation. This is of relevance not only to institutions seeking to mobilise climate finance, but more generally financial institutions pursuing gender-mainstreaming.

4.2.1 Strong leadership, organisation-wide buy-in, and inter-departmental cooperation underpins mainstreaming gender in resource allocation policies and practices.

This suite of mechanisms, i.e. gender analysis, action plans, and gender-responsive budgets, are of critical importance to institutions seeking to mobilise international climate finance and have been well established in the literature [1,17,18,27]. UNDP [1] points to the importance of including gender mainstreaming in "project prioritisation tools" to further advance resource planning and allocation. "Such tools typically include the following decision-making criteria: alignment with multilateral donors’ investment criteria, coherence with national policy and regulatory frameworks, the extent of climate change mitigation and adaptation impact, and cost-effectiveness" [1]. As a prerequisite for GCF accreditation, and more specifically for GCF project approval, institutions need to have policies and procedures in place to guide the implementation of these mechanisms [28]. However, the GCF does not specify the form that these institutional policies and procedures should take, nor whether they should be universally applied (i.e in relation to non-GCF investments).

None of the study institutions had developed such mechanisms before pursuing GCF accreditation, nor did any the institutions have individuals with experience developing or implementing such mechanisms. Even where gender experts were employed, their expertise did not extend into the niche area of the intersection of gender and international climate finance, and there was, thus, to various degrees, reliance on external expertise.

Given the foundational changes to institutional operating frameworks examined under the first pillar and overlaying the additional need to develop and implement policies that incorporate these resource planning and allocation mechanisms, we observe that the scale of institutional change represented thereby presents a significant departure for business as usual for entities newly pursuing climate finance mobilisation. Navigating this new complexity reiterates the need for institutions to adopt strategic approaches to developing and implementing policies and procedures and the building of institutional capacity and individual capability to implement such.

Strong leadership is required to adopt and implement such strategic approaches. WEDO & CDKN [17] describe how those in leadership roles can use their position to advocate for greater recognition, prioritisation and uptake of gender equality, especially when facing institutional pushback or inertia. Whilst senior leaders in study entities generally understood the need for pursuing gender mainstreaming as part of the efforts to mobilise climate finance, they lack the knowledge and experience of what this means for their institutions in practice. Study subjects experienced that whilst the GCF Gender Policy states what is required, it does not explicitly state where the shifts in institutional policy frameworks should occur. This is to be expected given that whilst similar, each financial institution’s policy and procedural frameworks are unique. To this end, all of the study institutions relied on assistance from external organisations, such as expert consultants or NGOs, to assist them in mapping out their needs and approaches to meeting them. For example, three study institutions found benefits in utilising a tool to undertake a gap analysis of their policy and procedural frameworks against the requirements of the GCF as well as emerging good practices identified by [17]. The gap analysis revealed the extent of the changes they would need to make and the degree to which various institutional departments would need to be involved in effecting these changes. The analysis formed the basis for internal consultations that enabled buy-in and inter-departmental cooperation to finalise and approve changes.

4.2.2 Climate finance projects present a useful sandbox to test out gender mainstreaming practices, but institutions should look further down the road and plan for their eventual broader adoption.

The general experience of study institutions exploring the adoption of gender mainstreaming practices is that newly developed external facing gender policies and procedures are initially established for mandatory application only in a limited set of circumstances, such as for the specific development of GCF project proposals and do not generally apply across other investments. However, the experience of several institutions shows that within a relatively short amount of time, the benefits begin to be realised within the institution, and the policies and practices begin to be applied to an ever more broad set of investments. For example, in the case of CRDB, these are now being applied to GCF projects and all projects within their growing sustainability portfolio (CRDB,personal communication, 2023). In the case of IDBZ, recently accredited to the GCF, their new gender policies and practices apply across new investments of any type, not just those related to climate change (IDBZ, personal communication, 2023). FBC Holdings, a group of commercial finance institutions, is likewise pursuing gender mainstreaming in an integrated approach accross all operations (FBC,personal communication 2023).

