With the first-ever insurance policy for a coral reef in place on the Mesoamerican Reef in Mexico, The Nature Conservancy (TNC), with support from Bank of America, today announced plans to research the expansion of an innovative, nature-based insurance program that expedites the repair of coral reefs after major storms.
Today’s announcement of an additional $1 million grant from Bank of America enables TNC’s scientists to conduct studies in both Florida and Hawaii to identify where coral reef insurance and improved reef management could provide an innovative and cost-effective solution to coastal flooding and other risks related to major storm events. This initiative adds to the bank’s initial $1 million grant in 2016 that funded a feasibility study for the one-of-a-kind reef insurance concept and policy in Mexico.
“TNC and its partners proved that insuring coral reefs was possible in Mexico,” said Mark Way, director of Global Coastal Risk and Resilience for The Nature Conservancy. “Now, we are ready to scale this work. The Nature Conservancy is very grateful to the Bank of America Charitable Foundation for its vital, early stage support of our efforts to produce market-driven, nature-based solutions for coastal resilience.”
Reef insurance is a promising model allowing countries to simultaneously protect its residents, nature, and property. By safeguarding the natural infrastructure coral reefs provide, lives and livelihoods of countless people around the globe can be protected — as well as potentially billions of dollars of infrastructure.
Globally, coral reefs face multiple threats, including those from hurricanes. The reefs of Hawaii and Florida provide both states a high level of protection. It is estimated that annually the value of that protection to property and economic activity is over $1.5 billion. Given this, and building on TNC’s work in Mexico, assessing the potential for expanding reef insurance to Florida and Hawaii presents an exciting opportunity for the future of valuing and protecting nature.
“By working with partners like The Nature Conservancy, we are able to support the development and implementation of innovative solutions to climate resiliency, water security, conservation and other environmental challenges,” said Andrew Plepler, global head of Environmental, Social and Governance at Bank of America. “Through our sustainable finance efforts and philanthropic support, projects like this can be scaled and replicated, building a more sustainable economy and climate resilient communities.”
The Mesoamerican Reef is a crucial link in the natural and economic ecosystems of Quintana Roo, Mexico. It protects the state’s coastline from storms and is part of a beautiful landscape that attracts 12 million tourists each year.1 Reefs take time to reproduce and heal after a storm. The sooner the repair process begins, for example by removing debris, reattaching broken-off coral pieces or righting coral that has been knocked over, the better the chance of a successful recovery after the storm.
Hurricane damage to reefs can be repaired with skilled cleanup and repair efforts. Financing these repairs requires sufficient funding. That is where the reef insurance comes in. In Quintana Roo, the state government with support from TNC set up the Coastal Zone Management Trust, which will receive revenues from a fee paid by local beachfront property owners. The trust will use these revenues to maintain the reef and purchase an insurance policy that is designed to distribute funds quickly after a major hurricane. This unique approach ensures critical funding for this section of the Mesoamerican Reef.
“Early analysis of enabling conditions required for reef insurance suggests that there is enormous potential to scale this work to coral reefs domestically and internationally,” said Way. “In addition to Florida and Hawaii, we are currently exploring opportunities to expand the approach in the Caribbean, Central America, and Asia.”
Bank of America has partnered with The Nature Conservancy for over 40 years. Since 2012, the bank has provided $3.5 million in grant funding to the nonprofit to advance conservation efforts.
The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world's toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 72 countries, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.
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