The paper was developed as a foundation for UNDP’s efforts to more rigorously address the poverty-environment nexus in response to the 2010 evaluation of UNDP Contribution to Environmental Management for Poverty Reduction: The Poverty-Environment Nexus as well as the recommendations of the Executive Board. The evaluation recommended that UNDP should learn from the lessons of the UNDP-UNEP Poverty-Environment Initiative (PEI) as it represents good practice and serves as a model of how UNDP (programmatically), in partnership with other UN agencies, can integrate poverty and environmental priorities at the country level. The paper synthesizes lessons learned from the PEI approach and its focus on the institutional framework for planning, budgeting and reporting through working with key coordinating ministries. The lessons show that although development contexts and institutional structures vary, there are certain principles that help make institutions more capable to drive change towards more socially and environmentally inclusive outcomes.