The global agri-food system is a major contributor to greenhouse gas emissions and poses a significant threat to biodiversity. Private sector impact investment to support and encourage farmers to combat climate change and protect nature is rapidly increasing alongside calls to repurpose public agricultural subsidies. Globally, support to agricultural producers currently accounts for almost USD 540 billion a year, with potential for a redirection of this new money to farmers and landowners through "Paying for Nature" schemes. However, developing effective, efficient, and inclusive reward mechanisms presents challenges, requiring focused investment in innovation and learning. Common issues include defining practical metrics for outcomes and ensuring fair payment structures for all stakeholders. Solving these challenges demands serious investment in innovation and collaboration with farmers, communities, and local governments. Based on a literature review, this paper presents a series of proposals on how to design instruments that will require strong investment in innovation in the design and implementation of reward and compliance mechanisms, working closely with farmers, communities, and local governments to develop practical and relevant solutions. Attention must be paid to fairness, social equity, and achieving multiple environmental outcomes, such as biodiversity protection and water pollution prevention, while maintaining agricultural productivity. Targeted and well-funded interventions are essential, especially to support vulnerable rural communities facing climate change and biodiversity loss.