The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities (Policy Brief)

This policy brief by the International Institute for Sustainable Development (IISD) and the ASB Partnership for the Tropical Forest Margins analyzes the role of the private sector within the REDD+ supply chain. It identifies key private sector actors—including investors, producers, brokers, advisors, auditors, and end-buyers—and examines the motivations and challenges associated with their engagement. The document argues that while private sector involvement is critical for scaling up investment, it is currently hindered by policy uncertainty and unresolved land tenure and carbon ownership issues. It proposes strategies to stimulate investment, such as leveraging compliance carbon markets and implementing nested crediting frameworks.

• The REDD+ supply chain consists of several core 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 actors enter the REDD+ market through various roles, including investment banks establishing multimillion dollar funds (such as Althelia with a US$275 million target), multinational firms using project grants for corporate social responsibility (CSR), and specialized developers like Wildlife Works.
• A secondary market for REDD+ credits is emerging, where intermediaries purchase credits with the intent to re-sell them at higher prices in the future, particularly as regions like California move toward cap-and-trade schemes.
• The private sector provides critical technical services and capacity building, specifically in areas such as Geographic Information System (GIS), satellite imaging, and monitoring, reporting and verification (MRV) technologies.
• Three primary challenges inhibit the scale of private sector engagement: a lack of policy certainty regarding national legislation and emission targets, unresolved land tenure and carbon ownership, and a lack of stakeholder participation in policy formulation.
• To incentivize large-scale investment, the document suggests shifting focus toward compliance-driven demand from developed countries, citing potential markets in South Korea, Australia, and Japan, as voluntary market prices are insufficient.
• The adoption of 'nested' crediting frameworks is proposed as a way 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 integrate the extractive industries and export-oriented agribusiness—which are primary drivers of deforestation—into the REDD+ supply chain beyond simple CSR initiatives.

APA

International Institute for Sustainable Development (n.d.). The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities (Policy Brief). https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf

Chicago

International Institute for Sustainable Development. The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities (Policy Brief). n.d. https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities (Policy Brief) |url=https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndprivate, author = {{International Institute for Sustainable Development}}, title = {{The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities (Policy Brief) }}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/publications/redd_private_sector_brief.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }