22 May 2025 (original LinkedIn date)

Original

LinkedIn version· 1,806 words

I make no claims to expertise on the topics of the UK water sector, the RAB framework and the current regulatory environment, but I’ve been scratching my head as to why progress, in the face of rapidly mounting adaptation and resilience challenges, has been so slow. First off, it strikes me that the UK water sector faces a pivotal moment, but will that be enough to drive action?

With Ofwat’s PR24 (2025–2030) proposing an unprecedented £88 billion in investments (of which I believe c.£10bn is dedicated towards ‘environmental projects’), not to mention escalating public frustration over 464,000 sewage spills in 2023, and mounting pressure to achieve net zero by 2030, water companies obviously have to navigate a complex landscape of financial, environmental, and societal demands.

The Regulated Asset Base (RAB) system, overseen by Ofwat, seems to have been designed to ensure financial stability for capital-intensive grey infrastructure (pipes, treatment plants, and reservoirs) by allowing companies to recover costs and earn returns (and pile on debt?). Yet, green infrastructure, such as wetlands, sustainable urban drainage systems (SuDS), and catchment management, seems to this uneducated observer to offer transformative potential for sustainability, cost efficiency, and public trust.

The challenge therefore must lie in aligning regulatory incentives to balance these approaches. Here, I propose three reforms to the RAB system to integrate green infrastructure effectively, drawing on industry trends and real-world examples, and issue a call to action for collaborative change. I recognise that there won’t be an overnite transformation, but maybe we can accelerate the journey?

1. Valuing green assets for RAB inclusion

Grey infrastructure, like Thames Water’s £4.2 billion Tideway Tunnel, dominates the RAB due to its high capital costs and long asset lives (30–100 years), ensuring predictable returns through Ofwat’s Weighted Average Cost of Capital (WACC) framework. In contrast, green infrastructure, such as wetlands creation or reforestation, delivers benefits like carbon sequestration, flood mitigation, and biodiversity enhancement, which are harder to quantify. This valuation gap appears to discourage investment in green solutions, despite their alignment with the Environment Act 2021 and public demand for sustainability, evident in social media posts rightly decrying sewage pollution.

Proposed reform: Ofwat could, and I believe should, help to develop standardised methodologies to monetise green infrastructure’s benefits for RAB inclusion. For instance:

• Carbon savings: value carbon sequestration using UK Emissions Trading Scheme prices (~£80/tonne CO2 in 2025).

• Flood mitigation: estimate avoided costs from flood damage (£/hectare for SuDS reducing runoff).

• Biodiversity: use Biodiversity Net Gain (BNG) units, mandated by the Environment Act, to assign monetary value.

• Water quality: quantify savings from reduced treatment costs, as seen in United Utilities’ Sustainable Catchment Management Programme (SCaMP), which lowers chemical use through moorland restoration.

Implementation: Ofwat could collaborate with the Environment Agency, Natural England, and water companies to establish these metrics, building on pilots like Wessex Water’s Somerset Catchment Market, where farmers and landowners deliver water quality improvements. Green assets meeting these standards would be added to the RAB with tailored depreciation schedules (e.g., 20–50 years for wetlands). The £2.7 billion Green Recovery program, which funded projects like storm overflow reduction, could provide grants to ease initial capital barriers.

Impact: For water companies, this reform unlocks returns on green investments, diversifying portfolios and reducing reliance on debt-heavy grey projects (e.g., Thames Water’s £18 billion debt in 2024). Regulators align with long-term policy goals, though they’ll need to build valuation expertise, but that is clearly within their wheelhouse. Consumers may see moderated bill increases if green infrastructure’s lower operational costs (OpEx) offset capital costs (CapEx), but transparency is key to justify RAB-driven bill hikes. Environmentally, this accelerates solutions that enhance river health and climate resilience, addressing public concerns about pollution.

Challenges and opportunities: Let’s be honest, quantifying non-financial benefits is complex and risks disputes during price reviews (e.g., PR24), otherwise we’d have already done it. However, leveraging existing frameworks like BNG and carbon pricing, and scaling successes like SCaMP, could position the sector as a sustainability leader, attracting sustainability-focused investors the world over.

2. Flexible incentives for long-term outcomes

My research digging tells me that Ofwat’s Outcome Delivery Incentives (ODIs) reward or penalise companies based on performance metrics like leakage or sewage spills within 5-year price control periods. This short-term focus appears to favour grey infrastructure, such as pipe upgrades, which deliver quick, measurable results, whereas green infrastructure, like SuDS or wetlands, often requires years to mature (wetlands may take 5–10 years to stabilise) risking ODI penalties if benefits aren’t immediate. This misalignment hinders investment in solutions critical for net zero and the 25 Year Environment Plan.

Proposed reform: Extend ODI timeframes to 10–15 years for environmental metrics, such as water quality improvements or biodiversity gains. Rolling assessments or interim milestones (e.g., wetland establishment by year 3, water quality improvement by year 8) could reward progress as projects mature. Ofwat could pilot this in PR24, building on the Green Recovery program’s success with companies like Severn Trent and South West Water.

