Turning the Tide A Financier's Guide to Investing in Blue Carbon Ecosystems 2026

Insurers promoting and incentivizing behaviours and business practices that reduce the degradation of blue carbon ecosystems and promote restoration Through premiums and underwriting, insurers can incentivize practices that reduce degradation and promote restoration, such as: Green building or infrastructure insurance aligned with sustainability standards and blue infrastructure. Sustainability-linked insurance premiums that provide businesses with premium discounts tying their impacts and/or positive contributions to blue carbon ecosystems, particularly where those activities have a nexus to their exposure to nature-related risk.46 Integrating nature-related resilience into risk management, underwriting and pricing,47 leveraging insurers’ influence over investment decisions.48 Leveraging their significant in-house expertise and climate-risk related data, insurers can also provide technical assistance to policy-makers on how blue nature-based ecosystems can reduce climate and nature-related risks.49 The Restoration Insurance and Financial Service Company (RISCO) is pioneering an integrated model that links insurance, lending and blue carbon restoration to strengthen the resilience of coastal communities in the Philippines. RISCO operates as a quasi micro-finance provider, pairing parametric insurance with low-interest loans, whereby repayment is linked to revenue generation instead of fixed schedules. RISCO’s model is centred on community-level interventions: partnering with universities such as the Western Philippines University to offer borrowers technical support, offering legal support and partnering with governments to assist borrowers to navigate permit and formalization processes, and partnering with supply chain actors to secure market access. RISCO’s lending activities target small coastal businesses and aquaculture operators, and it typically offers finance in the order of ~$25-50,000. To finance its blue carbon and lending activities, RISCO uses philanthropic and internal capital as a first-loss tranche, seeking to attract impact investors targeting fixed, risk-adjusted returns. Premium revenues received by its insurance arm feed into its lending activities. RISCO is working with municipalities in Puerto Princesa to earmark a portion of their mandated disaster-risk budgets for parametric insurance premiums, creating a repeatable, public-private funding loop for resilience. RISCO’s experience highlights both the challenges and opportunities in leveraging insurance for blue ecosystem finance. While direct insurer funding for restoration remains elusive, bundled, community-oriented financial products can overcome affordability barriers and create investable pathways for resilience. Despite growing recognition of the protective and financial value of blue carbon ecosystems, insurance-linked finance remains in its early stages. A combination of technical, regulatory and market barriers continues to limit the scale-up of ecosystem-linked insurance products.CASE STUDY 4 From risk to resilience: How RISCO is turning insurance into a driver for blue carbon restoration Image credit: RISCO Turning the Tide: A Financier’s Guide to Investing in Blue Carbon Ecosystems 21