Private Sector Finance Programme
Why should the GM approach the private sector?
The private sector has the potential to play an important role in combating desertification and land degradation, both as a potential source of funding and as a stakeholder investing directly in sustainable land management (SLM) practises and corporate responsibility schemes. This potential has been recognized by the Conference of the Parties of the UNCCD, and the GM has been called upon by the Ten-Year Strategic Plan and Framework to Enhance the Implementation of the UNCCD (2008-2018) to “explore new sources of finance and financing mechanisms to combat desertification/land degradation and mitigate the effects of drought”, including the private sector.
There is a need to increase and diversify resources for stopping and reversing land degradation. Land use and land management are to a large degree a private-sector activity undertaken by a wide range of private-sector stakeholders from large corporations to small scale farmers. Philanthropic foundations are another group of private sector stakeholders that may be willing to invest in UNCCD related activities.
Why should the private sector invest in the UNCCD?
Incentives for the private sector to invest in SLM can take the form of legislation - including taxes - or the motivation can be based on philanthropic values. Direct or indirect business opportunities can also be an incentive for companies to invest in SLM. For example, large agro-processers may want to invest in SLM as it can ensure a more sustainable flow of organic products and give the company a “green” profile. An insurance company may see profit in selling weather insurance which can ensure land conservation practises, and a mining company may want to invest in conservation of the land at the mining site, for example in order to ensure a good relationship with the government. A private foundation may invest in projects supporting sustainable practices based on philanthropic values.
Private-sector companies and farmers are not only a potential source of financing for SLM – they are also an important potential partner, facilitator and contributor to the establishment and implementation of so-called innovative and market-based financing mechanisms. These mechanisms can provide incentives for environmental stewardship and potential investments in SLM. By analysing the motivation and interests of private-sector actors in national and site specific contexts, it is possible to identify suitable mechanisms. For example, private-sector actors may see profit in trading greenhouse gas mitigation emissions or in engaging in watershed management schemes. Market creation and standards developed for ecosystem products and services are other types of market-based mechanisms that can encourage sustainable private-sector investments.
The programme
The overall objective of the Private Sector programme is to promote actions leading to the mobilization of financing from the private sector for UNCCD implementation and the sustainable management of dry and degrading lands.
The GM meets this objective through the following services and activities:
- generating and sharing knowledge on the private sector as a source of funding for SLM with partners at the global level. This work includes identifying and encouraging key relevant private sectors, major multinational enterprises and philanthropic foundations that may be potentially interested in investing in SLM and UNCCD implementation, as well as developing tools to access funding
- providing advisory services to stakeholders at the national and regional levels on the private sector as a potential source of funding and partner, for example through capacity building workshops and through the development and implementation of integrated financing strategies
- undertaking feasibility studies and stakeholder analyses at national and regional levels to identify potential private sector partners and opportunities for investments
- supporting country partners in mobilizing resources for SLM by brokering partnerships between governments and the private sector that will lead to investments or involvement by the private sector in the programmes and projects identified, including the implementation of national action programmes (NAPs)
The programme aims to engage more private sector stakeholders in the implementation of the Convention and to encourage more investments in SLM practices and related activities benefiting land conservation. In this way the resources invested in stopping and reversing land degradation are increased and diversified.
For more information
Siv Oystese Financial and Private Sector Strategy Officer
Tel: +39 0654592782
s.oystese(at)global-mechanism.org
Related Links
Integrated Financing Strategies