Article by Corinne Martin (Programme Manager Centre for Sustainable Finance (CFS) University of Cambridge Institute for Sustainability Leadership)
The event – which took place online on 3 December – presented recent advances in assessing how nature-based solutions (NbS) reduce climate risks and deliver additional social and environmental co-benefits. Speakers highlighted results from the EU NATURANCE project, including a systematic literature review and meta-analysis that point to both strong emerging evidence and remaining gaps. A new object-based catastrophe model was introduced to quantify the role of NbS in reducing flood risk, using the 2021 European floods as a case study. The session also explored approaches for valuing NbS co-benefits and their relevance for insurers, noting that a lack of standardised, transparent methods can lead to underestimation of the full value of NbS.
Discussion following the presentation emphasised that insurers and policymakers face practical barriers, including short planning horizons and the “free rider effect,” which can limit investment in measures that reduce claims across the market. Examples from France and the UK showed how coordinated or mandatory contributions can help overcome these challenges. A societal cost–benefit analysis of four NbS scenarios in the Netherlands indicated that measures such as retention ponds can offer significant returns when jointly funded. Participants stressed the importance of improving long-term valuation approaches, recognising the immediate value of certain co-benefits, and further integrating NbS into catastrophe modelling—guidance on which is available in relevant NATURANCE outputs.
ClimateWise brings together the insurance industry into a member network convened by The University of Cambridge Centre for Sustainable Leadership, which integrates sustainable leadership with world-leading research capability to address the impacts of climate change.
ClimateWise’s Nature and Insurance Steering Group. Convened by CISL, this Group brings together insurance professionals engaged with nature-related issues. Meeting online several times a year, the group discusses and debates nature-related developments that are relevant to financial institutions, and provides input and feedback on ongoing projects like NATURANCE.