Implementation: Ofwat would, of course, need to adjust its performance monitoring systems to track long-term outcomes, potentially using digital tools for real-time data collection (e.g., water quality sensors in catchments). Companies could propose long-term ODI metrics in PR24 business plans, aligning with catchment-level strategies like those trialed, seemingly successfully, by Yorkshire Water with SuDS.

Impact: Water companies would gain flexibility to invest in green infrastructure without short-term penalty risks, encouraging projects like reforestation or wetland restoration. Regulators can then align ODIs with long-term environmental goals, even though administrative costs may modestly rise. Consumers may face initial bill increases to fund green projects, but OpEx savings (e.g., reduced treatment costs) should stabilise costs over the longer term. Environmentally, this reform would drive progress on river health, carbon reduction, and flood resilience, addressing public anger over sewage spills.

Challenges and opportunities: Clearly long-term ODIs require robust data over extended periods, which will complicate oversight, but that needn’t be an insurmountable challenge. Highly leveraged companies like Thames Water may face cash flow challenges if rewards are deferred, and a separate solution might need to be found for them. However, this reform fosters innovation, as seen in Wessex Water’s catchment markets, and enhances public trust by prioritising sustainability.

3. Hybrid approaches for balanced solutions

It’s not realistic to expect a complete switch overnite. Grey infrastructure ensures immediate reliability (e.g., reducing leakage), while green infrastructure offers long-term sustainability and cost efficiencies. A hybrid approach that combines pipe upgrades with SuDS or treatment plants with wetlands could meet both regulatory targets and environmental goals, addressing the sector’s dual challenges of performance and public perception.

Proposed reform: Ofwat should therefore prioritise hybrid projects in PR24 business plans, offering RAB inclusion and grants for integrated grey-green solutions. Catchment-level planning, as trialed by Severn Trent’s tree planting alongside pipe upgrades, would optimise reasonable outcomes (and there’s good software out there to help with this). Ofwat’s £862 million draft funding for PR24 could support such initiatives, building on successes like Philadelphia’s Green City, Clean Waters programme.

Implementation: Companies could resubmit hybrid plans detailing how grey and green solutions complement each other (e.g., SuDS reducing runoff to support smaller pipes), and Ofwat could develop ODIs rewarding combined outcomes, such as reduced sewage spills (grey) and biodiversity gains (green). Public-private partnerships, as used in Philadelphia, could share costs and risks.

Impact: Water companies ought to benefit from more balanced portfolios, reducing debt risks (e.g., Thames Water’s 80%+ debt-to-RAB ratio) while meeting short- and long-term goals. Regulators could then streamline oversight by leveraging existing frameworks, though clear guidelines would still be needed. Consumers stand to gain from reliable services and sustainable outcomes, though bill impacts would require clear communication. Environmentally, hybrid approaches will enhance resilience against climate impacts like flooding.

Challenges and opportunities: Coordinating grey and green will require cross-disciplinary expertise, and scaling hybrids across large networks is undoubtedly complex. However, successes like Philadelphia’s program show scalability, and hybrids can attract diverse funding, including new investors, while rebuilding trust amid public criticism.

Drought

And what of today’s main focus, drought (despite a drop of rain last night)? To incentivize UK water companies to invest in green infrastructure for drought resilience within the Regulated Asset Base (RAB) system, it seems likely that we’ll need a standardised methodology that can quantify the benefits for RAB inclusion..

Proposed methodology: Here’s how we might quantify drought resilience benefits in monetary terms:

• Water retention: measure water stored (m³/year) by wetlands or reforestation, valued against reservoir costs (~£1–2 million/mega-litre/day).

• Treatment cost savings: calculate reduced chemical/energy use (e.g., 10–20% savings from United Utilities’ SCaMP), using market prices (~£0.20/kWh).

• Demand reduction: assess water demand avoided via SuDS, valued against desalination costs (~£1.5–2.5 million/mega-litre/day).

• Ecosystem resilience: monetise biodiversity gains using Biodiversity Net Gain units or similar (~£20,000–£50,000/unit).

• Climate co-benefits: value carbon sequestration (~£80/tonne CO2) and heat reduction benefits.

Implementation: Ofwat could collaborate with the Environment Agency to develop metrics, using hydrological and economic data. Pilot projects (e.g., Wessex Water’s catchment markets) can test valuations, with Green Recovery funding (£2.7 billion) supporting CapEx. Long-term monitoring (10–15 years) would then be able to verify the benefits.

Impacts: Surely only positive? This would encourage green investment, reduces debt reliance (e.g., Thames Water’s £18 billion debt), and enhances climate resilience. Being pragmatic, let’s recognise that challenges will include data variability and regulatory complexity, but opportunities abound to leverage existing frameworks (e.g., BNG) and rebuild public trust.

Overall this methodology supports RAB reforms, balancing grey and green infrastructure for a sustainable water sector.

Call to action: let’s collaborate for a sustainable future

It’s be no means impossible that someone else will have thought about this more deeply and more effectively before - I welcome any feedback. But surely the UK water sector should act now to balance grey and green infrastructure. With PR24 shaping the next five years and public pressure intensifying, I urge water companies, Ofwat, policymakers, and environmental stakeholders to:

• Co-develop valuation standards: partner to create robust metrics for green infrastructure’s benefits, ensuring RAB inclusion and investor confidence. Leverage BNG and carbon pricing to set a global standard.

