Adaptation10: Nature-based Solutions

Climate change is making seasonal transitions more volatile and more dangerous.

Moving from spring into summer, a heatwave may turn dense neighborhoods into health hazards. Heavy rains may follow, turning the same impervious streets into violent rivers, bringing damage and disruption in their wake. 

Then the heat could return, baking cities and countryside alike. The pressure then falls on food systems, water infrastructure, and power grids that local economies depend on. This ‘climate whiplash’ is increasingly the lived reality of millions across Europe, the US, Australia, and many other developed and developing countries. While the pumping of greenhouse gases into the atmosphere is intensifying the pattern, our resilience to it is being hollowed out by overdevelopment and the proliferation of artificial materials in the built environment.

Hence why a popular strain in climate adaptation concerns nature-based solutions (NbS). These are interventions that harness natural ecosystems to address climate and environmental challenges — leveraging their almost magical ability to resist, absorb, and buffer against extreme weather shocks and slow-onset climate events.

Their effectiveness as climate shields is scientifically well-established. The Intergovernmental Panel on Climate Change even calls out NbS as “low-regret measures for disaster risk reduction and climate change adaptation” for cities, citing as one example a study that found 96 million people across 70 cities in Latin America would benefit from improving main watersheds with green infrastructure.

Indeed, NbS may provide the most resilient infrastructure available to humankind. For example, a study on green roofs — those with soil and plants placed on top - in Kansas City found they could retain up to 29 inches of stormwater per year on average, preventing this from running off into storm drains and potentially overloading local sewer systems. Another study, of Hamburg’s green roof strategy, found they could hold back 50–90% of annual precipitation (and up to 30-40% of a heavy rainfall) alleviating pressure on urban drainage while improving cooling and comfort.

Coral reefs and mangroves, meanwhile, already provide coastal protection that can be valued in the billions of dollars. The Nature Conservancy and UC Santa Cruz used a financial industry-standard catastrophe risk model to quantify the flood reduction benefits of mangroves across Florida, and concluded that these natural bulwarks averted US$1.5bn in surge-related flood damages to properties in the wake of 2017’s Hurricane Irma.

What’s more, NbS don’t only bring adaptation benefits. Many also have the ability to suck carbon out of the air — helping with global greenhouse gas reduction efforts — while some also strengthen biodiversity and buttress valuable ecosystem services. The one-two-three punch provided by these solutions helps explain why development finance institutions like the Asian Development Bank are so keen to finance them.

Policymakers are recognizing the huge benefits NbS can bring, too, and legislating accordingly. Notably, the European Union passed a Nature Restoration Regulation in 2024, establishing strict targets for restoring degraded ecosystems — especially  those that can reduce the impact of natural disasters and absorb carbon. Member states are expected to submit National Restoration Plans by September 1 of this year, outlining how their efforts will improve and re-establish natural habitats, strengthen urban, agricultural, and marine ecosystems, and much more. 

Similarly, the UK has a Biodiversity Net Gain regulation, which compels land managers to create more biodiverse habitats than they disrupt and destroy. On the other side of the Atlantic, many US states have promoted investment plans or authored rules that support NbS. California even hosted its first Nature-based Solutions Summit in January of this year. 

However, while on paper the cost savings and economic upside that NbS promise should appeal to institutional and early-stage investors alike, the reality is more complicated.

There are challenges monetizing the wide array of benefits these solutions provide, in keeping with other forms of resilient infrastructure. Paying investors out of avoided losses is a non-starter — as avoided losses don’t produce cashflows. Biodiversity and resilience credits are gaining traction as alternatives, but both run into the structural barriers that have long frustrated carbon markets, plus complications of their own around how resilience effects are measured.

In the absence of dedicated financing mechanisms, the NbS providers gathering momentum right now appear to share a common trait: offerings that deliver value well beyond climate resilience. Green facades and climbing plants that improve building aesthetics while hardening structures against heat stress. Soil restoration products that lift crop yields even as growing conditions deteriorate. Coral reef restoration efforts that enhance tourism appeal while reinforcing natural coastal defenses.

The ten companies featured in this month's Adaptation10 exemplify this model — NbS businesses that can justify themselves on commercial grounds independent of their resilience benefits.

They fall across four dimensions: