Investments aligned with this Strategic Goal aim to reduce flood risk and improve stormwater management using nature-based features to complement or substitute for conventional engineered infrastructure.

The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.


Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What problem does the investment aim to address? For the target stakeholders experiencing the problem, how important is this change?

Developed countries around the world have built gray infrastructure (such as pipes, pumps, and water-treatment plants) to protect communities from floods and to collect and transport stormwater (5). City surfaces are impermeable, and storms generate high volumes of runoff, which can lead to flooding and pollution (5). In systems with combined sewer and stormwater pipes, excess floodwaters can lead raw sewage to discharge into waterways (5).

Gray infrastructure systems are at increasing risk of failure as climate change occurs, with rising global temperatures leading to more severe drought and floods (5). Strategically combining green infrastructure and gray infrastructure can greatly reduce overall risk (5). Green infrastructure strategically preserves, enhances, or restores elements of a natural system (such as forests, agricultural land, floodplains, riparian areas, or coastal mangrove forests) in combination with gray infrastructure to offer more resilient services, often at a lower cost. Green infrastructure can slow and regulate the flow of water, allow rainfall to infiltrate into the ground, prevent stormwater from overwhelming pipe networks, and increase downstream water quality by improving the quality of stormwater through natural processes (27).

Investments aiming to reduce flood risk and stormwater impacts through green infrastructure can:

  • protect and expand wetlands and integrate nature-based solutions into flood control systems by restoring natural floodplains, flood bypasses, inland wetlands, stream beds, river banks, and upland forests, allowing natural ecosystems to slow, absorb, and retain storm runoff and thereby reducing flooding, land erosion, and landslides (3);
  • build green roofs, permeable pavement (such as porous concrete, asphalt, or interlocking pavers), bioretention areas (such as rain gardens and bioswales, which are vegetated trenches that receive rainwater runoff), open spaces (such as parks and greenways), or constructed wetlands to facilitate urban stormwater absorption and infiltration;
  • implement biophysical and economic modeling techniques to integrate green infrastructure assessments into typical project evaluations; and
  • supply technologies that collect data on ecosystem health, monitor trends in environmental degradation, and estimate natural disaster risk.

What is the scale of the problem?

Floods are the most frequent and damaging natural hazard to people and their livelihoods (24). Over the last 20 years, 90% of all disasters have been related to weather, of which flooding accounts for almost half (22). Larger and more frequent flooding can disrupt floodplain ecosystems by displacing aquatic life, impairing water quality, and increasing erosion (23). Nutrients, fertilizers, pesticides, debris, and volumes of sediment are transferred both to and from the floodplain, disrupting its balanced fertility (5).

Storms generate high quantities of runoff, caused in part by the impermeable surfaces covering urban areas (10). Runoff picks up nutrients, sediment, and pollutants, degrading waterways near the urban area (10). When vast flood and storm waters enter urban systems containing combined sewer and stormwater pipes, raw sewage can be discharged directly into waterways or back up into homes (5). All of this can threaten human health and safety and disrupt transport and business activities.

Around 30% of the global population resides in areas routinely impacted by either flood or drought events (27). On average, 5,900 lives are lost annually from river flooding, storms cause USD 46 billion in economic losses each year, and these numbers are expected to increase tenfold by 2030, according to the Global Facility for Disaster Reduction and Recovery (19). Floods cause an estimated USD 120 billion in annual urban property damage, about one-quarter of total global economic losses related to water insecurity (20).

The scale of modern disasters, including flooding, is linked to the movement of people from rural to urban areas, their settlement in vulnerable parts of cities, and the rising intensity and frequency of severe weather events (22). A 2°C increase in global temperature would increase the damage and impact of river flooding on human populations, by 170%, putting an estimated 1.6 billion people in 2050 at risk from flood, up from 1.2 billion today (19).


Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who (people, planet, or both) is helped through investments aligned with this Strategic Goal?

Terrestrial, freshwater, and marine ecosystems: Green infrastructure can benefit both people and the natural environment in ways besides reducing flooding risk (19). Restoring riverbanks and floodplains can improve downstream water quality and provide important habitats for fish and migratory birds (16). Improving vegetation cover (for example, through riparian buffers) provides habitats for diverse species, such as insects or birds, that can provide ecosystem services, such as pollination for agriculture (3).

Rural communities: Slowing flood waters in river basins can increase the deposits of nutrient-rich sediments that help to create fertile soils for agriculture, which often dominates rural economies (17). Green infrastructure can keep water on the landscape, both preventing destructive flooding in these communities and maintaining water availability for agricultural production.