• Pilot flexible ODIs: let’s grasp the proverbial nettle and test 10–15-year ODI timeframes in PR24, sharing learnings to scale green solutions across catchments.

• Scale hybrid projects: we can start by launching catchment-based pilots combining grey and green, using public-private partnerships to share costs and drive innovation.

• Engage communities: in the current climate of disinformation, there’s never been a better time to transparently communicate the value of green investments to rebuild trust, addressing concerns about bills and sewage spills.

By embracing these reforms, the UK’s water sector can lead in sustainable infrastructure, delivering reliable services, resilient ecosystems, and a healthier planet. Join the conversation - tell me what I’ve missed out or gotten wrong!

19 May 2025 (original LinkedIn date)

Original

LinkedIn version· 1,060 words

As the climate crisis deepens, so too does the realisation that our oceans, often treated as silent backdrops, are not only victims of global warming but also critical buffers against its worst effects. For the UK, an island nation with one of the largest marine zones in Europe, this is a moment of reckoning. Sir David Attenborough’s latest release, Ocean, has brought this firmly to our attention. Our economic security, food systems, and infrastructure are bound to the fate of marine ecosystems that are now under intensifying stress. The question is no longer whether we act, but how strategically we do so.

Rethinking climate risk: a marine perspective

Recent guidance from the Columbia Center on Sustainable Investment makes a critical point: to manage climate risk effectively, we need to distinguish clearly among planetary, economic, and financial risks. Marine degradation cuts across all three.

• Planetary risks include ocean acidification, warming seas, biodiversity collapse, and loss of carbon sinks like kelp forests and salt marshes;

• Economic risks emerge as fisheries, aquaculture, shipping, and coastal tourism face disruption from changing conditions, stricter regulations, and ecological instability; &,

• Financial risks include asset write-downs, liability from under-adaptation, and missed opportunities as natural capital becomes re-priced.

In the UK, many of these risks are converging. From declining shellfish populations and rising water temperatures to eroding coastlines and failing wastewater systems, the marine environment is sounding the alarm. The good news is that the solution space is rapidly expanding and investment is beginning to slowly follow.

A nature-positive marine economy

The marine economy, by some estimates already worth over £47 billion to the UK, presents a frontier for nature-aligned growth, but it won’t be unlocked by carbon markets alone. It will depend on recognising the ocean as infrastructure, on valuing biodiversity, and on supporting sectors that regenerate rather than deplete.

Three opportunity areas that come to mind are, I think, particularly compelling:

1. Regenerative aquaculture: farming with nature, not against it

Aquaculture is sometimes maligned for its environmental impact, but a new model is emerging—regenerative aquaculture—that actively improves ocean health. Projects like the Algapelago’s Blue Forest farm in North Devon cultivate kelp and mussels not just for food, but also for ecosystem restoration. A 116-hectare site, once complete, is projected to remove 283 tonnes of CO₂, 23 tonnes of nitrogen, and a tonne of phosphate each year, while boosting biodiversity and water clarity.

This model presents a triple win of sustainable protein production, measurable ecosystem services, and investable outcomes. Funding from the UK’s £4.6 million Sustainable Aquaculture Partnerships for Innovation programme is supporting projects that integrate biodiversity goals with commercial viability. Policy tools such as the Fisheries and Seafood Scheme are also helping improve the resilience of shore-based aquaculture and processing.

If designed right, regenerative aquaculture could become the flagship sector for marine-based nature finance in the UK, creating investable blue credits, reducing runoff into sensitive estuaries, and offering income diversification for coastal communities.

2. Blue carbon and coastal habitat restoration

While terrestrial carbon markets grow, the marine carbon opportunity, “blue carbon”, remains underutilised. Seagrasses, salt marshes and kelp forests store carbon at rates comparable to tropical forests, but restoration projects struggle to find consistent finance. Our understanding of true potential grows with each academic study publshed.

The UK can choose to close this gap by:

• Developing methodologies and legal frameworks for blue carbon credits;

• Embedding blue carbon opportunities into Environmental Land Management schemes or creating similar for the marine world; &,

• Leveraging the Crown Estate and Environment Agency as anchor investors in habitat restoration projects with measurable carbon and biodiversity returns.

In coastal areas at risk from flooding and erosion, this becomes a resilience strategy too. Restored salt marshes and oyster reefs don’t just store carbon, they also buffer coastlines, improve water quality, and support nursery grounds for fish.

3. Marine spatial planning as investable infrastructure

Marine spatial planning (MSP) determines where different activities, fishing, shipping, energy, and conservation, occur. At present, it’s largely treated as a regulatory exercise. But MSP has the potential to become a platform for investment in marine ecosystem outcomes. What if plans came with measurable performance targets, fish stock recovery, pollution reduction, habitat regeneration, and investors could fund the projects to deliver them?

This could create investable outcomes tied to:

• Sustainable fisheries management;

• Marine protected area performance;

• Regenerative aquaculture zoning and monitoring; &,

• Water quality improvement in estuaries and harbours.