Such an approach is particularly favourable as gender considerations become increasingly salient across development finance and to pre-empt escalating requirements over time. Such best practices will assist entities in getting "ahead of the curve", capitalising on this holistic mainstreaming process to avoid duplication of efforts in the near future when such best practices become standard requirements or as other funds and funders continue to look to the GCF for reference. Additionally, considering the extensive timelines of GCF accreditation and project consideration and approval, present satisfactory compliance may shortly ’expire’ as new more rigorous criteria and requirements are introduced. As described above, there has been an observed trend of the GCF ratcheting up requirements over time, which is likely to continue considering the Fund’s intention of distinguishing itself based on gender mainstreaming.

4.3.1 New roles, job descriptions, and KPIs need to be developed and implemented to ensure accountability in practice.

Accountability in practice is predicated on having individuals with clear roles and responsibilities in place to drive implementation. Our examination of the experience of study institutions has revealed that, in almost all instances, gender mainstreaming has called upon institutions to examine individual and collective roles and responsibilities. As a new set of operations for institutions, the implementation of external-facing, opportunities-based gender policies and procedures require new operating functions. Consequently, institutions need to establish the operating mandate for gender mainstreaming within relevant departments, clarifying roles and responsibilities (i.e. with new or amended job descriptions) and critical for ensuring accountability and setting new key performance indicators (KPIs) for teams and individuals.

4.3.2 Gender champions need to be recognised and supported to pave the way for institutional change.

The experiences of institutions indicate that effecting such foundational changes to mandates, job descriptions, and KPIs was not straightforward. In all instances, institutions had yet to employ individuals with the requisite gender expertise to guide the process. Consequently, non-experts stepped forward, or were by default required, to play the role of champions for gender mainstreaming. These early champions generally steered forward foundational institutional changes in addition to their existing roles and responsibilities, with little formal acknowledgement, said to be driven chiefly by passion. The efforts of these early champions are attributed to unlocking critical steps in their institution’s progress. WEDO & CDKN [17] echo this finding, highlighting advocates for gender equality as a critical enabling factor, particularly in building gender considerations beyond the bounds of project activities.

4.3.3 New operational mandates for gender mainstreaming responsibilities of various business units need to be established.

Ultimately however, ensuring that gender mainstreaming takes place, not only within the internal operations of the bank but also within the external investments they make and projects they develop, requires that new mandates be developed and housed at various levels within the institution. For example, pre-existing gender-related mandates related to risk management or employment equity are insufficient to promote gender mainstreaming. This means deciding where and how to delegate the new broader mandates for institutions.

DBN decided to house the new gender mainstreaming mandate within their pre-existing Management Credit and Investment Committee. This cross-functional committee did not ordinarily deal with gender or developmental matters; however, allocating the mandate was part of the CEO’s strategic and cultural shift to bring greater focus on transformative development impact into the bank’s operations. DBSA’s experience in this regard illustrates that gender champions carry much of the responsibility for setting up and ensuring the functioning of such cross-functional teams.

4.3.4 Attributing new responsibilities and KPIs requires strong leadership and change management practices.

Whilst allocating mandates to cross-functional groups is attributed to being a vital step in the gender-mainstreaming process, it comes with its challenges. The interaction between gender mainstreaming mandates across the organisation presents complex new ways of engagement for staff. Study subjects agreed that attaining buy-in from all members of newly mandated groups is initially difficult. Staff tend to be apprehensive about the new responsibilities they are given. It is especially risky to allocate new individual KPIs without first undertaking awareness raising, acculturation, and training activities so that staff understand what is expected of them. This should be seen as a participatory process in which senior leaders take responsibility.

4.3.5 Allocating gender mainstreaming KPIs to senior leaders advances the adoption of institutional changes.

In the case of IDBZ, the mandate for gender mainstreaming "sits at the top", with the CEO being assessed on the bank’s impact on youth, women and vulnerable groups (IDBZ, personal communication, 2023). The operational mandates and KPIs trickle down to the rest of the organisation. Similarly, DBSA has included gender mainstreaming in the CEO’s mandate, which further trickles down into the corporate performance cards (i.e. KPIs) for executives newly delegated with various gender mainstreaming responsibilities (DBSA, personal communication 2023).

