Actors

Pay for performance contracts focus a diverse set of actors on the effective use of limited public and donor funds to create and sustain environmental outcomes. The components involved in pay for performance contracts are consistent across different strategies.

		Conservation Buyers Public agencies, nonprofits, or private organizations that spend money on habitat conservation and water quality with the intent of achieving defined environmental goals.

		Mitigation Buyers Entities that purchase environmental outcomes to offset impacts from development and satisfy regulatory requirements.

		Investors Private equity managers, investment bankers, commercial bankers, or foundation investment managers that finance habitat or water quality projects with the intent of achieving a financial or environmental return on investment.

		Producers Landowners, engineers, or environmental professionals who design and implement environmental improvement projects.

		Administrator An entity that manages a pay for performance strategy. The administrator’s role can include defining metrics for desired environmental outcomes, conducting monitoring and verification, structuring contracts and financing terms, and connecting conservation and mitigation buyers with producers. Third-parties can also fulfill these roles.

Components

		Environmental Outcomes Measurable units of environmental benefit, such as habitat created or pollutant reductions achieved, that serve as the basis for payment in pay for performance contracts.

		Contract Mechanisms Solicitations, such as requests for proposals, and contracts between buyers and producers that use environmental outcomes as terms for payment.

		Capital Financing for project implementation that is intended to be paid back once the producer receives payment from delivering environmental outcomes.

		Payment Money paid after environmental outcomes are achieved.

		Certified Credit A representation of the verified outcomes achieved, as defined in the pay for performance contract. Credits act as the conservation “currency” that can be bought or sold between producers and conservation or mitigation buyers.

Pay for Performance Toolkit

Actors

Conservation Buyers

Mitigation Buyers

Investors

Producers

Administrator

Components

Environmental Outcomes

Contract Mechanisms

Capital

Payment

Certified Credit