The role of public–private–philanthropic partnerships in driving climate and nature transitions

| Report

The pressing need for climate and nature action is increasingly felt across the world. In response, governments and companies have been multiplying commitments and actions in areas such as the net-zero transition, biodiversity loss prevention, and broader natural-capital preservation.1The net-zero transition: What it would cost, what it could bring,” January 2022; “The energy transition: A region-by-region agenda for near-term action,” December 15, 2022; and “Nature in the balance: What companies can do to restore natural capital,” December 5, 2022. These have in turn accelerated the momentum for public–private partnerships that combine the public sector’s ability to create enabling conditions with the private sector’s scaling ability. For their part, philanthropies are increasingly turning their attention to climate and nature, seeing them as key challenges in their own right and as intimately linked to the core issues of equity and development that have long been at the heart of their agendas.

We now see early signs of the public, private, and philanthropic sectors—often alongside a broader range of social sector actors (including NGOs, nonprofits, think tanks, and community organizations)—embracing such partnerships to tackle systemic climate and nature challenges. These public–private–philanthropic partnerships, or 4P models, have included transactional financing, industry-targeted initiatives, and wide-ranging knowledge-sharing platforms. They often (but not always) focus on emerging economies.

This report suggests a framework for such multistakeholder models. It is based on a data-driven analysis of more than 50 existing partnerships and hundreds of climate and nature solutions, alongside dozens of expert interviews. It is intended to help ensure that time, energy, and resources are directed toward the solution areas that justify the significant collaborative effort 4P models entail.

This report was developed through a collaboration between the World Economic Forum (WEF) and McKinsey Sustainability, and is part of a growing body of research and implementation efforts to advance a more orderly climate and nature-positive transition. It focuses specifically on partnerships between public, private, and philanthropic actors, or “4P models.”

We identified 31 solution focus areas among almost 135 global climate and nature solution sets that are primed for high and immediate impact through 4P models. Our analysis revealed that solution areas within the power and the agriculture and forestry sectors, as well as those addressing land conservation, consistently demonstrate high potential for impact across multiple geographies. This should not come as a surprise, as these sectors are central to climate and nature transitions, have cascading influence across all parts of the global economy, and feature proven (but not yet widely adopted) climate and nature solutions with high socioeconomic co-benefits and potential for scale.

Collectively, we estimate that these 31 identified areas globally account for about 30 percent of global emissions and 30 percent of total land area (Exhibit 1).2 Thus, effective action by 4P models could have significant positive impact. In this report, we dive deeper into six of these identified areas around the globe to showcase how solutions such as supporting energy transitions and restoring mangroves can benefit from 4P models.

Thirty-one climate solution focus areas are associated with 30 percent of global emissions and 30 percent of global land area.

These partnerships are evolving rapidly, and we continue to build our library of use cases and high-impact solution focus areas. This report seeks to be neither prescriptive nor a comprehensive assessment (see sidebar “Scope and limitations of materiality and suitability analysis”). Nevertheless, we hope it will contribute to identifying and implanting the best ways for different societal actors to collaborate on essential questions relating to the future of the planet.

Climate and nature challenges lend themselves to multistakeholder collaboration

Solving climate and nature challenges entails deep, system-level transformation. This in turn requires an understanding of the needs and constraints of a broad and diverse set of actors, the ability to bring those actors together to address well-defined objectives, the willingness to take a long-term perspective that allows for action today with benefits in the future, the capacity to run a robust day-to-day operation with a team whose duties include ensuring the partnership stays on track with its initiatives, and an appetite for experimentation and risk-taking. By their very nature, 4P models are well suited to address these issues, because they bring together many actors, each with different capabilities and strengths:

  • The public sector can enact policies, put in place incentives, regulations, and support mechanisms, and invest funds to support solutions and create stable and positive enabling conditions for further investments.
  • The private sector, including corporations supported by investors, can establish the required business models and mobilize resources to grow and deploy solutions at scale.
  • Philanthropies can leverage their higher risk tolerance, longer time horizons, and knowledge of intergenerational and equity issues to invest in solutions that are not yet widely adopted. Philanthropies can also bring an end-to-end cross-sectoral view to enable closer collaboration across actors.
  • The broader social sector (for example, NGOs/non-profits such as advocacy organizations, think tanks, and service providers), when brought into the partnership, can ensure solutions are delivering impact for all stakeholders, including women, children, indigenous communities, and those whose voices are less often heard.

More than 50 such 4P models within the climate and nature space have emerged in the last two decades, providing a sign of early progress in tackling some issues jointly. The Initiative 20x20 4P model has convened 150 partners and aims to change the dynamics of land degradation in Latin America and the Caribbean and advanced restoration across the region. The partnership has committed $2.5 billion of private capital to support government commitments to protect and restore more than 50 million hectares of land.3

In sub-Saharan Africa, the decade-old Power Africa describes itself as a US-government-led partnership that brings together political leaders, companies, and financial institutions to increase energy access and low-carbon economic growth in the region. In the last ten years, according to its website, Power Africa has supported 37.5 million new connections and has closed on 14,000 megawatts of clean energy projects.