4.4.1 Dedicated expertise needs to be appointed, and budgetary allocations for this purpose need to be made.

Typically, the decisions by study institutions to apply for GCF accreditation were reached at an executive level. However, the required additions and changes to organisational policy and procedures to comply with the GCF Gender Policy needed to be driven and implemented by individuals within the bank’s operations. Given the pressure of complying with GCF accreditation requirements, in almost all instances, non-expert champions were required at some point to both drive the required changes to institutional policy and procedures whilst simultaneously undertaking their pre-existing functions. Study participants generally agree that having dedicated resources driving the updating of policy and procedural frameworks is a more optimal approach. Furthermore, they agree that the most effective approach is for institutions to employ dedicated resources with gender expertise to steer this process. Doing so can significantly reduce the timeframes associated with effecting the wide-scale changes and, ultimately, the timeframes for mobilising climate finance. This is reinforced in the recommendations of the [17], which advocates for building internal, wide-reaching capacity and deliberately integrating gender specialists/resources within climate finance/project development teams.

Despite the advantage of bringing dedicated gender expertise on board, the business case for doing so is challenging to make. The experiences of study institutions indicate that it takes anywhere from one to three years to effect the necessary policy and procedural changes to comply with GCF accreditation requirements. Developing GCF project proposals and having these approved is also a complex and time-consuming process, taking on average three years to complete, and subject to navigating the agendas of the GCF task managers and Secretariat, particularly in their discretion in shaping the project portfolio, and by extension, the expedition of projects (or not) through the bottlenecked GCF review pipeline. Additionally, there is a large window from project approval to the first disbursement of funds, sometimes up to a year. Therefore, whilst administration fees drawn from GCF-funded projects can be utilised to cover the salaries of dedicated staff, there is a significant gap in time in which an institution will need to fund these salaries without a linked revenue stream. Once an institution has multiple GCF-funded projects approved, administration fees stack up, so the business case is more easily sustained. Although, as the experience of one accredited entity demonstrates, there still exists a risk where an institution’s funded projects end, and newly funded projects still need to be approved, so there are no funds available to cover such salaries in the intervening period. This risk supports the case for not making gender capacity and resources GCF-specific (and thus not dependable) but mainstreaming and institutionalising such costs within broader operations and projects.

In addition to the challenging business case for funding dedicated expert salaries, finding experts in the region at the interface of climate finance and gender mainstreaming is difficult, with such combined skill sets being relatively scarce. Consequently, institutions have been relying on external consultants to build institutional capacity, supporting non-expert champions to augment institutional frameworks and providing awareness raising and skills development amongst the wider staff body. In some instances, this external support is provided pro bono by development partners and NGOs, and in other instances, this has been paid for by the institutions themselves.

The gap analyses also suggested that institutions engaged external consultants to develop policies, guidelines and toolkits for gender mainstreaming. While this approach can allow institutions to temporarily access/utilise specialised expertise particular to the GCF, it also presents a severe risk. Suppose this approach is not accompanied by internal capacity strengthening and socialisation of gender concepts and expectations. In that case, institutions risk being unable to conduct satisfactory quality assurance and evaluate their value and applicability. For example, the authors observed that several of the institutional policies reviewed during the gap analyses suggested having been hastily developed by third-party consultants without clear ideas of the organisation’s work or the policy’s application, using generic, boilerplate copy and recommendations not specific to development, climate or environmental investments or even showing signs of having been intended for completely unsuitable applications. Another gender policy reviewed, for example, whilst including good conceptual alignment and theoretical commitments to gender mainstreaming, lacks context, fails to align with other institutional policies, and lacks specific guidelines, actions or indicators for implementation. It does not make provision to develop these tools. Such policies are either impossible to practically implement or require additional time and resources to revise and operationalise, potentially furthering the opinion that such pursuit of gender mainstreaming is difficult, laborious, or costly.

