Unlocking Financing for Future Peace: Building Bridges with the Private Sector

Today, global violent conflict is at record levels and rising, hampering many businesses that benefit from predictable environments for long-term planning and investment. The World Economic Report found that geoeconomic confrontation and state-based armed conflict are the top risks most likely to trigger a global crisis in 2026. Despite this, governments are dramatically reducing spending in programs that prevent conflict and build peace. U.S. foreign assistance levels fell a staggering 56.9 percent in 2025, and official development assistance (ODA) by OECD Development Assistance Committee members decreased by 23.1 percent (World Economic Forum 2026). In the wake of cuts to both peacebuilding and countering violent extremism programs, ISIS is surging in mineral-rich Mozambique (Paton et al. 2025). In Colombia (Barber 2025), the cuts are now emboldening violent cartels to steer at-risk populations towards gang recruitment and participation in illicit economies (Pannell 2026).

To meet this moment and begin tackling conflict and instability, more robust engagement with the private sector is vital. Companies that adopt conflict-sensitive practices achieve better returns on investment by reducing operational disruptions, lowering security costs, and maintaining their social license to operate, ultimately resulting in more peaceful and stable regions. Fostering greater collaboration between the peacebuilding field and private-sector actors will require establishing a common language, a shared evidence base, and standards that enable scalable best practices, demonstrate a profitable return on investment, and result in the building of peace and security.

Peace Is Good for Business, but…

The case for linking peace and economic stability is clear. But for the private sector to engage with peacebuilding, investors first need to see how peace benefits their investment decisions, and there needs to be mutual trust. Violence costs the world economy an estimated $19.97 trillion annually,1 and countries that are more stable and peaceful have stronger economic indicators, including better economic output, more robust consumption, higher rates of foreign direct investment, increased trade, higher levels of new businesses, and lower risk premiums (Institute for Economics & Peace 2024).

Many in the peacebuilding field are reluctant to partner with the private sector because they fear that, when corporations expand their supply chains into resource-rich but unstable regions, they may exacerbate instability and conflict—and even profit from conflict (Bennett 2002). There are numerous examples where the private sector has fueled conflicts, used corporate social responsibility (CSR) labels to legitimize harmful operations, and leveraged community partnerships for reputation management (Alcadipani et al. 2020). However, the private sector cannot be ignored because they are vital for building an economic environment conducive to peace by providing pivotal private capital. Especially at a time of funding cuts, these resources are vital for post-conflict reconstruction and community development, enabling the peacebuilding sector to manage and mitigate conflict and break the dependency on foreign assistance. Peacebuilding organizations working with the private sector ensure that businesses better manage risk and do not contribute to conflict.

Needed Scalable Partnership

The Alliance for Peacebuilding’s (AfP) Building Peace Economies at Scale initiative is working to build bridges between peacebuilders and private sector actors with stakes in conflict-affected environments and issues (Alliance for Peacebuilding 2025). AfP is curating intentional spaces and bringing together peacebuilding organizations and practitioners with impact investors, development finance institutions, multilateral development banks, corporations, venture capitalists, and policymakers. The goal is to explore how we can reconcile the fears, languages, and cultures of peacebuilding and business communities to align for-profit investments with peace process outcomes.

In recent years, a growing field of “peace finance” has emerged to facilitate mutually reinforcing efforts between private capital investments and peacebuilding, and quantitative and qualitative data demonstrate how peacebuilding and private sector partnerships have worked in conflict-affected countries.

– One initiative, Finance for Peace (Finance for Peace N.d.), establishes a framework for peace-positive investment and peace bonds (Interpeace and SEB 2022), and advocates for blended finance vehicles that combine philanthropic and commercial capital (German Federal Foreign Office 2021). Finance for Peace and other initiatives are demonstrating how peace approaches can help private-sector actors manage risk and make more sustainable investments in conflict-affected areas.

– The African Development Bank (AfDB) is leading with its Strategy for Addressing Fragility and Building Resilience (2022-2026) and Private Sector Development Strategy to address conflict drivers, emphasizing conflict-sensitive recruitment and supply chain management and supporting localized investments in small and medium-sized enterprises in conflict-affected regions.

– In Colombia, the Footprints of Peace initiative (2011-2015) showed that leveraging the National Federation of Coffee Growers of Colombia brand allowed risk-taking that improved the supply chain and built community trust among former combatants, civil society, and coffee growers in conflict-affected areas, resulting in better social and economic outcomes at a critical time of militia demobilization (Peace Science Digest 2020).

While there are examples of private sector partnerships in conflict-affected countries, much more could be done to minimize the risk associated with working in these contexts. The U.S. International Development Finance Corporation (DFC), the U.S. Development Finance Institution (DFI) that bridges the gap between foreign aid and commercial investing, is driving economic development in emerging markets while supporting U.S. foreign policy and national security. These programs leverage private investment through political risk insurance, direct loans, equity investments, and loan guarantees to achieve concrete strategic and developmental goals. Unfortunately, the foreign assistance cuts in 2025 and the gutting of conflict-expertise staff in the U.S. government paused mandated conflict prevention and private sector investments under the bipartisan Global Fragility Act, which required the private sector to be included in the U.S. government’s conflict prevention and peacebuilding strategy in five priority countries and regions (Robinson 2025).