The 4P model, while most often deployed in emerging economies, can also be effective in advanced economies. Breathe London, whose pilot was funded by the Clean Air Fund, aims to improve air quality in the city of London. Current partners listed on its website include Bloomberg Philanthropies, Clarity, the Mayor of London, and the Social Innovation Partnership. The work from Breathe London and other cities will be expanded on through Breathe Cities, an initiative between Bloomberg Philanthropies, C40 Cities, and the Clean Air Fund to improve air quality across cities globally.4

For all their successes, the examples to date also bring to light the challenges of properly defining and executing such partnerships. Among the issues are the time and resources inherent in bringing multiple stakeholders to the table. By design, 4P models require multiple actors to come together simultaneously with aligned interests and a willingness to roll up their sleeves to act and experiment with novel approaches. Many 4P models have taken years to get off the ground or found it hard to maintain both funding and action momentum over the many years it can take to seed 4P model action and see its fruits. These challenges highlight how 4P models are an effective mechanism only under the right conditions. In the face of the huge climate and nature issues that must be addressed in this decade, 4P partnerships can make important contributions but must be carefully targeted to where they are most critically required and best suited.

Materiality, suitability, and feasibility provide a framework for evaluating priority areas

Based on the findings of our analysis of 4P models, we propose a framework to evaluate the materiality, suitability, and feasibility of such partnership concepts (Exhibit 2). Materiality and suitability are assessed at the level of the solution focus area of a potential partnership, while feasibility is evaluated in the context of a particular partnership concept, considering the geography, scope, and other design choices the partnership would entail.

Our framework uses the criteria of materiality, suitability, and feasibility to evaluate model concepts for public–private–philanthropic partnerships.

Materiality: Significant impact and meaningful co-benefits

Prioritizing materiality ensures that any 4P models—which come with high transaction costs in terms of time, energy, and financial and human resources to form and run partnerships—are directed toward areas with the greatest need and potential for positive impact on people and planet. Our analysis suggests that the most critical dimension here is to choose solution focus areas that have the highest return on the action with meaningful co-benefits for resilience, livelihoods, and well-being (see Exhibit 3, which shows the opportunity level by country archetype and sector).

To maximize impact return relative to effort, 4P models would gain from focusing on the most significant climate and nature challenges in geographies with the lowest capacities to address them. Existing 4P models illustrate this prioritization, with 87 percent focused on emerging economies, which can be less able than advanced economies to deliver solutions independently. Our analysis also suggests that solution focus areas that spur progress on co-benefits—including climate adaptation, economic development, and health—in addition to mitigation could give rise to broader coalitions of stakeholders and be better received by local communities. About 40 percent of existing climate and nature-focused 4P models, for example, reference socioeconomic co-benefits in their mission statements, which reflects the growing interest of all three sets of stakeholders in finding solutions that address both people and climate and nature challenges.

Suitability: Matching needs to capabilities

The second part of our three-part framework is suitability. Focusing on suitability ensures that the time, energy, and resources invested in developing and scaling partnerships are well matched with the strengths of this form of collaboration and where the partners’ interests are aligned. Solution areas that are mostly likely to align commercial and impact interests across each partner’s interests are areas that have been proven but are still building toward positive tipping points of adoption and scale. Such solution areas constitute the most common examples of 4P models. More than 90 percent of reviewed 4P models focused on rolling out established—but not necessarily commercially viable—technologies, rather than on innovating (Exhibits 4 and 5). These partnerships (81 percent of the models reviewed) mainly seek to address challenges by unlocking investment, supporting the creation of new markets, or both.

Additional proxies for suitability include the capacity and potential to scale and replicate across multiple sectors and geographies. Seventy-one percent of 4P models either have evolved or aimed at the outset to have a multinational focus, enabling the spread of successful models and learnings from one geographic context to others (Exhibit 6).

About 25 percent of material solution focus areas close to positive tipping are primed for the public–private–philanthropic partnership model. (1 of 4)
About 25 percent of material solution focus areas close to positive tipping are primed for the public–private–philanthropic partnership model. (2 of 4)
About 25 percent of material solution focus areas close to positive tipping are primed for the public–private–philanthropic partnership model. (3 of 4)
About 25 percent of material solution focus areas close to positive tipping are primed for the public–private–philanthropic partnership model. (4 of 4)

Feasibility: Anchor partner, resources, and alignment

The third part of the framework is feasibility. Once materiality and suitability have been established around the 4P model’s intended ambition, the feasibility layer of the framework starts to evaluate whether the model in consideration is set up for success. Three high-level dimensions of feasibility are most critical: first, the presence of at least one anchor partner who is willing to put real time and resources into forming and driving the partnership; second, alignment of the capital, governance, and resources provided by the partners with the scale of solution(s) in focus; and third, formal alignment across all participants on what constitutes success, including acceptance of associated risk, return, and impact. Put simply, these criteria bring into view whether the 4P model will have adequate runway and momentum—and whether it is rightsized to its ambitions.

