Climate change: investing in African women entrepreneurs is a winning bet

Kate Gannon, Shaikh Eskander, June 2025

The Conversation

African women are often considered particularly vulnerable to climate change. Our previous research suggests that women entrepreneurs often face ‘three additional forms of risk’ from climate risks compared to men.

To download : womens-climate_6-28-2.pdf (18 MiB)

First, their livelihoods often depend on climate-sensitive sectors. Second, they face additional barriers to accessing the resources needed for adaptation in the business world, such as financing, new adaptation technologies, and markets for climate-smart goods and services. Finally, they also bear the primary responsibility for managing climate risks at the household level.

However, our new study also suggests a parallel, less highlighted reality. Women entrepreneurs could also be at the forefront of climate resilience action in Africa.

As part of the Women Entrepreneurs in Climate Change Adaptation (WECCA) project, we are studying their strategic role in more inclusive adaptation actions. Women’s entrepreneurship contributes significantly to economic development in Africa.

Their businesses make a significant contribution to economic activity. They are active in key value chains such as agriculture and food processing, which boost export earnings. And through local cooperatives and tontines, they facilitate access to finance and markets for others in disadvantaged regions.

Studies also suggest that women are more likely to use their profits to meet their households’ most basic needs. Small businesses are the backbone of most African economies. They generate most employment opportunities and provide essential goods and services.

Yet these businesses are on the front line of climate change. Floods, droughts and simultaneous disruptions to electricity, water and transport networks threaten supply chains, disrupt markets, interrupt livelihoods and cause physical damage to businesses. Businesses must adapt to survive.

But how they adapt matters. It can strengthen their long-term resilience or, conversely, increase their vulnerability. The results of our study of small businesses in climate-vulnerable regions of Kenya and Senegal suggest that women-led businesses take a more sustainable approach to adaptation than those led solely by men.

This strengthens their long-term resilience. We also found that adaptation support (such as financing or training) has a greater impact on women-led businesses than on male-led businesses.

These findings show that supporting women entrepreneurs is not just a matter of equality. It is also an effective strategy for building more climate-resilient economies. By investing in a more inclusive business environment, governments and donors can achieve better results in the long term.

Women entrepreneurs as strategic actors

Our study analysed data from a survey of small businesses in semi-arid regions of Senegal and Kenya. The aim was to examine how the presence of women owners and managers influenced businesses’ adaptation to extreme events. Our data set covered the Senegalese regions of Louga, Saint-Louis and Kaolack. In Kenya, it covered Laikipia County.

These regions are affected by extreme droughts and floods, which are expected to intensify in the coming decades. Entrepreneurship in these regions is particularly concentrated in the agricultural sectors. These sectors are highly exposed to the effects of extreme events. We studied the impact of women’s presence at the head of a business on the number of sustainable and unsustainable adaptation strategies adopted. In line with the existing literature, we classified adaptation strategies as follows:

Our findings show that companies led or co-led by women adopt fewer unsustainable strategies than those led solely by men. Unsustainable strategies are often emergency responses. They limit immediate losses, but at a cost. Examples include selling equipment or laying off staff.

These decisions come at a cost. They weaken the company’s business, slow its growth and reduce its ability to recover from other shocks.

Conversely, companies led by women are more likely to adopt sustainable strategies that protect the company’s long-term viability. These measures include:

Such strategies can help reduce vulnerability to future climate shocks and support income stability and recovery during periods of climate stress. These results are all the more striking given that women face more barriers to adaptation. It is well documented that women entrepreneurs in Africa have more difficulty than men in accessing the resources needed for adaptation, such as financing, training and technology.

Domestic responsibilities, which are often assigned to women, also limit their available time and mobility. This reduces their access to training and markets. Social norms can also restrict their decision-making power, both at home and in the workplace, and hinder them from investing in adaptation.

In this context, the adoption of sustainable strategies by women deserves special attention. Some measures, such as cultural change or income diversification, may require less money up front than others. On the other hand, actions such as selling assets or reducing staff require the company to already have significant resources.

The fact that women adopt fewer unsustainable strategies may therefore also reflect a lack of resources: they simply have fewer assets to mobilise in times of crisis.

But this makes the results even more significant. Sustainable strategies remain highly effective. Our study shows that women entrepreneurs often find appropriate, forward-looking solutions, even with limited resources. They are therefore not only more vulnerable: they are also strategic players, driving innovation in adaptation to climate change.

What needs to be done

These findings highlight not only the obstacles that women entrepreneurs still face, but also their largely underestimated potential for adapting to climate change.

Our study shows that this potential can be fully realised when appropriate support is put in place. When adaptation support – financial or technical – is available, women-led businesses do not just catch up with those led by men. They often surpass them.

This opens up a real strategic opportunity: investing in the adaptation of women entrepreneurs can yield significant benefits, not only for their businesses, but also for their communities and the economy as a whole.

These findings underscore the importance for governments to create an environment conducive to the adaptation of women-led businesses. This requires the design of targeted policies, programmes and support to address persistent inequalities, such as access to appropriate financing, technology and adaptation-related goods and services.

This reality also needs to be better documented. Our study is based on the best available data, but from a limited sample focused on a few regions of Senegal and Kenya. These results cannot therefore be generalised to the whole of Africa.

To reinforce these findings, there is an urgent need for more high-quality, gender-disaggregated data on the adaptation behaviour of small businesses.

The World Bank’s business surveys could play a key role, as they are one of the most comprehensive sources of data on small and medium-sized enterprises worldwide.

Sources

To go further