With funding for peacebuilding programs being drastically cut and the private sector facing mounting risks from rising conflict and instability in its operating and investment areas, it is critical to build stronger partnerships between these sectors and build better data and standards. While there is emerging quantitative and qualitative data to make the case for robustly integrating the peacebuilding and private sectors, we need more evidence from diverse geographies, industries, and investment contexts demonstrating how integrating peacebuilding approaches with private sector initiatives can yield specific returns or cost savings.

It is critical to create standardized frameworks that demonstrate and enable best practices to inform investment decisions globally at scale (Miklian et al. 2025). We need to strengthen our coalition of experts across finance, government, venture capital, impact investment, philanthropy, and civil society who can identify leverage points, shared interests, complementary strengths, and opportunities for collective action. To enable broader adoption of peace economy principles, we need to develop and disseminate standardized language, peace indicators, and metrics that can guide conflict-sensitive and peace-positive investments. At the same time, we need to strengthen peacebuilders’ financial literacy skills so we can embed peacebuilding principles into the private sector.

Works Cited

African Development Bank. 2024. Private Sector Development Strategy (PSDS) 2021–2025. African Development Bank Group. https://www.afdb.org/en/documents/private-sector-development-strategy-psds-2021-2025.

African Development Bank. 2022. Bank Group’s Strategy for Addressing Fragility and Building Resilience (2022–2026). Transition States Coordination Office. https://www.afdb.org/sites/default/files/documents/strategy-documents/en-afdb-fragility-strategy.pdf.

Alcadipani, Rafael, and Cíntia Rodrigues de Oliveira Medeiros. 2020. “When Corporations Cause Harm: A Critical View of Corporate Social Irresponsibility and Corporate Crimes.” Journal of Business Ethics 167 (2): 285–297. https://doi.org/10.1007/s10551-019-04157-0.

Alliance for Peacebuilding. 2025. “Building Peace Economies at Scale.” https://www.allianceforpeacebuilding.org/building-peace-economies-at-scale.

Barber, Harriet. 2025. “‘The Cartels and Clans Are Ecstatic’: How USAID Cuts Have Emboldened Colombia’s Narcos.” The Telegraph, June 10. https://www.telegraph.co.uk/global-health/terror-and-security/how-usaid-cuts-have-emboldened-colombias-drug-cartels/.

Bennett, Juliette. 2002. “Multinational Corporations, Social Responsibility and Conflict.” Journal of International Affairs 55 (2): 393–410.

Finance for Peace. N.d. Accessed August 20, 2026. https://financeforpeace.org/.

German Federal Foreign Office. 2021. Investing for Peace: Feasibility Study. https://investingforpeace.org/wp-content/uploads/gffo_feasibility_study_investing_for_peace.pdf.

Institute for Economics & Peace. 2024. Business and Peace Report 2024. https://www.economicsandpeace.org/wp-content/uploads/2024/04/BAP-2024-web.pdf.

Interpeace and SEB. 2022. Peace Bonds: Feasibility Study: Assessing the Potential of a New Asset Class That Can Lower Risk and Enhance Peace. https://investingforpeace.org/wp-content/uploads/Interpeace-Peace-Bonds-Feasibility-study.pdf.

Miklian, Jason, Mark van Dorp, and John Katsos. 2025. “Unlocking the Peace Premium: An Evidence-Based Review of the Potentials and Pitfalls of Private Sector Finance for Conflict Transformation.” LSE Ideas, December 16. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5922662.

Pannell, Alfie. 2026. “USAID Moves out, Gangs Move in: The Cost of Aid Cuts in Colombia.” Devex, February 25. https://www.devex.com/news/sponsored/usaid-moves-out-gangs-move-in-the-cost-of-aid-cuts-in-colombia-111895.

Paton Walsh, Nick, Natalie Wright, and Samuel Come. 2025. “In Mozambique, an ISIS Insurgency Is Newly Energized as US Cuts Impact Aid Programs.” CNN, November 25. https://www.cnn.com/2025/11/21/africa/mozambique-isis-insurgency-us-aid-cuts-intl-cmd.

Peace Science Digest. 2020. “Business Associations: What Contributes to a Successful Business-Peace Initiative?” War Prevention Initiative, March. https://warpreventioninitiative.org/peace-science-digest/business-associations-what-contributes-to-a-successful-business-peace-initiative/.

Robinson, Linda. 2025. “Global Fragility Act: A Model for Cost-Effective Foreign Assistance.” Council on Foreign Relations, June. https://www.cfr.org/articles/global-fragility-act-model-cost-effective-foreign-assistance.

U.S. International Development Finance Corporation. 2026. “About the DFC.” https://www.dfc.gov/.

U.S. International Development Finance Corporation. 2026. “Active Projects.” https://www.dfc.gov/what-we-do/active-projects.

World Economic Forum. 2026. “Global Risks Report 2026 Digest.” January 14. https://www.weforum.org/publications/global-risks-report-2026/digest/.