From Flood Risk to Societal Resilience: Why Nature, Communities and Finance Must Work Together

Why is flood risk now a strategic issue for financial institutions?

Olly Breen

Flood risk is both a financial and a societal resilience issue.

As flooding becomes more frequent and more severe, we’re seeing direct impacts across mortgages, insurance affordability, SME performance and local economies. Currently, 6.3 million properties in England are at risk of flooding – a figure that’s expected to rise to 8 million (25% of all properties) by 2050. This brings devastating impacts to lives and livelihoods: 40% of SMEs that face severe flooding are forced to close permanently, to give one example. These aren’t isolated effects; they’re building into something systemic.

For banks, the question isn’t whether climate risk matters anymore, it’s how early we act. The shift is from responding after events to investing upfront in solutions that reduce risk across whole catchments and communities.

Your research focuses on nature-based solutions. What makes them different from traditional flood defences?

Dr Martina Egedusevic

Traditional flood management has largely focused on protecting individual assets with ‘grey’ infrastructure – such as concrete flood defences. Nature-based solutions take a different approach by restoring natural systems such as wetlands, peatlands and floodplains to manage water across entire landscapes.

Our research shows these approaches can reduce flood peaks while delivering wider benefits for biodiversity, water quality, carbon storage and community wellbeing. However, they deliver the most meaningful resilience when implemented at catchment scale, supported by robust monitoring, collaboration and long-term governance.

What did the roundtable reveal about the biggest barriers to investment?

Olly Breen

The discussion made clear that the issue isn’t ambition. The biggest challenges are evidence, scale and coordination.

Investors need to see clearly how resilience interventions reduce financial risk, not just deliver environmental outcomes. translation of data into economic terms, consistent metrics and confidence that results will hold over time.

There’s also still a gap in how different parts of the system talk about this. Topics like finance, policy, science and communities aren’t always using the same language. Until that improves, it’s difficult to scale investment in a meaningful way.

What does 'investable resilience' actually look like?

Dr Martina Egedusevic

Investable resilience is about moving beyond isolated pilot projects to build portfolios of interventions that reduce risk at a system-wide scale, with measurable outcomes.

The workshop reinforced that resilience must be viewed through multiple lenses, including natural capital, physical infrastructure, financial health and community capability. Successful projects also require local ownership, community participation and governance models that continue long after initial funding ends.

Ultimately, resilience should be measured by its ability to reduce future losses while strengthening both ecosystems and communities.

The discussion frequently referred to systems thinking. Why is that so important?

Olly Breen

Flooding doesn’t stop at property boundaries, and neither should the response.

Traditional defences can protect individual assets, but they can also shift risk elsewhere. Nature-based solutions work differently because they slow, store and absorb water across whole catchments, reducing risk more broadly rather than moving it downstream.

One of the clearest takeaways from the roundtable was that resilience needs to be designed at the level of catchments and communities. That relies on coordination between land managers, local authorities, regulators, insurers, financial institutions and communities, all working towards the same outcomes.

So, what needs to happen next?

Dr Martina Egedusevic

There are three priorities.

First, develop consistent, decision-grade metrics that link resilience nature-based solutions interventions to financial outcomes.

Second, build stronger partnerships that enable projects to scale from local pilots to catchment-wide investment programmes.

Third, implement decision-grade monitoring and data through the programme lifecycle so investors can measure long-term performance with confidence.

Nature-based solutions already have a strong evidence base for environmental benefits. The next challenge is translating those benefits into the financial metrics that underpin investment decisions.

And where does Santander see its role?

Olly Breen

Santander UK’s role is to help connect the different parts of the system.

Banks can bring together researchers, policymakers, insurers, investors, delivery partners and communities to help build the evidence base and develop models that can scale.

The discussion at London Climate Action Week reinforced a simple point: if capital is going to flow, resilience needs to be measurable, investable and backed by credible delivery.

That means recognising nature and communities as part of core infrastructure, and enabling collaboration across sectors to deliver outcomes at scale.

The roundtable formed part of Santander's ongoing collaboration with the University of Exeter to explore how nature-based solutions can reduce flood risk, strengthen societal resilience and unlock greater private investment in climate adaptation. Drawing on research and cross-sector expertise, the discussion highlighted the importance of treating resilience as a connected system. It’s important to bring together nature, communities and finance to reduce risk and build a more resilient future.