Whilst the GCF is hypothetically accommodating of a marginal mainstreaming process to attain accreditation (offering conditional accreditation, for example), their expectations in considering and approving project proposals are much less flexible. The minimal viable product to get accredited with conditionalities is likely insufficient to get projects approved. Entities should look to avoid the situation experienced by recently accredited entities which have met the accreditation requirements (with/without conditionalities) based on updated policies/institutional frameworks but have no internal capacity to actually develop a project and so rely extensively on external consultants. Furthermore, entities may find themselves in a situation where they do not have the required internal team to rigorously manage the implementation of approved projects, leading to a slew of adverse outcomes impacting their ability to mobilise further climate finance in the future. WEDO & CDKN [17] highlight how the short-term, individual (and particularly international) gender consultant model dominates the project development landscape and caution how it is not best suited to the task.

4.4.2 Staff across various departments need to attain new capabilities built out in a stepwise manner.

The effects of the foundational changes to institutional frameworks are felt across various actors within organisations, including those in risk, investment, compliance, and implementation departments. Individuals working within these departments require knowledge and skills about the interface of climate change and gender with their work. Additionally, they require knowledge of how their functions relate to one another in the aforementioned changing context of project taker to project maker. Consequently, they are exposed to a significant volume of new information and are expected to translate it into several new or augmented functions. The experiences of study institutions show that this degree of change and capacitation is best approached stepwise and benefits from a programmatic, multi-stakeholder approach, with iterative internal engagements over several years. It further benefits from having dedicated internal experts to maintain momentum to effect these changes over the extended time frames in which they take place.

In the case of DBN, for example, the first gender mainstreaming awareness and acculturation workshop with senior management took place in 2018 with assistance from the SACFP. Instead of developing a separate, standalone gender policy for application to GCF projects, the decision was taken to pursue gender mainstreaming in a holistic and integrated manner across DBN’s existing policy and procedural frameworks. DBN has been unable to finance the appointment of a full-time gender specialist and has utilised non-expert champions and pro bono services to implement the decision. This approach took several years to foster complex integrated changes across the bank, forming part of a more extensive review of the bank’s environmental and social management system. The process culminated in adopting a suite of revisions to policies, procedures and mandates adopted in 2022. At the time of publication, DBN has submitted their comprehensively revised frameworks to the GCF as part of its accreditation application. It hopes to receive approval for accreditation without any conditionalities on further gender mainstreaming requirements. Currently, the gender mainstreaming requirements are obligatory for GCF funded projects and optional for all other future projects in the bank’s portfolio.

This experience differs from that of IDBZ, which hired two new gender experts in 2018 who shepherded the process of evolving the bank’s policies and procedures to be in compliance with the GCF Gender Policy ahead of submitting their application for GCF accreditation. IDBZ makes the business case for these new hires by looking beyond their function in relation only to climate finance projects, which are yet to yield any revenue, and instead links their functions to advancing developmental benefits across their wider portfolio that is yielded as a result of taking a gender mainstreaming approach.

As these institutions continue to engage with project conceptualisation in new and emerging sectors like climate finance, amongst constantly evolving inclusion criteria, they will continue to face challenges of operationalising complex concepts into policy and practice (such as ’justice’ in instances of transitions, youth empowerment, or incorporating Indigenous People and knowledge systems). In this regard, the pursuit of gender mainstreaming, despite its critics and challenges, offers a well-established community of practice and an accessible "training ground" for institutions to engage with such wicked problems.

4.6.1 The "complete overhaul approach".

The complete overhaul attempts to develop and implement, in one coordinated process, all the necessary components to institutionalise gender mainstreaming in practice. At its purist, this approach seeks to put newly developed policies and procedures in place, make foundational changes to organisational structures, and develop the necessary capacity before applying for GCF accreditation. Where this approach takes a tremendous amount of time and effort to convince, coordinate and capacitate across the organisation, it has the potential of yielding a more thoroughly integrated outcome where the extensive nexus of interactions between various business functions have been foreseen and planned for in advance. This integrated approach has the benefit of meeting the requirements of funders such as the GCF (i.e. accreditation without conditionalities) and ensuring that staff understand their newly evolved roles and functions from the outset. However, with this approach, the volume of change scoped from the outset can intimidate staff and requires careful change management considerations. There is a risk that staff do not fully understand why these changes are necessary and perceive the added administrative burden and responsibilities as overwhelming. The period for effecting such far-reaching changes can further build on these feelings, leading to burnout or apathy around the process. As described above, engaging external specialists to assist this process poses additional risks to institutions, particularly if these institutions lack the expertise or capacity to manage consultant performance and outputs.