Urban communities: Natural disasters disproportionately impact the urban poor, who often live in informal settlements in areas vulnerable to natural hazards, such as floods. Beyond helping control urban flooding and preventing stormwater pollution, urban green spaces increase property values by 5–15%, while wetlands create birdwatching and recreation opportunities (11). Green infrastructure can mitigate the urban heat island effect, cooling both city dwellers and wildlife, and green roofs can reduce heating and cooling costs for buildings (22). Water harvesting can reduce both consumers’ water bills and water demand pressures (22). An increasing body of research also shows that time near natural and green spaces quantifiably improves health, with measurable effects ranging from lowered blood pressure to improved immune function (18).

What are the geographic attributes of those who are affected?

The benefits provided by floodplains and riparian areas on most large rivers worldwide have been lost as upstream dam operations and levees have disconnected floodplains from rivers and as landscape degradation has reduced natural capacity to capture and store water and regulate flows (4). Over the last 20 years, floods have affected 2.3 billion people, 95% of whom were located in Asia (22). In many parts of the developing world, floodplains are choked, water bodies are losing their absorptive capacity, and populations and economic activity are much more concentrated, increasing vulnerability to flood (22).

Ninety percent of new urban residents are in Africa and Asia—many in some of the poorest countries in the world and many in cities, which are built along river basins (22). These growing populations in already densely populated areas will become more vulnerable to more frequent extreme weather events (6). Additionally, the UN World Water Assessment Programme (WWAP) has projected increasing flood risk for example, in Chile, China, and India, as well as in the Middle East and North Africa) where local coping strategies for previously rare flood events can be poorly developed (27).


Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

How can investments in line with this Strategic Goal contribute to outcomes, and are these investments’ effects likely better, worse, or neutral than what would happen otherwise

Most nature-based solutions and green infrastructure projects worldwide are funded through public and philanthropic means (19). While important sources of funding, these alone cannot meet the worldwide investment opportunity in green infrastructure. In 2018, the Organisation for Economic Co-operation and Development (OECD) estimated that global financing needs for water supply and wastewater infrastructure will reach USD 6.7 trillion by 2030, more than three times of the current investment levels (5). The High-Level Panel on Water convened by the United Nations and the World Bank recommended planning green and gray infrastructure in combination to meet this overall need for water infrastructure, highlighting especially the value of green infrastructure projects (12). Such projects, however, will require rerouted or new funds; without these investments, ecosystems will further degrade. This could increase malnutrition, disease, and other negative impacts arising from excess flooding (19).

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many target stakeholders can experience the outcome through investments aligned with this Strategic Goal?

More than half of the world’s population now lives in urban centers; by 2050, this proportion will rise to almost two-thirds (22). By 2030, two billion people will inhabit in urban slums, doubling from the present one billion. Most of this urban growth will occur close to coastal zones, floodplains, and other areas vulnerable to hazards (25). While rural flooding affects much larger areas of land and strikes the poorest populations, urban flood events affect a much higher concentration of people (13). As urban centers become denser due to concentrated economic activity and population growth, the likelihood grows that natural hazards will inflict heavy economic and human losses (22).

How much change can target stakeholders experience through investments aligned with this Strategic Goal?

Compared to gray infrastructure, green infrastructure can be more cost-effective, adaptable, and resilient, as well as providing a wide range of additional benefits beyond flooding and erosion protection (19). Nature-based solutions must be designed to fit local and site-specific contexts, so the potential cost savings and risk reduction will vary. Specific implementation examples nevertheless offer helpful points of reference. For example, green roofs can reduce stormwater runoff by promoting rainfall infiltration on the tops of buildings and retain 50–100% of the stormwater they receive (21). Some applications of permeable pavement have demonstrated 90% reductions in runoff volumes (14). The Low Impact Development Center has shown bioretention areas to remove up to 90% of heavy metals from stormwater (14).

An acre of constructed wetland can store 3.8 to 5.7 million liters of floodwater, reducing the burden on stormwater and wastewater systems (19). Depending on type and location, some inland wetlands can store 9,400–14,000 cubic meters of floodwater per hectare (19). A study in Indiana showed that landscape-level wetland restoration on 1.5% of the land can reduce flood peaks by 29%. Furthermore, implementing conservation tillage practices on agricultural land can increase water absorption by 30–45%. Finally, forest management can retain and slow moderate floods of short duration before soils become saturated (2). A review of forest restoration studies found that 82% reported a decrease in peak flow after restoring upland areas (9).


Dimensions of Impact: RISK

Key questions in this dimension include:

What impact risks do investments aligned with this Strategic Goal run? How can investments mitigate them?

