The FCPF’s Readiness and Carbon Funds support partner countries in engaging with the private sector by creating replicable, scalable, and innovative models in governance and finance. These models enable investments, products, and services that benefit the climate, biodiversity, and communities.
In particular, the FCPF helps countries understand and promote private sector investment by removing barriers, increasing liquidity, diminishing risks, and seeking out innovative entry points for the private sector to help scale up REDD+ activities.
The FCPF’s Private Sector Engagement Approach focuses on:
- Promoting a positive enabling environment for the private sector through supportive public policies and governance;
- Encouraging financial innovation and crowding in new finance, including through results-based payments, while enhancing and unlocking trapped capital;
- Engaging with supply chain companies to achieve economically, environmentally, and socially sustainable value-chain operations.
The FCPF’s Methodological Framework for advancing through the stages of REDD+ readiness is recognized globally as an effective tool to deploy and coordinate finance from a variety of sources including the private sector. Also, grants from the FCPF's Readiness Fund can be used, in part, to develop and implement national strategies for effective private sector engagement.
The FCPF Carbon Fund presents an innovative way for governments and the private sector to work together. Members of the private sector form a core part of the governance structure of the fund. The Carbon Fund also allocates significant financial support to help participant countries further catalyze private sector engagement.
Why should the private sector engage with the FCPF?
Enabling environments
The FCPF can help improve national policy and regulatory environments for the private sector through grants and technical assistance. The FCPF can also help enhance public-private partnerships aimed at reducing deforestation and emissions. The FCPF offers grants and payments for emission reductions that can help governments leverage private sector engagement in REDD+ and meet national climate targets.
Climate finance and banks
The FCPF enables financial entities to increase sustainability in investment practices by improving the regulatory environment while demonstrating innovative financial mechanisms to incentivize market entry. The FCPF also provides the opportunity to invest in carbon credits, green bonds, and insurance products through its private sector partners, IBRD, IFC, and others.
Supply chain companies
Using the World Bank’s convening power, the FCPF supports the implementation of deforestation-free sourcing policies. The FCPF promotes climate-smart models and disseminates best practices through sectoral platforms. The FCPF helps to identify REDD+ funding options and pilot investment projects. By collaborating with the FCPF, companies can promote sustainable branding via global events and media, and be well-positioned to engage in sustainability certification.
Sustainable Cocoa Initiatives Through Agroforestry
The Cocoa & Forest Knowledge Exchange program is part of the objective of the Forest Carbon Partnership Facility (FCPF) of leveraging the private sector through activities and engagement in specific supply chains to drive the reduction in deforestation