Done well, MSP becomes the marine equivalent of a net-zero building code, shaping infrastructure investment around ecological thresholds.

Learning from global examples

Of course we’re not in this on our own. Internationally, the UK can draw inspiration from:

• Belize Blue Bonds: linking debt relief to marine conservation outcomes;

• Colombia’s Vida Manglar project: funding mangrove restoration through blue carbon credits; &,

• Mexico’s coral reef insurance scheme: payouts tied to reef health and storm damage mitigation.

Yet the UK is not starting from scratch. Efforts in the Solent to restore oyster reefs, in Sussex to protect kelp beds, and in Scotland to pilot regenerative aquaculture all provide early proof points. What’s needed is scale, standardisation, and integration with national climate and biodiversity strategies.

The case for investment

If the UK is serious about leading in green finance, its strategy must extend to blue. We need to move at pace from framework develop to deployment of capital. This means:

• Embedding marine ecosystem risk in climate disclosure and corporate strategy;

• Treating restored marine systems as public infrastructure, capable of receiving public investment and insurance;

• Creating investment pathways, from bonds to credit markets, for marine NbS and sustainable aquaculture; &,

• Empowering coastal communities and SMEs to co-develop solutions, share in benefits, and steward local ecosystems.

Conclusion: a sea change in thinking

The climate crisis cannot be solved without the ocean, and the UK’s economic resilience cannot be secured without restoring the ecosystems that buffer its coasts, sustain its fisheries, and regulate its climate.

Marine ecosystems are not background scenery, rather they are frontline infrastructure. They store carbon, clean water, and protect communities. They are degraded, but not beyond recovery.

With regenerative aquaculture, blue carbon, and marine spatial finance, the UK can define a new era of marine investment—one that treats nature not just as something to protect, but as something to partner with.

The tide is turning. The question now is whether the UK chooses to lead it.

14 May 2025 (original LinkedIn date)

Original

LinkedIn version· 1,269 words

As climate impacts intensify, businesses across the UK are waking up to a new reality: resilience is no longer a sideline concern. It is fast becoming a defining feature of economic success. But for many, the scale and nature of the threat remains poorly understood. Climate change is not a distant environmental challenge; it is a present, systemic force reshaping markets, undermining productivity, and exposing the fragility of assets, operations, and supply chains.

Are businesses underestimating climate risk?

The UK’s climate is already changing. Annual temperatures are rising, heavy rainfall is becoming more intense, and drought conditions (expected this summer) are emerging with greater frequency. Yet business and investor responses remain partial and slow. Risk assessments still often rely on historical data, ignoring the acceleration and non-linearity of future threats. Heatwaves are no longer rare. In 2022, the UK recorded its first 40°C day. Yet most workplace health and safety guidance still assumes such temperatures are extreme outliers.

Meanwhile, many companies are failing to factor physical climate risks into long-term decisions. Property portfolios may face rapid devaluation as flood risk increases. Agricultural yields are being hit by erratic rainfall and soil degradation. Water-intensive sectors, from food & drink to manufacturing, are operating in catchments where water stress is now a material constraint. Across the board, climate-related disruptions are rising, but disclosure and preparation are not keeping pace.

The rising tide: heat, flood and drought risks

Of the many climate-related risks, three are especially acute for the UK business environment: heat, flood, and drought.

• Heat affects both infrastructure and people. Overheating buildings compromise indoor air quality and reduce productivity. In manual and outdoor labour, heat stress poses direct health risks, especially for workers in construction, logistics, agriculture and public services. Yet most businesses have no heat resilience strategy, no dynamic working policies, and little awareness of how heat might affect absenteeism, insurance, or operating hours.

• Flooding is becoming more frequent and less predictable. Surface water and fluvial flooding already cost the UK billions annually, and damage to commercial premises, transport, and energy infrastructure has cascading economic impacts. As storm systems intensify, critical national infrastructure - particularly in coastal and riverine areas - is under threat.

• Drought and water scarcity are often overlooked in a country known for rain, but the evidence is mounting. By 2050, the UK could face water supply shortfalls of over 4 billion litres per day. For industries reliant on clean water, such as breweries, food processors, tech manufacturers, this is an existential risk. Moreover, as rivers shrink and temperatures rise, water quality deteriorates, threatening not just human health but ecosystems, fisheries, and tourism.

Nature-based solutions: a scalable defence and opportunity

One of the most powerful, yet underused, tools for managing these risks is nature itself. Nature-based solutions (NbS) offer a way to reduce climate vulnerability while delivering co-benefits for biodiversity, carbon sequestration, and wellbeing.

• To manage flood risk, restoring wetlands, reconnecting rivers to floodplains, and reforesting uplands slows runoff and stores water naturally. These systems not only protect downstream infrastructure but recharge aquifers and improve water quality.

• For drought resilience, restoring peatlands and woodlands helps retain moisture in the landscape, cool the air, and improve soil structure. In urban areas, green infrastructure like parks, swales, and green roofs helps moderate temperature and store stormwater.

• When it comes to heat resilience, trees and vegetation reduce the urban heat island effect, cool public spaces, and improve worker comfort. Studies show that shaded environments can lower ambient temperatures by several degrees, crucial as extreme heat events grow more frequent.

