The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities

The document analyzes the REDD+ supply chain, identifying key private sector roles including investors, producers, brokers, advisors, auditors, and end-buyers. It highlights that while some pioneering investment funds and multinational firms are engaging through voluntary markets and CSR initiatives, significant barriers remain, specifically a lack of policy certainty and unresolved land tenure and carbon ownership issues. The brief argues that scaling up private investment requires a shift toward compliance carbon markets, the implementation of nested crediting frameworks for direct performance-based payments, and the integration of deforestation-driving industries, such as extractive sectors, into the REDD+ dialogue.

• The REDD+ supply chain consists of several distinct business functions: project investment, project development and implementation, technical expertise and capacity building, validation and certification, carbon credit trading and retailing, and carbon credit purchasing.
• Private sector investment is diversifying, with the establishment of multimillion dollar funds in 2011 such as Althelia (US$275 million target), Macquarie-International Finance Corporation (US$25 million), and Terra Global Capital (US$50 million), alongside stakes taken by banks like BNP Paribas and Nedbank Group.
• Private sector actors serve various roles: producers like Wildlife Works develop projects in Kenya, the Congo Basin, and Latin America; brokers like Carbon Neutral Group, ClimateCare, and Camco trade credits; and auditors such as Det Norske Veritas provide risk management and certification.
• A primary barrier to private sector engagement is the lack of policy certainty, necessitating that governments clarify intentions regarding future compliance markets and develop national legislation and emission targets.
• Clear systems for land tenure and carbon ownership are fundamental prerequisites for mobilizing private investment, as developers will not invest without these clarifications and established benefit-sharing mechanisms.
• To achieve a critical mass of emissions reductions, the brief suggests enhancing investment through compliance carbon markets, citing potential opportunities in South Korea, California, Australia, and Japan.
• The adoption of nested crediting frameworks is recommended to allow private stakeholders to receive direct performance-based payments while maintaining national accounting integrity and reducing the risk of intra-country leakage.
• There is a critical need to move beyond corporate social responsibility (CSR) to engage the extractive industries and export-oriented agribusiness, which are major drivers of deforestation, in policy and regulatory processes.

APA

Bernard, F., McFatridge, S., & Minang, P. A. (2012). The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf

Chicago

Bernard, Florence, Scott McFatridge, and Peter A. Minang. The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities. International Institute for Sustainable Development, 2012. https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf.

Wikipedia

{{cite report |last1=Bernard |first1=Florence |last2=McFatridge |first2=Scott |last3=Minang |first3=Peter A. |title=The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities |publisher=International Institute for Sustainable Development |date=August 2012 |url=https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernard2012private, author = {Bernard, Florence and McFatridge, Scott and Minang, Peter A.}, title = {{The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = aug, url = {https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }