As part of a broader work package on financing UK nature recovery, the Department for Environment, Food & Rural Affairs (Defra) commissioned the Green Finance Institute (GFI) to explore how private sector sources of finance could be unlocked to help facilitate the delivery of natural flood management at scale across England.

Since 1998, England has seen six of the ten wettest years on record with the winter of 2013/14 being the wettest winter for 250 years when over 13,000 properties were flooded. The Climate Change Committee has forecast that in a 2^oC warming scenario, there will be a 20% increase in heavy rainfall events by 2100 and Expected Annual Damages (EAD) from flooding could rise by up to 50% by the 2080s. To respond, natural flood management (NFM) interventions, such as reconnecting rivers to floodplains, woodland creation and urban green infrastructure, will be required alongside traditional infrastructure to help mitigate the effects of a changing climate.

Alongside addressing flood risk, natural flood management interventions also offers a host of other co-benefits for society. For example, wetland creation provides habitats for numerous bird, invertebrate and plant species, and woodland creation increases carbon sequestration. Urban green infrastructure focussed on flood alleviation can also provide increased public access to green space and can be a cost-effective means for meeting the Sustainable Development Goals in cities.

Despite growing interest in natural flood management, these projects currently attract a fraction of the total public funding available for flood risk management projects in England. With increased pressure on available public finances for flood risk reduction, the role of private finance in delivering NFM at scale is therefore of paramount importance if we are to adapt to climate change and reduce the risk of damages to people, property and infrastructure.