Flooding Costs UK £2.2B a Year—Can Businesses Help Turn the Tide?

A new study commissioned by RSA Insurance and The Wildlife Trusts presents a strong economic case for businesses to invest in natural flood management. The research highlights that every £1 allocated to these solutions can yield up to £10 in long-term benefits over three decades. Given the increasing financial burden of flooding—costing the UK approximately £2.2 billion annually—private sector engagement in flood mitigation strategies is becoming both a necessity and an opportunity.

Economic and Environmental Advantages

Natural flood management (NFM) encompasses strategies such as wetland restoration, rewilding rivers, and the installation of leaky dams. Unlike traditional flood defense infrastructure, these approaches offer long-term financial returns while simultaneously supporting biodiversity and community wellbeing.

An analysis of ten NFM projects implemented by Wildlife Trusts across the UK found an average cost-benefit ratio of 4:1 over ten years, rising to 10:1 over a 30-year period. Case studies included:

• The expansion of wetlands and creation of attenuation ponds in Sheffield
• The use of retention pools and leaky dams in suburban Coventry
• Beaver-led wetland restoration in Devon, which has been shown to reduce peak flood flows by 30%

Beyond financial returns, these projects delivered measurable social benefits. Survey data revealed that 85% of local community members reported increased physical activity due to these initiatives, while 92% noted improved mental wellbeing and a stronger connection with nature—key factors for businesses considering corporate social responsibility (CSR) and employee engagement strategies.

Challenges to Private Sector Participation

Despite clear economic benefits, private investment in natural flood management remains low. One of the primary barriers is the absence of standardized frameworks for project design, monitoring, and valuation—factors that would enhance investor confidence and encourage wider adoption.

Public funding for NFM in England represents less than 1% of the total flood and coastal erosion risk management budget. This limited governmental prioritization creates uncertainty, making private sector engagement more challenging despite the evident advantages.

The Role of the Insurance Sector

The insurance industry is particularly well-positioned to drive adoption of nature-based flood solutions. Given insurers’ extensive experience with the financial impacts of extreme weather events, supporting preventative measures aligns with both risk reduction and long-term resilience strategies.

Ken Norgrove, CEO of UK & International at RSA Insurance, says that insurers can play a pivotal role by integrating NFM benefits into risk assessments and policy structures. Recognizing the economic value of these initiatives could incentivize businesses to incorporate them into their broader climate resilience strategies.

Steps for Businesses to Engage

For companies considering investment in NFM, the report outlines key actions:

• Advocate for standardized frameworks in project design and impact measurement to improve confidence in NFM investments.
• Align corporate sustainability goals with government-led initiatives on private finance for environmental resilience.
• Enhance internal data collection to better assess climate risks and the financial implications of nature-based solutions.

With one in six UK properties currently at risk of flooding, and climate change intensifying extreme weather patterns, the business case for natural flood management is increasingly compelling. As Kathryn Brown, Director of Climate Change and Evidence at The Wildlife Trusts, highlights, these strategies not only deliver economic value but also contribute to reversing nature decline—offering a dual benefit for forward-thinking businesses investing in sustainable resilience.