Green Growth and Private Sector Development: Stocktaking of DCED Experiences

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July 2014
Donor Committee for Enterprise Development (DCED)

A multitude of initiatives, networks and organisations have adopted the concept of ‘green growth’ in recent years, in particular following the 2012 Rio+20 Conference on Sustainable Development. New and innovative concepts and approaches to green growth have been designed and tested in the field. In this context, the Donor Committee for Enterprise Development (DCED), through its Green Growth Working Group (GGWG) decided to contract an external organisation to take stock of different members’ environmentally sound and climate friendly private sector development initiatives over the past three years. The objective of this stocktaking report is to provide insight into the main trends related to green private sector development, identify different approaches to green growth in PSD initiatives, and point out emerging lessons.

The private sector is the primary engine of economic growth in most countries, and will therefore have a critical role in promoting environmental sustainability. Donor agencies can also play a supporting role. Encouragingly, environmental considerations are included in an increasing number of donor interventions related to promoting economic growth. There is also a large and growing portfolio of private sector development (PSD) interventions that specifically aim to support the transition to a green economy.

Key approaches taken by DCED member agencies can broadly be distinguished into four categories. A large number of initiatives for green market and value chain development (or “creating green growth”) exist in tandem with targeted approaches focussing on improving the resource-efficiency and environmental practices in MSMEs or multinational corporations, (“greening growth”). Agencies typically also support these efforts with access to finance initiatives and reforms to public policy that take a green perspective.