• On water quality, NbS like buffer strips, constructed wetlands, and catchment-scale restoration trap sediments, filter pollutants, and reduce agricultural runoff, making them a cost-effective alternative to grey infrastructure.

These are not speculative ideas. They are proven, cost-effective, and increasingly investable. Yet they are often underfunded, undervalued, and disconnected from mainstream infrastructure planning.

Adaptation as opportunity: new markets, new business models

If climate resilience is a challenge, it is also a growth frontier. Around the world, demand is rising for adaptation services, resilient infrastructure, nature-based solutions, and climate intelligence tools. Businesses that can pivot toward these emerging markets will be well-positioned in the decades ahead.

Just looking at the UK alone, opportunities include:

• Resilient design and retrofitting: Heat-resilient buildings, green roofs, sustainable drainage systems, and passive cooling are in growing demand across public and private sectors.

• Water innovation: From leak detection and smart irrigation to water reuse and ecosystem-based purification, the technology and service ecosystem around water resilience is expanding fast.

• Climate analytics: High-resolution data and modelling tools, especially those integrating ecological vulnerability, are in demand from insurers, developers, local authorities and corporates.

• Nature-based infrastructure: There is growing interest from investors in green assets that deliver measurable flood protection, carbon storage, and biodiversity uplift. Markets for biodiversity net gain, carbon credits, and ecosystem services are nascent but growing. We can also secure our food system.

The UK’s moment to lead

The UK has the potential to become a global leader in climate adaptation - if it acts decisively. It already possesses world-class research institutions (like the Met Office, Oxford’s ECI, CISL, Exeter’s GSI, CEH and numerous others), a globally influential insurance sector, and emerging policy frameworks on biodiversity net gain and nature markets. What’s missing is scale, coordination, and consistent political support.

Leadership will require:

• Embedding NbS in national infrastructure strategies alongside grey engineering approaches, and recognising their long-term value through public procurement and planning reform.

• Stronger mandates and incentives for businesses to disclose and address physical climate risks, aligned with the Taskforce on Climate-related Financial Disclosures (TCFD) and the ISSB.

• Public investment and blended finance to unlock early-stage NbS projects and build a pipeline of investable natural assets.

• A workforce resilience strategy, integrating climate risk into occupational health, green skills training, and employment law.

• Regional climate and nature hubs, offering practical support to SMEs and local authorities to embed NbS and resilience planning into place-based economic development.

Protecting workers to protect productivity

Perhaps the most under-addressed aspect of business resilience is the workforce. Climate change is not an abstract backdrop - rather it directly affects the people whose labour sustains the economy. Heat stress, disrupted commutes, mental health strain from climate disasters, and increased absenteeism all degrade performance. But few firms have mapped these risks, let alone implemented strategies to mitigate them.

Leading organisations are beginning to act: adjusting shift patterns during hot weather, upgrading uniforms and PPE, investing in green infrastructure around workspaces, and training employees to understand and respond to climate hazards. But these examples are still rare. Protecting workers must become core to any serious adaptation strategy, not just out of duty, but because resilience and productivity go hand in hand. A caring employer also happens to be a successful employer!

Conclusion: from risk to resilience to regeneration

The climate crisis is not a future risk - it is a present force reshaping how we live, work, and do business. For UK firms, the choice is stark: wait for disruption or plan for resilience. The most forward-looking businesses will not only protect themselves, but unlock new growth by investing in the infrastructure, skills, and ecosystems that adaptation demands. Nature-based solutions should be central to this shift, not just for their climate value, but for the regenerative economy they make possible. The UK, with its capacity for innovation, regulation, and finance, has a unique opportunity to lead. But leadership will require a shift in mindset: from minimising harm to maximising resilience; from reacting to shaping; and from risk to regeneration. It’s all within our gift.

5 May 2025 (original LinkedIn date)

Original

LinkedIn version· 833 words

🌍 The roots of drought: climate, ecology, and human design

Droughts are symptoms of a deeper misalignment in our relationship with water. From a scientific standpoint, they’re driven by atmospheric patterns (like persistent high-pressure ridges), global warming, and land degradation. Yet they’re not just meteorological events - they’re ecological and social disruptions.

For example, in Flanders, 75% of wetlands have been lost in the last 60 years due to agriculture and urban development, reducing nature’s ability to store and slowly release water during dry times​. In England and Wales, even a moderate drought could cost billions annually in economic losses - impacting power generation, food production, and industrial supply chains​.

💧 What does water want?

Instead of asking how to control water, the question “What does water want?” invites us to understand water’s own rhythm. Water wants space to rest (wetlands), to travel slowly (meandering rivers), and to interact with life (soil, roots, and microorganisms). These slow phases were disrupted globally when 64–71% of wetlands were lost in the 20th century​.

🌱 Nature-based solutions (NBS): letting water lead

Nature-based solutions work with, not against, water. They’ve been shown to reduce drought impacts by restoring the natural hydrology of a place.

• Wetlands and floodplains: Act as sponges, recharging groundwater and storing water for dry periods. Wetland restoration has improved water retention and biodiversity across Europe​.

