Financing mechanisms for resilient multifunctional landscapes

Attaining climate resilience, biodiversity conservation, and sustainable livelihoods in the Global South, a transition from isolated, sector-specific investments to comprehensive, landscape-level strategies is essential. Funding for multifunctional landscapes is still insufficient, short-lived, and poorly coordinated, with notable deficiencies in smallholder financing, ecosystem restoration, and the provision of public goods. This technical brief compile evidence from Africa, Asia, and Latin America to explore what types of financing mechanisms are available, why current financial flows do not adequately support integrated landscape management and how innovative financing solutions can address these issues. Utilizing a structured analytical framework, the brief identifies key financial gaps, mismatches between risk and return, and institutional obstacles that hinder both public and private investment. It outlines a classification of financing mechanisms based on sources of funding, functionality, instruments used, and themes. This includes public finance, private and impact investment, blended finance, market-based tools, and community-driven models—emphasizing how various instruments align with specific landscape functions like climate mitigation, adaptation, biodiversity conservation, and livelihood improvement. The analysis highlights the necessity of coherent governance, secure land and carbon rights, effective monitoring and verification systems, and risk-sharing strategies for financing to work. The brief develops policy recommendations to create an enabling environment for landscape finance – aligning fiscal policies with nature-positive outcomes, capitalizing national environmental and landscape funds, expanding blended finance platforms, and investing in institutional and data capabilities. Implementing these measures would assist governments and development partners in scaling finance to create resilient landscapes that promote climate, biodiversity, and development objectives.