Policy recommendations from the NATURANCE network

What are the risks and costs of climate inaction? At the Finance Innovation Festival, held in Brussels in February 2026, researchers, practitioners and policymakers discussed the role of finance and insurance in going beyond simple tools for reparation, becoming drivers for advancing and scaling climate resilience.

Blended approaches, mobilising both public and private capital, and standardised data are needed to successfully integrate risks and costs in current financial systems. To pave the way, the NATURANCE project, along with sister initiatives, has investigated the potential of Nature-based Solutions (NbS) investment and disaster risk financing for climate adaptation, resulting in a set of policy recommendations that were discussed during the NATURANCE Festival.

The session “Collective insights, lasting impact: Financing and insurance for NbS“ — including keynote interventions by Kirsten Dunlop (Climate KIC), Sirpa Pietikäinen (Member of the European Parliament), and Vanessa Bruynooghe (European Commission, EU Mission Adaptation), as well as presentations of legacy policy briefs from NATURANCE and sister projects Invest4Nature, SOTERIA, PIISA, ClimateFit — generated a coherent set of cross-cutting policy messages. While perspectives varied, a strong convergence emerged around the need for structural transformation in adaptation finance, risk governance, and NbS.

Key policy recommendations

1. Internalise the cost of inaction
   Financial regulators and supervisors (European Central Bank, European Banking Authority, European Insurance and Occupational Pensions Authority) can integrate climate and disaster risk into public budgeting, financial reporting, and insurance pricing to reflect the real economic cost of delayed adaptation. They can do so by encouraging or mandating that the economic “cost of inaction” is explicitly quantified and integrated into corporate balance sheets and credit risk assessments.
   
2. Scale beyond pilots
   National governments, municipalities and the insurance sector can all work to embed NbS and risk-transfer mechanisms into long-term, scalable regulatory and investment frameworks across the EU, national, and local levels. National governments can do so by expanding National Adaptation Plans into detailed National Adaptation Investment Strategies. Municipalities could issue sub-sovereign green bonds dedicated to NbS. And the insurance sector could look into models like designing standardized reinsurance products specifically to underwrite the restoration of natural ecosystems.
   
3. Align insurance with resilience objectives
   EU regulators, national governments and the insurance sector can use underwriting incentives, performance-based coverage, regulatory frameworks, and landscape-level mechanisms to link insurance markets with preventive risk reduction and NbS implementation. EU regulators could harmonize the recognition of parametric insurance across all EU member states, while national governments and the insurance sector could agree on a 0.1% levy on premiums to fund resilience-building efforts.
   
4. Strengthen data infrastructure
   The EU Commission and national governments can establish secure, standardised EU-wide systems for sharing hazard, exposure, and loss data, and improve integration between climate, financial, and insurance datasets. Both EU and National legislation could make the sharing of impact and damage data compulsory (utilizing the same logic applied to weather forecasting data). Member states could scale public data platforms, encouraging insurance companies to share anonymized, granular claims data with local planning authorities.
   
5. Unlock private capital through regulatory certainty
   Reduce transaction costs, expand and refine the EU taxonomy for adaptation, and support blended finance approaches combining public and private resources. Specifically, the EU Commission should expand the EU taxonomy to classify adaptation-enabling activities and cover all types of acute events.
   
6. Ensure equity and affordability
   National governments can address climate insurance justice gaps through targeted subsidies, fiscal incentives, and mechanisms that protect vulnerable regions and households. Governments could phase out ad-hoc disaster relief and manage it through dedicated public funds. To ensure vulnerable populations are not excluded by risk-based pricing, governments should introduce direct, targeted subsidies (e.g., voucher systems for low-income households) to facilitate insurance access.
   
7. Promote coordinated governance and structural engagement
   When multiple actors from both the public and private sectors collaborate, coordinated governance is possible. It could result in supporting resilience taskforces, providing municipal financing tools (e.g. green bonds), and engaging cross-sector networks to clarify roles and sustain long-term collaboration. For example, municipalities could abandon siloed planning and engage financial institutions from the earliest phase of the adaptation project’s preparation. Authorities could formalize this with the establishment of a local task force (with the participation of municipalities and financial institutions) to define acceptable risk-return profiles before pursuing project funding.