This workshop report describes how IIED’s Shaping Sustainable Markets (SSM) initiative is seeking to bridge research and practice in the design of pro-poor PES schemes. On 21st March 2014 over 100 practitioners, researchers, journalists and students from over 15 countries met to discuss innovations in equity for smallholder PES. This summary report aims to inform future research and practice for IIED, its partners and other PES stakeholders. It is divided into four parts: an introduction to the issues; understanding the challenges and drivers when designing inclusive PES systems; how to shift from a ‘supply-push’ to a ‘demand-pull’ approach to PES; and ways forward for research and practice. During the workshop, practical experiences from projects in Uganda, Mexico, Costa Rica, Indonesia and Bangladesh countries were presented. Each offered insights into how to design schemes that are inclusive of smallholders and deliver environmental benefits, asking:~• What are the challenges and drivers of an inclusive, pro-poor agenda?~• Which strategies and tools improve project design and generate better social outcomes?~• What channels are there for sustainable funding?