Cross-sector, expert-led natural flood management (NFM) group recommends the formation of an NFM Research Fund to channel funding from the insurance sector into NFM projects across the country, while simultaneously building the evidence-base and commercial understanding within insurers.
Following the Financing Natural Flood Management report launched in March 2024, that highlighted the importance of building demand for nature-based flood risk outcomes within the private sector, the Green Finance Institute has today published a short paper focussing on the insurance sector as a potential buyer. The paper highlights some of the current challenges associated with the sector as a buyer of NFM outcomes, and recommends the formation of an insurance sector-led NFM Research Fund.
Designed with guidance from the insurance sector and wider industry, flood, nature, and finance experts, the proposed Fund would operate by pooling R&D funding from the sector to come in alongside other private and public sector buyers of NFM, helping projects bridge the funding gap and increasing the delivery of NFM in the landscape. Funded projects would instigate Monitoring, Reporting and Verification (MRV) programmes co-designed to build the evidence-base for the efficacy of NFM in reducing flood risk, and to increase the understanding of the commercial impacts of NFM within the insurance sector. This would act as a starting point for the exploration and development of future opportunities for the sector in NFM and in nature-based solutions more broadly going forward.
The NFM Research Fund
The NFM Research Fund pools capital from the insurance sector, to be deployed as non-repayable grants alongside other private sector NFM buyers, into NFM projects that are looking to bridge a funding gap.
This would marry the need of NFM project developers for a pool of funding that can purchase risk reduction, with the appetite of insurers to pay for greater evidence and commercial understanding of the impacts and benefits of NFM to the sector.
READ THE PAPER HERE
