Private Sector Engagement

Current levels of global investment in sustainable forest management are low-- only 3% of climate finance is earmarked for addressing landscapes and forestry. Without significant, long-term private sector investments, climate finance alone will not be sufficient to support critical efforts to reduce emissions from deforestation and forest degradation (REDD+).

The Forest Carbon Partnership Facility acknowledges the private sector’s pivotal role in scaling up climate smart, sustainable land use. As countries set up the building blocks for REDD+, and develop larger-scale emission reductions programs, the FCPF is playing a catalyzing role in connecting countries with private sector investments.

 

  • The FCPF helps participant countries connect with different financing agencies of the World Bank Group, including the International Finance Corporation, the International Bank for Reconstruction and Development and the International Development Association.

  • FCPF countries can use part of their Readiness Fund grants, as well as part of their eventual results-based payments for emission reductions, to support private sector engagement.

  • FCPF country participants undergo a multi-stakeholder self-assessment which is a participatory and inclusive process that includes the perspectives and engagement of the private sector.

  • The FCPF Carbon Fund is an innovative example of governments and the private sector working together, with private sector members part of the core governance structure of the fund. In addition, the Carbon Fund has allocated significant financial support to help participant countries further catalyze private sector engagement.

  • 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.

 

 

 

Why should the private sector engage with the FCPF?

Private sector companies can benefit from FCPF projects as many deliverables are public goods specific to an economic sector or country. Examples of these public goods include establishing monitoring, reporting and verification (MRV) systems, carbon baselines and registries, and environmental and social safeguards.

For example, MRV systems supported by FCPF program grants can be used by countries and companies alike to advance sustainable land use action on the ground. In countries such as Cote d’Ivoire and Ghana, commodity companies are benefiting from forest cover change data to track the zero-deforestation commitments they have made in their supply chains. Companies can also use forest cover change data and baseline studies to estimate future payments for emission reductions.

The FCPF also plays an influential convening role in the global forests and climate change space. For example, the FCPF is member of the Tropical Forest Alliance 2020, a global public-private partnership in which partners take voluntary actions to reduce deforestation in several key sectors including palm oil, soy, beef, and paper and pulp.