Unlocking the Potential of Nature-Based Solutions
Snapshot
- Nature-based solutions (NbS) leverage the power of healthy ecosystems to address environmental challenges and offer opportunities to flow finance into nature conservation efforts.
- Despite their potential, NbS financing is currently not mature, and there is a significant funding gap.
- The insurance industry plays a crucial role in de-risking and scaling these solutions.
These insights were prepared in collaboration with the Institute for Sustainable Futures, University of Technology, Sydney.
Biodiversity loss is identified as one of the most severe threats to humanity, with wide-reaching impacts on the financial system and real economy. Nature-based solutions (NbS) are strategies that use healthy ecosystems to tackle environmental challenges such as biodiversity loss. Yet, there remains a significant funding gap in the resources required to leverage NbS to restore nature globally.
The insurance industry, including insurers, reinsurers, brokers, and suppliers, plays a crucial role in de-risking and scaling these solutions, by providing financial protection against potential losses, encouraging more capital to flow into NbS projects.
The integration of nature-positive insurance principles can help address nature-related dependencies, impacts, risks, and opportunities.
There are tangible nature underwriting opportunities, also. Parametric insurance for example, has been deployed across coastal environments to protect reefs and the local economies that depend on them. Project financing across coastal and flood zones are also examples of where nature positive underwriting can be a profitable business opportunity for insurers, while at the same time helping address coastal and flood risks.
In our latest insights, we explore the role of the insurance industry in unlocking the potential of NbS to address nature-related issues and managing risk to build resilience.
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