Staff Writer l Palladium - Mar 11 2024
5 Strategies for Scaling Climate and Nature Solutions with the Private Sector

Last month, we hosted the Palladium Climate and Nature Forum in Washington, DC, bringing together public and private institutions, sustainable investors, and experts committed to protecting, sustainably managing, and restoring natural landscapes. The rich dialogue was supported by case studies from Palladium’s global projects, including Partnerships for Forests, Regeneration, and the Rebuild Facility. Several promising strategies emerged from the presentations and group breakout sessions for partnering with the private sector to scale climate and nature solutions around the world.

Nature-based solutions need financing. In the fight against climate change, it’s the bottom line and one that Palladium teams and thought leaders have been touting for years. While traditionally, these projects have been funded by governments and donor organisations, it’s clear that there’s a massive funding gap for nature that must be filled by the private sector.

While involving the private sector in nature-based projects can provide an extra layer of complication, it’s a worthwhile cause, and one that requires coordination at both the local community level and the broader financial sector level. At its best, private sector financing can be the key to unlocking massive scale and depth for climate and nature restoration projects around the world.

How to Partner with the Private Sector for Scale

1. Focus on building and empowering local businesses and entrepreneurs to innovate and accelerate projects through nature and climate positive pipelines.

For nature-based solutions to even have a future, rural livelihoods and entrepreneurial opportunities must be made attractive to youth, innovative thinkers, and entrepreneurs.

New solutions may involve integrating advanced technologies, incorporating traditional knowledge and cultural heritage, and developing business models that can harness multiple income streams from nature-based products and services. Support structures for incubation and acceleration of new business pipelines should focus on the entire capital continuum, which will enable entrepreneurs to grow their businesses sustainably and with adequate returns.

2. Use localised investment strategies with global replicability to attract investors.

The most successful projects and investments are locally sustainable but ultimately adaptable and replicable across different regions.

But getting there requires building financial vehicles that are tailored to the unique aspects of climate and nature solutions, addressing undercapitalisation in critical Sustainable Development Goal areas, and fostering investor readiness by aligning expectations with scalable project designs.

3. Build robust partnerships and engage communities to co-create and ensure sustainable, impactful initiatives.

Communities are at the heart of most nature-based solutions projects and the most successful projects see those communities as more than beneficiaries – they’re active partners.

Climate solutions that do not provide local communities with a pathway out of poverty are not viable solutions. Building such solutions requires deep stakeholder engagement, leveraging indigenous knowledge and practices, and ensuring that interventions are co-designed with local communities. Such partnerships can enhance trust, ensure cultural sensitivity, and boost the long-term sustainability of climate and nature initiatives.

4. Integrate climate finance at a systemic level, ensuring that every financial decision and policy incorporates climate considerations, aligning with broader economic and environmental objectives.

It’s time to challenge the compartmentalisation of the finance sector and instead look to a more systemic approach where all finance is inherently climate finance.

This calls for innovative financial models that can effectively monetise nature-based solutions, overlaying additional values to ensure economic viability, and fostering a finance ecosystem that supports rapid learning and adaptation to emerging insights and challenges.

5. Scale for impact by leveraging science and evidence.

Scaling successful initiatives requires a foundation of robust evidence and strategic collaboration that transcends borders.

But it’s more than scientific journals and research – it’s leveraging success stories, creating cross-sector and cross-country coalitions, and developing platforms that facilitate knowledge exchange and joint action. If nature-based solutions are to be successful, scale and impact must go hand-in-hand, and scalability should not compromise the depth or effectiveness of interventions, but instead enhance their reach and replicability.

Nature-based solutions are one of the key answers in the global fight against climate change. Harnessing the power of private finance to scale them up is not only helpful; it’s necessary. Already, projects such as Revere, Palladium’s partnership with UK National Parks to restore the Parks at scale, are proving that it’s possible. Now it’s just a matter of partnering with the right investors who are committed to protecting and restoring our global landscapes.