• Sponge cities: In China, cities use permeable pavements, green roofs, and urban wetlands to absorb and retain rainwater for future use​.

• Rewilding with beavers: In the U.S., beaver restoration has increased water storage and reduced wildfire risk by slowing water flow and raising water tables​.

• Indigenous practices: From bio-irrigation by Sahelian shrubs to communal water-sharing systems in the Andes, traditional knowledge often reflects deep hydrological wisdom​.

Yet implementation lags behind need. A recent review found very few large-scale drought-targeting NBS with rigorous evaluations of their effectiveness, especially in Europe​.

📉 Economic and health impacts: seeing the whole cycle

Droughts ripple across economies and societies. In the UK, they are linked not only to agricultural losses but also energy constraints, reduced water quality, and mental health burdens​. From respiratory illnesses driven by wildfire smoke and dust to injuries from dried-out rivers, drought’s impacts are often indirect and delayed​.

Economically, green and blue water shortages disrupt production differently. Green water (soil moisture) mainly impacts agriculture. Blue water (stored water) affects broader systems like industry and public supply​. These distinctions are critical for effective policy.

🌿 From control to reciprocity

A recurring theme is the failure of control-based systems. Dams and aqueducts often solve short-term scarcity at the cost of long-term resilience. Instead, multi-scalar, participatory approaches - like the Flemish “Blue Deal,” which includes farmers and industries in ecosystem restoration - are more effective and equitable​.

Indigenous frameworks remind us that water is not a commodity but a relative. Reciprocity, ceremony, and respect are foundational to many Indigenous water stewardship practices. Integrating these perspectives requires not just new technologies but a cultural shift in our understanding of value and responsibility.

🌀 Hope in the cycles

The hopeful message is this: droughts are not inevitable disasters. They are signals—telling us that we have altered the flow. And we can respond by restoring it. The science is clear, the stories are abundant, and the tools - natural and social - are available.

The journey begins not with dominating water, but with listening to it.

🌐 Web sources:

“Review of the Research and Scientific Understanding of Drought.” GOV.UK, Department for Environment, Food & Rural Affairs. https://www.gov.uk/government/publications/review-of-the-research-and-scientific-understanding-of-drought/review-of-the-research-and-scientific-understanding-of-drought-summary.

“Exploring the Science of Droughts.” Environment Agency Blog, 28 Nov. 2023. https://environmentagency.blog.gov.uk/2023/11/28/exploring-the-science-of-droughts/.

“Why Is Drought Such a Problem for the Economy?” Greenly, https://greenly.earth/en-gb/blog/ecology-news/why-is-drought-such-a-problem-for-the-economy.

“To the Last Drop: Europe’s Hidden Water Crisis.” Green European Journal, https://www.greeneuropeanjournal.eu/to-the-last-drop-europes-hidden-water-crisis/.

“Nature to Tackle Drought and Desertification.” IISD, International Institute for Sustainable Development, https://www.iisd.org/articles/deep-dive/nature-tackle-drought-desertification.

“Spring Drought Threatens Europe’s Farms and Rivers.” Politico Europe, https://www.politico.eu/article/spring-drought-threatens-europes-farms-and-rivers/.

📄 Reports and articles:

Freire-González, Jaume, et al. The Economic Impacts of Droughts: A Framework for Analysis. University of Oxford, Environmental Change Institute, 2016.

Gillingham, Emma L., et al. “Chapter 11: The Direct and Indirect Effects of Drought on Human Health in the UK.” Health Effects of Climate Change in the UK: 2023 Report, UK Health Security Agency, 2023. https://www.gov.uk/government/publications/adverse-weather-and-health-plan.

Hessel, Michael. Investing in Food – A Changing Climate: Adaptation Solutions Across the Food Supply Chain. Absolute Strategy Research, 4 Oct. 2024.

Jenkins, Katie, et al. “An Integrated Framework for Risk-Based Analysis of Economic Impacts of Drought and Water Scarcity in England and Wales.” Water Resources Research, vol. 57, 2021, https://doi.org/10.1029/2020WR027715.

Kapnick, Sarah. Building Resilience Through Climate Adaptation. J.P. Morgan, 2023.

Penn, Michael. Investing in Water: How to Invest in Water Solutions and Hedge Physical Climate Risk. Absolute Strategy Research, 2 Aug. 2024.

Yimer, Estifanos Addisu, et al. “The Underexposed Nature-Based Solutions: A Critical State-of-the-Art Review on Drought Mitigation.” Journal of Environmental Management, vol. 352, 2024, https://doi.org/10.1016/j.jenvman.2023.119903.

11 Apr 2025 (original LinkedIn date)

Original

LinkedIn version· 1,441 words

Yesterday, I spoke about the urgent challenges facing our businesses and communities, not abstract threats looming in 2050 or distant targets, but material risks hitting us now. From extreme weather to failing soil health, these are interconnected crises that demand our attention today. Yet, alongside these challenges lie practical, scalable solutions - nature-based interventions that can restore resilience and deliver compelling returns. Let me begin with a powerful call to action from those at the heart of one of our most vital industries.

