Natural Capital Market Integration Portrait: From Climate Finance To Insurance

Description

Money for green infrastructure already exists; the difficulty is that it sits in instruments designed for other purposes. This portrait maps the financing landscape that a Natural Assurance Scheme has to navigate, from climate finance through to the insurance sector, and shows which mechanisms are open to a project of this kind and on what conditions.

It covers the existing financing instruments, mechanisms and facilities that are opening streams for green infrastructure and risk reduction, the roles that different actors in the financial system can play, and the points at which an NBS proposition fails to fit the requirements of a given instrument. The mapping runs alongside an institutional analysis of the rules and mandates that govern each source.

The portrait is the reference map used by the business model work: the NAS canvas identifies what a scheme needs, and this document identifies where the money for it could come from.

Applications to decision making in the insurance sector

It sets out the specific ways in which the insurance and reinsurance sector can participate — as innovator, investor, reinsurer, partner in a public-private arrangement, or provider of risk data — and matches each to the instruments through which it could operate. For a carrier considering a first venture into natural capital, it identifies the entry point that requires the least change to its existing practice.

Added value of this modelling approach

It treats financing as a market structure rather than a funding shortage. Most NBS projects that fail to raise money are not rejected; they never fit an instrument's eligibility criteria in the first place, and the portrait is organised to show where that happens.

What decision can be improved with this modelling approach

Which financing route to pursue for a given scheme; what has to be demonstrated before an instrument will consider it; and which partner in the financial system should be approached for which part of the capital stack.