Innovation Lab 1 - NATURANCE

Natural flood risk management

Investing in natural flood management in urban areas in the United Kingdom.

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Summary

This Innovation Lab explored how England’s Biodiversity Net Gain legislation (BNG) could unlock investment in natural flood risk management in urban areas. The Lab identified several priority areas to explore in more depth:

Research & Collaboration:

How can we foster interdisciplinary collaboration among urban planners, ecologists, engineers, insurers, financiers, property developers, and policymakers?
How can we develop comprehensive strategies that address multiple urban challenges simultaneously?

Policy Development:

How can we raise awareness of the opportunities to integrate BNG into broader urban development and flood risk management strategies?
How can we navigate barriers—such as zoning laws, building codes, and environmental impact assessments—so they include criteria that promote BNG and flood risk mitigation?

BNG Underwriting Solutions:

Can BNG act as a catalyst for new insurance and financial solutions?

Audiences

Environmental experts

Insurance professionals

NbS promoters and developers

Authorities

Outcomes

In collaboration with researchers, insurance professionals, and environmental experts, the Lab developed a business case showing how mandatory biodiversity requirements, such as England’s Biodiversity Net Gain legislation, can finance green infrastructure – for instance wetlands and parks – that provide both flood protection and facilitate wider ecosystem co-benefits. Key findings included:

Biodiversity Net Gain funding sources could be targeted at existing urban flood risk management plans and benefit from their established monitoring frameworks;

Biodiversity Net Gain legislation favours net gain to be achieved as close as possible to the development site. Finding ways to use this intent to incentivise green space would be a positive step forward;

The insurance sector can play an important role through the development of innovative insurance solutions that de-risk BNG investments, as well as protect biodiversity and its maintenance/restoration over time;

Care is needed to ensure that a focus on natural flood risk management does not come at the expense of biodiversity. The objective should be to enhance biodiversity while also achieving co-benefits, including natural flood management;

Guardrails are needed against technically permissible, but detrimental trade-offs.

Additional Materials

See “Harnessing England’s Biodiversity Net Gain legislation to amplify urban flood risk management” for further information on the Lab’s findings, available as both a blog post and full report.

Webinars organised for the Institution of Environmental Sciences and the London Climate Action Week: review how the Lab’s outcomes have been taken further and provide a foundation for ongoing discussion on natural flood management.

Environmental Defense Fund report “Nature for Insurance and Insurance for Nature“: highlights how findings from the Lab inform innovative solutions that link nature and insurance.

Policy and finance brief: Insights from the NATURANCE Innovation Labs.

Policy and finance brief: Assessing flood risk in the context of nature-based solutions.

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