An open letter from the UK Food Industry

“We are writing as professionals within some of the UK’s biggest food producers, manufacturers, and retailers. Most of us have decades of experience and hold or have held senior professional roles across a range of functions in UK food businesses accounting for more than half of UK grocery sales. We are releasing this memo because we have reached a moment of threat to food security like none other that we have seen. Yield, quality, and predictability of supply from many of our most critical sourcing regions is not something we will be able to rely upon over the coming years. The data on degrading soil health, water scarcity, global heating, and extreme weather events back up what we are seeing from within the system: an interconnected set of crises. These crises will have a meaningful commercial impact on our businesses…”

This open letter, penned by senior leaders in the UK food and grocery sector, isn’t just a warning - it’s a giant wake-up call. These are the businesses (y)our pension funds rely on, and they’re sounding the alarm about cascading risks that threaten their viability. Food security is just one lens through which we see these challenges. Let’s unpack the broader picture and explore how we can turn risk into resilience.

The material risks we face today

Businesses and communities are grappling with both direct and transition risks that are already reshaping commerce. Direct risks include extreme weather, declining crop yields, and reduced productivity. Transition risks—such as technological disruption, climate litigation, and shifting policies—are equally disruptive. The common thread? Nature, or rather, our complete failure to value it.

Consider flooding, a stark example of a direct risk. The Environment Agency’s latest flood models, as detailed in a March 2025 Public First report, estimate that 4.6 million properties in England are at risk from groundwater flooding—rainfall that falls faster than the ground can absorb. This is distinct from river or tidal flooding and has surged by 43% year-on-year. By mid-century, one in four properties in England could face flood risk, up from one in six today. In 2025 alone, storms like Bert and Darragh evacuated communities, disrupted transport, and caused millions in damages. The report notes that flooding costs the UK £2.4 billion annually in property and infrastructure damage, projected to rise to £3.6 billion by 2050 without intervention. Beyond immediate costs, flooding disrupts workplaces for an average of 10 days per event, leading to £290 million in lost output yearly, and exerts a decade-long economic drag worth £6.1 billion, reducing employment by 46,000 jobs.

But it’s not just wet weather. Extreme weather has two tails. Drought is equally punishing. In March 2025, the Rhine River—a critical European trade artery—hit record seasonal lows, halving shipping capacities and inflating freight costs. Meanwhile, wildfires rage in my native Scotland, a highly unusual occurrence at the best of times, let alone for mid-April. These events underscore a unifying issue: water, the lifeblood of our planet, is out of balance.

Soil, too, is in crisis. The Public First report highlights public concern over poorly maintained drainage systems, which exacerbate flooding when water can’t penetrate concrete-heavy landscapes. Yet healthy soil is a natural sponge. A 1% increase in organic matter across a single acre can boost water retention by 20,000 gallons. Soil stores 10 billion tonnes of carbon in the UK alone—equivalent to a year of global emissions—and hosts over 25% of Earth’s biodiversity in a single teaspoon. Globally, it provides $75 trillion in ecosystem services annually. Yet, we lose topsoil 40 times faster than nature can replenish it, with 30 football pitches vanishing every minute. Since 95% of our food depends on healthy soil, this degradation threatens not just agriculture but the entire economic food chain.

The economic blind spot: undervaluing nature

The issue isn’t that we don’t value nature - it’s that our economic system assigns it a zero value. According to the S&P Global CERAWeek insights from March 2025, physical risks like storms, floods, and droughts are already disrupting supply chains and operations across sectors. Their analysis of 2,800 companies found that 34% of global corporate revenue faces high physical risk exposure, with 90% of firms dependent on water-intensive supply chains vulnerable to disruption. Apparently half of global GDP, around $44 trillion, is moderately or highly dependent on nature, per the World Economic Forum - I think it’s more like 100%. The Public First report echoes this, as does work from the GFI and Oxford and Reading universities, warning that unaddressed environmental risks could slash UK GDP by 12%—worse than the 11% drop during COVID or the 6% hit from the 2008 financial crisis. Unlike those crises, recovery from nature’s decline is likely to be far slower.

Marine capital has collapsed by 45% per person over the past 25 years, and renewable natural capital - like forests and fisheries - has also declined 22%. These aren’t abstract losses. They manifest as higher costs, supply chain bottlenecks, and reduced resilience. The food industry’s open letter points to soil degradation and water scarcity as immediate threats to supply predictability. When the Rhine’s low levels disrupt shipping, or when floods close UK motorways like the M5, businesses feel the pinch today, not in 2050.

Nature-based solutions offer a practical path forward

The good news? We have solutions at hand - nature-based solutions (NBS) that can restore resilience and deliver economic benefits. Planting trees, restoring peatlands, or “rewiggling” rivers to slow and hold water flow can mitigate flooding, enhance soil health, and sequester carbon. The Public First report underscores their value: every £1 invested in flood defences prevents £8 in damages, with £3 of that directly saving public infrastructure like roads and hospitals. Maintenance is even more efficient; every £1 spent on upkeep saves £7 in new defences required. The Leeds Flood Alleviation Scheme, completed in 2024, protects 4,000 homes and 1,000 businesses, unlocking £774 million in economic growth and 3,000 new jobs by blending structural and natural flood management.