Investors working to reduce flood risk and stormwater impacts through green infrastructure should consider impact risks including:

  • Execution Risk: Appropriate use of green infrastructure is highly specific to context, requiring careful and rigorous evaluation, planning, and design of project components (19). While green infrastructure can offer opportunities to resolve social inequalities or support vulnerable communities, social challenges may not be helped, and may even be exacerbated, if projects are poorly planned and executed (5). Green infrastructure projects may also impact more people than typical gray infrastructure projects, requiring engagement with multiple stakeholder groups and increasing transaction costs (19). For example, when expanding green infrastructure adjacent to farmland, investors should consider whether the project will take the land out of production, even seasonally, which can negatively impact livelihoods; and whether the created habitat would draw in nuisance animals that can negatively impact farmers’ yields.

    Investors can mitigate these risks by conducting thorough assessments to identify the optimal places to apply green infrastructure and to inform the design of the project (19). Investors can also design and implement projects with the full engagement of all relevant stakeholders (26) and using decision-support under uncertainty tools to consider the wide range of potential outcomes (5), including the dynamic evolution of ecosystem services over time. Investors can also mitigate risk by understanding the institutional and policy environment that creates enabling conditions for green infrastructure, incorporating projections of future changes in risk that may derive from climatic, socio-economic, or institutional changes (19).

  • Efficiency Risk: Assessing green infrastructure’s technical performance and its interaction with gray infrastructure is imprecise because of the inherent complexity of most natural systems, though technological advances are starting to overcome these challenges (5). Limited synthesis of lessons learned—and a lack of comprehensive scientific data to inform green designs in different geographies—has led to some inefficiencies in the design, assessment, and implementation of green infrastructure projects (5). To mitigate these risks, in due diligence, investors can ensure that projects make use of existing ecosystems and native species, comply with basic principles of ecological restoration and conservation (26), and map the interests of all stakeholders, including project developers, land owners and communities serving as project implementers, investors, approving bodies, technical advisers, and third parties providing monitoring and evaluation, incorporating adequate benefit-sharing schemes (5). In data scarce regions, investors can secure risk assessments based on remote sensing or other globally available data products (26) and encourage projects to use adaptive management based on long-term monitoring (26).

  • External Risk: The performance of green infrastructure projects in urban settings is likely somewhat limited (19). Service provision from green infrastructure in urban settings can be variable, with large uncertainties and possible failures that require thoughtful pairing and sequencing of all infrastructure components to ensure resilience (19). Evaluating the cost of green infrastructure requires careful, complete, and thorough accounting by all funding stakeholders. Further, the performance of green infrastructure ultimately depends greatly on ever-shifting local environmental, social, and political conditions (5). To mitigate these risks, investors can develop robust cost estimates that assess the feasibility and opportunity costs of proposed options (5), including the funding needs for long-term operation and maintenance. Investors can also integrate green infrastructure opportunities into projects that address multiple needs to obtain a cost-effective balance of construction, operation, and maintenance costs.

What are likely consequences of these impact risk factors?

Poorly researched, designed, or implemented green infrastructure projects are unlikely to achieve the intended reductions in flood risk and stormwater impact, and relevant stakeholders of the project are unlikely to provide the needed support or maintenance.

Illustrative Investment

The City of Atlanta Department of Watershed Management (DWM) partnered with Quantified Ventures and mission-oriented broker-dealer Neighborly to issue the first impact bond offered on the public markets (7). The USD 14 million Atlanta Environmental Impact Bond (EIB) funds innovative green infrastructure projects in the City of Atlanta to address critical flooding and water quality issues, reducing stormwater runoff and enhancing quality of life for neighborhoods in the Proctor Creek watershed. Supported by a grant from the Rockefeller Foundation, KeyBanc Capital Markets, and Sibert Cisneros Shank, the EIB is a form of performance-based financing, with repayment based on how successfully projects achieve environmental, social, and economic outcomes for local communities. The bond optimizes the efficiency of the City’s expenditures for the denoted projects by directly tying the amount the City pays on the bond to benefits related to the volume of stormwater the projects successfully manage. The EIB is expected to allow the City of Atlanta to increase its understanding of the long-term performance of green infrastructure projects and their benefits to communities, thus making it easier to secure funding and plans for future projects. Projects include bioretention basins in parks and rights-of-way, constructed wetlands, and stream and floodplain restoration.

The public water utility in Washington, DC, DC Water, issued a municipal environmental impact bond in 2015 to share performance risks associated with green infrastructure: rewarding investors if the project exceeded expectations and limiting risk to DC Water if it did not (5). The 30-year, USD 25 million, tax-exempt bond was placed with two private investors, and the proceeds provide the seed capital needed to construct three green infrastructure installations to better manage stormwater in the District and improve the incidence and volume of combined sewer overflows. The performance-based model encourages investors to complete due diligence, since they take a financial stake in project performance, while the investors gain reputational benefits from financing sustainable and innovative water-management solutions.