On the first question of anchor stakeholders, our analysis suggests that at least one motivated actor is needed to put 4P models together and/or drive action. Philanthropic actors play this anchor role frequently but not exclusively. The anchor must be willing to experiment with approaches and models beyond what they have historically attempted. For example, the Drive Electric Campaign emerged from ClimateWorks Foundation’s work in transportation. It made significant investment to convene key stakeholders, which ultimately led to the formalization of the campaign with a broader coalition of philanthropic partners.5 In the case of larger 4P models, a social-sector actor or jointly established operating body drives action by leveraging funding from the public, private, and/or philanthropic sector either at the outset or soon following the partnerships’ establishment. Often, the anchor is a philanthropic actor, but there are examples of the private sector taking this role. For example, BlackRock is the anchor in the Climate Finance Partnership (CFP), which aims to accelerate the flow of capital into climate-related investments in emerging markets.6

Second, partnerships need to ensure that the scale of capital and efforts matches the scale of impact and solutions at hand. A smaller-scale 4P model may be better suited to address a single challenge in a specific market. For example, the Seychelles Conservation and Climate Adaptation Trust, a fund created from a debt-for-nature swap in the Seychelles, says that it supports ocean conservation and adaptation through the disbursement of typically less than $1 million in annual grants. That initiative operates at a much smaller scale than, for example, Initiative 20x20, which seeks to restore 50 million hectares of land in Latin America and the Caribbean by 2030 and has more than 85 partners that represent more than $3 billion in private investment.7

The third dimension, that of alignment, underscores the need to align on a joint definition of success at the outset and prepare for the risk, return, and impact implications for each actor. In the case of scaling or managing larger 4P models that feature multiple partners with varying objectives and tolerances, flexible participation structures can help address potential misalignment. For example, the Food and Land Use Coalition has established multiple core partnership platforms but also notes on its website that it welcomes affiliate platforms to encourage a diversity of collaborators and participants.

Out of 134 solution focus areas analyzed, 31 are primed for impact through 4P models

The systematic approach we use analyzed 134 solution focus areas and identified 31 of these as primed for impact through 4P models. Our analysis covers climate change mitigation, biodiversity loss, forest cover loss, and freshwater consumption—four planetary boundaries for which sufficient data for quantitative comparisons exists.8Nature in the balance: What companies can do to restore natural capital,” December 5, 2022; Richardson et al., "Earth beyond six of nine planetary boundaries," September 2023. Through a review of six country archetypes (which we defined) and 18 industries in six economic sectors, we identified 29 hot spots that met the materiality indicator of featuring high-need areas with low capacity to meet these challenges and significant socioeconomic co-benefits.

Within these 29 hot spots, we identified and evaluated 134 potential solution sets for suitability with 4P models. These included 102 climate solution focus areas and 32 nature solution focus areas. Of these, 31 solution sets were found to have high potential at a global level, primarily in the power sector, agriculture and forestry sector, and land conservation space.

Collectively, these solution focus areas could have a substantive impact. We estimate that these 31 areas globally account for about 30 percent of global emissions and 30 percent of total land area.

Successful 4P models require careful implementation, applying lessons learned from experience

Looking across the range and variety of 4P models already in operation today, we identify five key lessons among others.

First, it is important to establish an anchor stakeholder and robust governance. Forming novel 4P models in high-need geographies and systems will require an anchor partner who can take a long-term view and provide some of the start-up capital and runway to the multiyear process of getting a 4P model off the ground and into action through a strong central secretariat and a set of robust operational procedures.

Second, it is judicious to seize the moment and momentum of change. Specific strategy and results frameworks for 4P models are not well established, given the nascency of the model itself, but broader best practice entails creating a two-pronged strategic model. One prong is a shorter-term opportunistic strategy that takes advantage of moments when political will and funding momentum come together. The other is a long-game strategy for building the infrastructure, enabling conditions, and behavioral shifts required to support lasting change.

Third, 4P models can benefit from building on a preexisting base. Refining, expanding, or scaling existing 4P models to meet emerging strategic priorities may be more effective than starting from scratch. They also may be more conducive to harnessing smaller pockets of funding from new sources such as family offices, corporate foundations, city and regional governments, and small and medium-size enterprises.

Fourth, it is valuable to build a wide tent. For access to a wider pool of funding and channels of impact, 4P models should consider and communicate the potential of climate and nature solutions to address other sustainable development goals—for example, health, poverty reduction, and equity. This is not merely a matter of communication but also can affect both the what and the how of the partnership.

Finally, building first-of-their kind constructs requires significant resources, including capital and institutional capacity. Not all structures may be capable of scaling appropriately, so the right resources must be deployed to achieve impact. This lesson is particularly relevant for novel Just Energy Transition Partnerships (JETPs), which have attracted significant interest and capital aimed at transforming the globe toward low-carbon pathways while promoting an equitable transition for the people affected by this pathway. Thus far, JETPs have managed to enable the decommissioning of only a single plant responsible for 5 percent of the partnerships’ 2035 target.

By building on the most effective elements of public–private partnership models, leveraging the distinctive strengths of each actor, and incorporating broader knowledge of intergenerational and equity issues, we believe that 4Ps can indeed make a significant contribution to tackling some of the most pressing issues of our time.

Explore a career with us