4.6.2 The "iterative changes approach".

The iterative changes approach is more pragmatic than the complete overhaul approach. Establishing a standalone gender policy, specifically applicable to GCF funded projects (once accredited or in partnership with an accredited entity), is faster and generally less imposing to those who are concerned with the implications of more broadscale changes. Attaining buy-in for the application of new policies and procedures in the limited context of GCF projects provides a sandbox in which the organisation can test the functionality of new policies and procedures, adapting them as they learn, and slowly paving the way for the eventual application of gender mainstreaming provisions to all future investments. The requirements for GCF accreditation can be met through a limited number of changes to the broader suite of institutional policies and procedures. Once the accreditation hurdle has been overcome, further policy provisions and procedures can be developed. In developing the first GCF funded project proposal, institutions encounter gaps in their frameworks and act rapidly to cover these. Similarly, other gaps may be revealed at project implementation that can be addressed in practice. This approach enables learning by doing and provides practical examples for staff to orientate around as they make necessary changes and develop necessary capabilities.

The challenge with this approach is that institutions may run into unforeseen and unplanned complexity where operative functions are required to interact with one another in practice in new, unplanned ways. Ultimately this can lead to frustration and delays in the process, which may present various risks, including financial and reputational risks. The transaction costs of the iterative changes approach can thus be high if not managed properly. Managing expectations and interactions can be challenging, requiring both strong leadership and flexibility amongst staff to learn, work together, and make changes "on the job”. Iterative changes may also lack the inertia of a complete overhaul, with mainstreaming stalling with "good enough" revisions—for example, in the gap analyses, one institution’s gender policy, whilst promising, had not been mainstreamed across the rest of the institution’s suite of policies and protocols, thus hindering its implementation and operationalisation. The experience of study participants indicates that, given the novelty of climate finance and gender mainstreaming, for most institutions, the levels of understanding and capability amongst leaders are still relatively low, which does not bode well for maintaining inertia.

Given that benefits and challenges are associated with either approach, it is less critical which approach is selected and more important that institutions think about which approach they wish to adopt and develop a strategic plan to implement that approach in a coordinated manner. Developing a strategic approach from this level of awareness has the most potential for yielding positive outcomes with regard to expectation management, buy-in, acculturation and the adoption of the normative basis for gender mainstreaming across the organisation.

4.6.3 Partnership approaches promote learning by doing and enable the establishment of a track record of implementation.

Our research has further revealed the benefits that accrue from adopting a partnership approach that promotes learning by doing and enables the building of a track record of gender mainstreaming. Partnership approaches yield some benefits of the iterative changes approach with reduced risks. Study institutions that are successfully mobilising climate finance point to establishing strategic partnerships for developing and delivering projects as an important low-hanging fruit. For entities with little to no climate finance experience, partnering with experienced, already accredited entities on joint projects presents an opportunity to begin to navigate the complex nexus of institutional changes in a practical manner that is both low-risk and incurs low transaction costs. The partnership approach also serves to acculturate the institution to operate with an external gender lens. It can expose different operating functions of the business to gender mainstreaming activities without wholesale changes to existing policies and procedures that can be seen as intimidating. It allows for external-facing gender policies and procedures to be developed and tested in a "sandbox" setting before being applied more generally to the institution’s portfolio of investments. International and regional accredited GCF entities are good potential partners as they can operate across multiple countries and generally have deep experience in climate finance projects. The benchmarking of accredited or successful neighbour institutions can also support gender champions in advocating for sceptics and dissidents in their organisations. It is further possible, where available, to partner with other already accredited entities in the country.

Pursuing strategic partnerships has the added advantage of allowing an institution to build a track record of gender mainstreaming in climate projects to support any future accreditation applications to climate finance funds. Study institutions reference this kind of experience as a critical factor influencing the successful outcomes of their accreditation process (CRDB,personal communication, 2023; DBSA, personal communication, 2023). Furthermore, partnerships can be utilised for already accredited entities to test new ideas, such as DBSA newly partnering with UN Women to develop innovative Gender Bonds (DBSA, personal communication, 2023).