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WOMEN ENTREPRENEURS ARE ESSENTIAL TO A JUST RECOVERY AND A GREEN TRANSITION
Amidst the chaos of COVID-19, many small businesses and entrepreneurs were stopped in their tracks – with women bearing the brunt of the impacts. Women entrepreneurs were particularly vulnerable to the pandemic’s challenges, with 90% of women-led businesses experiencing a significant decrease in revenues, whilst also taking on the majority of increased childcare and household demands.
This is a risk in more than one way. Women-run businesses are some of the most innovative and socially oriented businesses, and their success is essential to our chances of achieving a green transition and creating a more just and equal future.
The numbers show that women have a greater tendency to start businesses with a social enterprise model or social impact focus than men [1]. Other studies indicate that teams with more women are more innovative;[2] helping drive the kinds of solutions we need to accelerate the green transition. When women design solutions, they are more likely to recognise and address the needs of women, who are both disproportionately impacted by climate change and often excluded from decision-making on how to address it. [3] These are strengths we must encourage, cultivate, and celebrate as we work together to find solutions to the climate crisis that are just and equitable, as well as rapid and scalable.
As well as essential to climate action, supporting women entrepreneurs is essential to women’s economic empowerment. A study by BCG found that closing the gap in participation in entrepreneurship between women and men could increase global GDP by approximately 3% to 6%, boosting the global economy by $2.5 trillion to $5 trillion.[4] Businesses that source from women entrepreneurs also see benefits in terms of more innovation and increased supply chain security.
Starting and scaling a business is no small task. It requires time, experience, financing, and access to procurement departments and networks. In all these areas, women face systemic barriers and disadvantages that hinder their ability to succeed. Research from BCG shows that companies founded or cofounded by women averaged $935k in investment, less than half the $2.1 million average of their male counterparts, for example.[5] Many of these challenges have been compounded by the covid-19 pandemic, which has hit small and medium enterprises (which women are more likely to run) the hardest.
In the context of sustainability-oriented businesses, often these challenges are even more pronounced. Specific solutions such as climate tech are highly capital intensive, which means that women’s lower access to finance is a particular barrier to entry, for example.
Further, in recent years, many finance providers including venture capital firms have created standardised processes (i.e., consistent assessment criteria and questionnaires for investment opportunities) in an effort to eliminate unconscious bias against women and other groups from their investment decision-making. However, in the space of sustainability and impact investment, there are fewer of these formalised processes because it is a newer type of investment and because it includes a wider range of “soft” criteria that inform decision-making. Because it is less formalised, there is a greater risk of unconscious bias against women entrepreneurs affecting funding decisions.
Given the latent potential of women entrepreneurs to play a driving role in defining our green future, particular attention needs to be paid to addressing existing barriers and supporting green women entrepreneurs to succeed. To do this, green women entrepreneurs can be supported with access to green financing, skills training and access to sustainability and procurement departments of businesses and governments, for example.
To start, businesses support women entrepreneurs across disciplines by adopting gender-responsive procurement practices. For those just beginning this journey, the Women’s Forum’s Inclusive Sourcing Journey can be valuable tool to identify next steps. This digital tool assesses the maturity, reach and impact of a company’s supplier diversity and inclusive sourcing practices, to provide a benchmark of their position and offer specific, actionable advice to improve inclusivity throughout the organisation’s procurement practices.
Businesses should also look for innovative ways support women entrepreneurs specifically providing sustainable solutions. In this vein, this year, to harness the potential of women entrepreneurs to drive the green transition, the Women’s Forum, HEC Paris and P&G have partnered to take action through WomenEntrepreneurs4Good programme (WE4G).
The annual programme aims to inspire and foster female creativity and entrepreneurship for good, supporting women entrepreneurs with high-potential ideas in alignment with the European Green Deal strategy. The 2021 WE4G programme welcomed 200+ women entrepreneurs representing over 60 climate and sustainability solutions. Through workshops led by HEC Paris academic teams and experts on customer research, business development, and honing presentation skills, the candidates were equipped with valuable tools with which to grow their business. The process includes elements of mentorship, listening, collaboration, and personal skills development.
Nine finalists chosen by the Grand Jury are now embarking on a 5-month online incubator programme at the HEC Paris incubator to support them to further enhance their business model, and to provide them access to networks such as the HEC Paris alumni network, technical support, and connections to a global ecosystem of businesses and investors. Throughout this process, partners of the Women’s Forum contribute their expertise, perspective, and advice as mentors to build participants skills and strengthen their projects. Of the nine outstanding finalists, one example is Naturblatt – a company founded by Priya Selvaraj which aims to reduce the plastic usage through sustainable natural-leaf based alternatives with minimal processing, while providing livelihood to many women micro-entrepreneurs. The Women’s Forum will accompany the entrepreneurs throughout their journey, celebrating their achievements in November with a graduation ceremony combined with a pitching session in front of investors.
As one of the Women4Business Daring Circle partners, P&G is committed to supporting women entrepreneurs to succeed in creating new sustainable and transformational businesses and committed to spending $10 billion with women-led businesses by 2025, and to advocating for public and private sector action to provide new polices and tools that help women to succeed.
We are excited to collaborate with other businesses and stakeholders that are committed to driving a truly inclusive and green transition. We call on private sector companies and governments to embark on their own inclusive sourcing journeys, and to ensure that women entrepreneurs are able to fully participate in the green transition that will shape our future.
Jamila Belabidi; Women Economic Empowerment Program Director, P&G.
Emma Cochrane; Head of Strategic Projects, HEC Paris Innovation & Entrepreneurship Center
Audrey Tcherkoff; Managing Director, Women’s Forum for the Economy & Society
[1] Hechavarría, D. M., Terjesen, S. A., Ingram, A. E., Renko, M., Justo, R., & Elam, A. (2017). Taking care of business: the impact of culture and gender on entrepreneurs blended value creation goals. Small Business Economics, 48(1): 225–257. Accessed here, pp. 13.
[2]Díaz-García, C., González-Moreno, A. and Jose Saez-Martinez, F., 2013. Gender diversity within R&D teams: Its impact on radicalness of innovation. Innovation, 15(2), pp.149-160. Accessed here, pp. 12.
[3] Women’s Forum for the Economy & Society. ‘Women leading the green recovery. Promoting women in entrepreneurship and STEM will help build a sustainable and equal world.’ Accessed here
[4] Shalini Unnikrishnan & Cherie Blair. 2019. Want to Boost the Global Economy by $5 Trillion? Support Women as Entrepreneurs. Boston Consulting Group. Accessed here
[5] Katie Abouzahr, Matt Krentz, John Harthorne, and Frances Brooks Taplett (2018) Why Women-Owned Startups Are a Better Bet. BCG.com. Accessed here