Nature isn’t just a fix - it’s business-critical infrastructure. Unlike grey infrastructure, which depreciates, green infrastructure appreciates over time. Restored wetlands filter water, reducing treatment costs. Healthy soils boost crop yields, stabilising food supply chains. The S&P Global Sustainable1 report highlights that companies like Nestlé are integrating water stewardship into operations, cutting risks and costs. A UK study cited in the Public First report suggests that mandating Sustainable Urban Drainage Systems (SuDS) for new housing could curb flood risks from unchecked development- over 7,000 new homes are approved on floodplains, fuelling public skepticism about housing plans.

Scaling NBS requires investment, but the returns are compelling. A 2% allocation of capital to nature as an asset class from pensions like yours and mine could unlock £100 billion in the UK, fostering portfolios of projects that deliver environmental, social, and financial gains. This isn’t about ESG optics. It’s about resilience. The Public First report recommends a minimum of £1.5 billion annually for flood risk management, up from £1.3 billion, to maintain assets and deploy new solutions. Devolving funds to local authorities and tracking resilience via the National Infrastructure and Service Transformation Authority (NISTA) could ensure impact.

A transition to resilience

This won’t happen overnight. It’s a transition journey, but one we can start today. The Public First report reveals that 66% of UK adults doubt the country’s preparedness for flooding, and 68% expect central government to lead. Sadly in my flood rescue work, I’ve seen the sharp end of that, and it’s not pretty. It’s more than just sad for those on the receiving end, it’s devastating. Businesses, too, must act—integrating nature into risk models as S&P Global Sustainable1 urges, where only 10% of firms currently link physical risks to financial impacts. The food industry’s letter shows leaders ready to confront these truths. By valuing nature as critical infrastructure, we can protect communities, stabilise commerce, and build an economy that thrives through resilience, not in spite of it.

The risks are here now - flooded homes, disrupted supply chains, degraded soils. But so are the solutions. Let’s invest in nature, not just to save it, but to save ourselves.

7 Nov 2024 (original LinkedIn date)

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My trip to South America didn’t finish with the end of negotiations At CBD COP16 in Cali. Inspired by the travels of naturalist and polymath Alexander von Humboldt, I took the opportunity to head south to Ecuador to fulfil a lifelong dream of climbing volcanoes in Ecuador.

Big chunks of Ecuador are currently tricksy to visit - the FCDO in fact advises against all but essential travel for nearly half the country, and travel insurance can be invalidated on the way to the Galapagos Islands if you stay more than one night in Guayaquil, for example. But the exploration undertaken by von Humboldt and his companions couldn’t have been much easier some 200+ years ago.

His journey through New Granada (as Colombia and Ecuador were then known as part of the Spanish Empire) revealed to von Humboldt the concept of Naturgemalde, the interconnectedness of all nature.

Still today, Ecuador remains rich in biodiversity of all kinds, from Amazonian tropical rainforest, through the aforementioned Galapagos Islands that so inspired Darwin, to the breathtaking Avenue of the Volcanoes, a majestic stretch along the Andes with towering volcanoes and the rich biodiversity of the paramo.

It is easy to see today what inspired von Humboldt all those years ago!

We began our acclimatisation, with a gentle trek up Pasochoa at 4,200m. Although heavily impacted by human activity, mainly farming, the Páramo has the richest high-mountain flora in the world. It supports both the endangered spectacled bear and Andean mountain tapir, and other charismatic mammals found here include the Andean fox, mountain coati, long-tailed weasel, and guinea pig (not that we actually encountered any of these!).

From there we upped our exposure to higher altitude with a climb up Illiniza Norte at 5,248m, which sits majestically alongside its more technically difficult sister, Illiniza Sur. The former likely lost its glacier some 80-odd years ago, while the glacier on the latter has been in retreat for decades, not helped by nearby eruptions and ash clouds, in addition to global warming.

Following the dictum of ‘climb high, sleep low’ is critical to preparing the body for the thinner air at altitude, but no matter how much preparation, I always struggle trying to move at normal pace in the high mountains.

We moved on to our final goal, the mighty ‘Taita’ (father) Chimborazo (6,263m). In von Humboldt’s day (before formal surveys of the Himalayas and Karakoram had begun), Chimborazo was considered to be the highest mountain in the world, and arguably it still is! Much like carbon or biodiversity credits, it’s all about the baseline! Of course, from sea level, Mt Everest is the highest peak in the world, but because of the bulge of the planet around the equator, Chimborazo is highest measured from the centre of the earth.

For the mathematical proof, have a read here: https://www.mathscinotes.com/2015/01/the-farthest-mountaintops-from-the-center-of-the-earth/

It also means that it’s summit is the closest point to the stars (and 2,168m further from the centre of the earth than Mt Everest). The glacier, although in retreat, still offers some gems, with massive crevasses a risk to unaware climbers.

From there we travelled back to the capital Quito, but even there the mountains never really leave you - you can see Cayambe standing tall at 5,790m in the background of this shot taken in the Old Town.

Ecuador is a magical country, and I can now completely understand what inspired von Humboldt. I hope to return one day to have a crack at some more volcanoes.