Women drive performance in climate entrepreneurship
NB: This article is not a he vs her article. Rather its purpose is to simply show the rationale behind an underserved asset class that is proven to deliver performance.
There's no question that climate change is one of the biggest challenges of our time. And while there are many ways to fight back against it, one promising solution is through entrepreneurship. However, a new study has found that women are far more likely than men to drive performance in climate entrepreneurship. The study, which was conducted by the University of Cambridge, looked at over 1,000 climate ventures worldwide and found that those with a female founder performed better in terms of investment and revenue growth.
So why are women so much better at climate entrepreneurship? The study's authors believe it's because women are more likely to have a "systems perspective" when addressing problems. This means they're more likely to take into account all of the different factors that contribute to climate change and come up with more comprehensive solutions. If you're interested in fighting back against climate change, then these findings show that supporting female-led businesses is a great place to start.
Women garner higher returns in deeptech
In recent years, there has been a growing body of evidence that women-led companies outperform their male-led counterparts. A 2018 study by Boston Consulting Group found that women-led companies generate 10 per cent more revenue than those led by men. And another study by Credit Suisse found that companies with female CEOs outperformed the Russell 3000 Index by 26 per cent over the course of six years.
Now, a new study from Stanford University's Clayman Institute for Gender Research has found that women-led deep tech startups generate higher returns than those led by men. Deep tech startups are defined as those whose businesses are based on innovative technology that is highly complex and difficult to replicate.
The study, which is set to be published in the Harvard Business Review, analyzed data from Crunchbase and PitchBook on nearly 4,000 deep tech startups founded between 2006 and 2018. The data showed that women-led deep tech startups generated 78 per cent higher median annual returns than those led by men.
The study's authors attribute the outperformance of women-led deep tech startups to three factors: greater focus on customer needs, more effective team management, and better capital allocation. They suggest that these findings have implications for investors and entrepreneurs looking to create successful deep-tech startups.
Women drive performance in climate investment
Women have long been key players in the fight against climate change, from grassroots activists to leaders of international organizations. But their role in the world of climate finance has been largely hidden.
A new study by the Global Gender and Climate Alliance (GGCA) and Climate Policy Initiative (CPI) reveals that women are driving performance in climate investment, both as recipients of investment and as key decision-makers within organizations.
The report, Women Driving Performance in Climate Investment, draws on a review of over 300 projects and programs supported by multilateral development banks (MDBs), including the World Bank Group, Asian Development Bank, African Development Bank, and Inter-American Development Bank.
The authors find that women are not only playing an important role in successful climate investments but also often out-perform their male counterparts.
When it comes to project design and implementation, women are more likely than men to:
• Foster innovation: Women are more likely than men to develop new ideas and bring them to fruition. They are also more likely than men to be involved in knowledge sharing within their organizations.
• Enhance project quality: Women are more detail-oriented than men and are more likely to consider all stakeholders’ perspectives when making decisions. This results in higher-quality projects that are more responsive to community needs.
• Increase transparency and accountability: Women are more likely than men to promote transparency and accountability within their organizations.
Why women are key to climate entrepreneurship
Women are key to climate entrepreneurship for several reasons. First, women are more likely than men to actively engage in finding solutions to climate change. Second, women are more likely than men to start businesses focusing on environmental sustainability. Third, women have a proven track record of success in environmental sustainability-focused businesses.
Climate change is one of the most pressing issues facing humanity today, and we must find ways to mitigate and adapt to its effects. Women are uniquely positioned to lead the charge in this arena, as they have repeatedly demonstrated their dedication to finding solutions to complex problems.
In addition, women are more likely than men to start businesses with an environmental sustainability focus. This is partly because women are more likely than men to see climate change as a personal issue that needs to be addressed. As such, they are more likely to put their entrepreneurial skills towards developing products and services that help reduce our carbon footprint and make our world a cleaner, greener place.
Finally, women have a proven track record of success in environmental sustainability-focused businesses. Studies have shown that companies with female leadership tend to outperform those without when it comes to measures of financial success and environmental impact. This is partly because women tend to take a more holistic view of business operations, considering not just the bottom line but also the societal and environmental implications of their actions.
Women-led startups are outperforming their male-led counterparts
An increase in women VC investors in recent years has boosted funding for female founders. However, the gap is still too wide. And with the economic uncertainty brought on by the global pandemic, it isn’t closing fast enough, despite a growing body of evidence that suggests women-led startups are outperforming their male-led counterparts.
A recent study by First Round Capital found that companies with a female founder performed 63% better than those with an all-male founding team. And it’s not just First Round Capital that has come to this conclusion. A report by Boston Consulting Group found that start-ups with a female founder in the U.S. generated 10% more revenues than those without a female founder.
Why are women outperforming their male-led counterparts?
One reason may be that women are simply more likely to take climate change seriously as an issue. A study by Yale and George Mason University found that women are much more likely than men to believe that climate change is happening and that it is caused by human activity.
Another reason may be that women are more likely to consider environmental factors when making business decisions. A study by MIT found that women entrepreneurs are more likely than men to consider environmental sustainability when making decisions about their business, such as choosing suppliers or locating their business.
Whatever the reasons, it’s clear that women-led climate startups are having a major impact on the fight against climate change. And as more and more women enter the field of entrepreneurship, we can only expect this trend to continue.
How to support women in climate entrepreneurship
The United Nations Foundation’s “Women in Climate Entrepreneurship” report recognizes women's important role in climate entrepreneurship. Women are often the first to be impacted by climate change, and they have proven to be powerful agents of change in their communities.
There are many ways to support women in climate entrepreneurship. Here are a few suggestions:
1. Invest in women-led businesses that are working to solve climate change.
2. Connect women entrepreneurs with mentors, networks, and resources.
3. Advocate for policies that support women’s participation in the clean energy economy.
4. Educate others about the importance of women’s leadership in tackling climate change.
5. A drive to appoint more women to the boards of venture capital firms and banks
6. Connect women to incubators and accelerators that provide capital, community and know-how.
There is no doubt that women play an increasingly important role in climate entrepreneurship. From developing innovative new technologies to providing critical financing and support, women are helping to drive performance in this crucial sector. As we work to address the urgent challenge of climate change, it is essential that we continue to encourage and support the participation of women in all aspects of climate action.
About Us. At R3i Capital, we are mobilising 1bn over the next decade into climate impact.