Foreword Climate change is upon us, it is no longer a distant threat but a clear and present danger. Stresses on humankind and the planet's ecosystem are multiplying: the gap between climate action and financial resources is, unfortunately, increasing. In this scenario, impact investment holds a beacon of hope since along with ensuring socio-ecological gains, it generates profit. It is not just about doing the right thing; it is about making smart investments that pay off socially, environmentally, and economically. The Friedrich-Ebert-Stiftung(FES), India Office under its social-ecological transformative agenda collaborated with Second Nature Sustainable Solutions to develop knowledge and a coalition-of-the-willing to co-create systems change in impact investing. This coalition brings together enterprises working on-the-ground on integrated and economically sustainable projects for natural ecosystems and local community livelihoods, around 70 enterprises are on board: it aims to create a platform that links social enterprises and impact entrepreneurs with impact investors. Over centuries, ecosystems have supported people. Today, environment indicators reveal that ecosystem services are at the tipping point – the point of no-recovery. In addition, climate events are increasing, their impacts are more devastating. The answer may be found in nature-based solutions, at scale. Payments(profits) are guaranteed for environmentally sustainable practices – through cohesive community(social) action with decision-making(governance) embedded at all levels – that result in measured rehabilitation and preservation of ecosystems. The Payment for Ecosystem Services approach can play a catalytic role in attracting private sector capital at scale – a critical need today – for nature-based solutions since risk-return profiles are easily measurable and quite visible in this approach. But, the efficiency and effectiveness of current expenditure for scalable nature-based solutions has often been questioned. Payment for Ecosystem Services tend to be rather complex since continual environmental service delivery is critical in protecting ecosystems against short-term climate events and change, preserving ecosystems over time, and safeguarding provisioning service delivery, in long-term climate change or ecosystem collapse. The FES India–Second Nature partnership validated models of four agencies working on the ground, across India, and then developed this position paper for Payment for Ecosystem Services delivery that includes disaster risk reduction essentials. This position paper aims to provide knowledge andsupport to social enterprises that intend to become impact enterprises. It also intends to be a basis for access to private sector climate financing by conservation practitioners, since financial returns accrue to investors, to scale up socio-ecological impact across different ecosystems. FES would like to thank the authors, Ashish Mehta and Sarbjit Singh Sahota, for their in-depth research, expertise, and value-based assessment of the sector that contributed to the development of this position paper. We hope the paper will advance uptake of Payment for Ecosystem Services as an approach for addressing social-ecological transformation through impact investment as part of climate financing. Richard Kaniewski and Mandvi Kulshreshtha Friedrich-Ebert-Stiftung, New Delhi November 2023 III Payments for Ecosystem Services