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

A Comparison of Runoff Quantity and Quality from Two Small Basins Undergoing Implementation of Conventional and Low-Impact-Development Strategies: Cross Plains, Wisconsin, Water Years 1999-2005

Selbig, W.R., and R.T. Bannerman. 2008. A comparison of runoff quantity and quality from two small basins undergoing implementation of conventional- and low-impact-development (LID) strategies: Cross Plains, Wisconsin, water years 1999-2005. Scientific Investigations Report 2008-5008, U.S. Geological Survey, 57.

Comparison of Stormwater Lag Times for Low Impact and Traditional Residential Development

Hood , Mark J., John C. Clausen , and Glenn S. Warner. 2007. “Comparison of Stormwater Lag Times for Low Impact and Traditional Residential Development.” Paper No. J05177 of the Journal of the American Water Resources Association (JAWRA) 43 (4): 1036-1046.

Stormwater runoff and export changes with development in a traditional and low impact subdivision

Dietz, Michael E., and John C. Clausen. 2008. “Stormwater runoff and export changes with development in a traditional and low impact subdivision.” Journal of Environmental Management 87 (4): 560-566.

Assessing the Co-Benefits of green-blue-grey infrastructure for sustainable urban flood risk management

Alves, Alida, Berry Gersonius, Zoran Kapelan, Zoran Vojinovic, and Arlex Sanchez. 2019. “Assessing the Co-Benefits of green-blue-grey infrastructure for sustainable urban flood risk management.” Journal of Environmental Management 239: 244-254.

Assessing the risk of utilizing tidal coastal wetlands for wastewater management

Shifflett, Shawn Dayson, and Joseph Schubauer-Berigan. 2019. “Assessing the risk of utilizing tidal coastal wetlands for wastewater management.” Journal of Environmental Management 236: 269-279.

Effects of Low-Impact-Development (LID) Practices on Streamflow, Runoff Quantity, and Runoff Quality in the Ipswich River Basin, Massachusetts: A Summary of Field and Modeling Studies

Zimmerman, M.J., M.C. Waldron, J.R. Barbaro, and J.R Sorenson. 2010. Effects of low-impact-development (LID) practices on streamflow, runoff quantity, and runoff quality in the Ipswich River Basin, Massachusetts—A Summary of field and modeling studies. Circular 1361, U.S. Geological Survey, 40 p. (Also available at

Grow in Concert with Nature: Green Water Defense for Flood Risk Management in East Asia

Li, Xiaokai, Marcel Marchand, and Weihua Li. 2012. Grow in concert with nature : green water defense for flood risk management in East Asia (English). An EASSD discussion paper, Washington DC: World Bank.

Regulating Ecosystem Services and Green Infrastructure: assessment of Urban Heat Island effect mitigation in the municipality of Rome, Italy

Marando, Federica, Elisabetta Salvatori, Alessandro Sebastiani, Lina Fusaro, and Fausto Manes. 2019. “Regulating Ecosystem Services and Green Infrastructure: assessment of Urban Heat Island effect mitigation in the municipality of Rome, Italy.” Ecological Modelling 392: 92-102.

The Role of Green Infrastructure Solutions in Urban Flood Risk Management

Soz, Salman Anees, Jolanta Kryspin-Watson, and Zuzana Stanton-Geddes. 2016. The Role of Green Infrastructure Solutions in Urban Flood Risk Management. Washington, DC: World Bank. License: CC BY 3.0 IGO.

Urban Green Spaces and an Integrative Approach to Sustainable Environment

Haq, S. . 2011. “Urban Green Spaces and an Integrative Approach to Sustainable Environment.” Journal of Environmental Protection 2 (5): 601-608.

Controlling Yangtze River Floods: A New Approach

Pittock, Jamie, and Ming Xu. n.d. World Resources Report Case Study. Controlling Yangtze River Floods: A New Approach. Washington DC: World Resources Report. Available online at

Planning for cooler cities: A framework to prioritise green infrastructure to mitigate high temperatures in urban landscapes

Norton, Briony A., Andrew M. Coutts, Stephen J. Livesley, Richard J. Harris, Annie M. Hunter, and Nicholas S.G. Williams. 2015. “Planning for cooler cities: A framework to prioritise green infrastructure to mitigate high temperatures in urban landscapes.” Landscape and Urban Planning 134: 127-138.

The Urban Stream Syndrome: Current Knowledge and The Search for a Cure

Walsh, C. J., A. Roy, J. W. Feminella, P. D. Cottingham, P. M. Groffman, and R. P. Morgan. 2005. “The Urban Stream Syndrome: Current Knowledge and The Search For A Cure.” Journal Of The North American Benthological Society (North American Benthological Society) 24 (3): 706-723.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.