News

A new study by Deltares, NIPV and TNO explores how climate threats such as heat, drought and wildfire can trigger chain reactions in vital infrastructure and public services in the Netherlands. Using a detailed scenario around prolonged drought, a severe heatwave and a nature fire near Zandvoort, the authors show how power cuts, telecom failures and mobility problems can quickly build up and strain crisis organisations. They conclude that structural scarcity of people and resources, unclear roles between levels of government, and limited insight into interdependencies all increase systemic risk, and that an integrated, multi-hazard approach is urgently needed.

Europe is already experiencing heavy losses from heat, drought, floods and wildfires, and these risks are set to grow. A new EU-level scientific report calls for a much stronger and more coherent adaptation policy framework. It proposes common climate scenarios, clear resilience targets and better use of public and private finance. This will directly influence how banks, insurers and investors across Europe, including in the Netherlands, assess and manage physical climate risks.

Research by Deltares, the Vrije Universiteit Amsterdam, and Achmea shows that structural damage to residential homes caused by flooding is underestimated in the Dutch Damage and Casualty Model (SSM2023). The damage function from this model is therefore not suitable for use by the financial sector.

KNMI’s fifth State of our Climate report finds that 2025 was warm, exceptionally sunny and very dry in the Netherlands, reflecting accelerating climate change. It was the sixth warmest year on record at De Bilt and the second sunniest since measurements began. Average temperature reached 11.4°C, around 0.9°C above the 1991–2020 average, while rainfall was far below normal. All ten of the warmest years in the Dutch record now fall in this century, showing the Netherlands is warming almost twice as fast as the global average. Despite relatively few severe warning days, 2025 ranked among the ten driest years for summer moisture deficit.

The Dutch Association of Insurers is setting up two new ESG sector tables to create uniform CO₂ standards for private residential building insurance and freight vehicle insurance. Building on earlier ESG standards, the initiative responds to fragmented and sometimes inconsistent use of the PCAF methodology, which hampers comparability and trust in CO₂ reporting. The new standards are designed to tackle complex data and methodological challenges while aligning with developments in the housing and transport sectors. For financial institutions, the outcome should be more reliable and comparable emissions data, better support for clients’ decarbonisation strategies and a clearer pathway towards climate-neutral insurance portfolios.

Extreme rainfall in the Netherlands is increasingly creating safety risks, not just damage and nuisance. A new report by the Dutch Safety Board shows how heavy rain and high groundwater have already disrupted vital infrastructure, healthcare and vulnerable housing areas, and warns that current policies and standards are not yet geared towards these safety impacts. The Board calls for stronger national direction, clearer safety-based requirements for climate-resilient construction and infrastructure, and targeted action in the most vulnerable neighbourhoods – with clear implications for risk management and asset valuation in the financial sector.

A new study in Real Estate Economics analyses 1.8 million Dutch housing transactions between 1998 and 2023 to see how buyers respond to flood risk. The authors find that homes in flood-exposed areas trade at an average discount of around 1.1%, with stronger effects where risk is higher and institutions differ across flood zones. Collective flood protection projects substantially soften these discounts, and their costs appear small compared with the housing market value they help to safeguard.

The European Central Bank (ECB) has announced the completion of its 2024–2025 climate and nature plan and set out its next priorities, with water-related risks highlighted as the most material nature-related threat to the euro area economy. Climate and nature considerations are now more firmly integrated into monetary policy, banking supervision and the ECB’s own portfolios, including changes to the collateral framework, further decarbonisation of corporate bond holdings and more advanced climate stress testing and scenario analysis. Supervisory expectations for banks on identifying, quantifying and managing climate and nature risks have been tightened, while the ECB’s updated monetary policy strategy now explicitly acknowledges nature degradation as relevant for price stability.

A new Water Matters study analyses the costs of the Dutch adaptation strategy of moving with sea level rise, in which people and economic activity gradually move from low-lying to higher areas. The research breaks down costs into implementation, flood damage, and wider socio-economic effects, allowing comparison with other long-term strategies. It finds that all variants of moving with sea level rise are significantly more expensive than continuing current flood protection, especially if flood defences are not maintained during the transition. The study concludes that continued investment in flood defences during any transition is crucial to avoid catastrophic risks and rising inequality.

The European Union’s first Soil Monitoring Law entered into force on 16 December 2025, requiring Member States to monitor and assess soil health across all land types. The law addresses key soil threats such as erosion, compaction and contamination and is part of the Soil Strategy for 2030 under the European Green Deal. It includes provisions to improve data sharing and support for farmers and soil managers without imposing new obligations on landowners. The initiative aims to enhance knowledge of soil conditions and contribute to healthier soils by 2050.