Summits can Unblock Ocean Finance Flows
The Blue Economy and Finance Forum and UN Ocean Conference in June will provide an opportunity to channel private investment.
Governments gathering for critical ocean-focused negotiations this summer must prioritise unlocking private financial flows into a sustainable and regenerative blue economy, according to ocean finance experts.
In June, Monaco will host the Blue Economy and Finance Forum (BEFF), which will serve as a final special meeting ahead of the third UN Ocean Conference (UNOC) later that same month. Both summits aim to progress collaborative ocean policy action and ways in which to incentivise private investment in sustainable solutions.
“To boost investment in the sustainable blue economy, we need greater collaboration between governments, multilaterals, and private finance to create risk-sharing mechanisms like blended finance tools, guarantees and insurance that lower barriers to entry for private investors. We also need recognition that smaller investments with fewer strings that move quickly are, in the current moment, critical to deploy rather than waiting for the billions and trillions,” Karen Sack, Executive Director of the Ocean Risk and Resilience Action Alliance (ORRAA), told ESG Investor.
“This June’s BEFF and UNOC will be critical to accelerating these and other crucial building blocks for driving investment into the regenerative and sustainable blue economy.”
The BEFF aims to unlock financing for ocean-based solutions – especially biodiversity-positive investments that support economic development and climate goals.
Meanwhile, UNOC’s key focus is on the implementation of Sustainable Development Goal (SDG) 14 – ‘life below water’ through policy action that mobilises all actors to conserve and sustainably use the ocean.
UNOC, which was first held in 2017, brings together a broad range of stakeholders, including governments, intergovernmental organisations, international financial institutions and the scientific community.
The second UNOC, held in Lisbon in 2022, saw key commitments made, such as pledges for marine protected areas, sustainable fisheries management, combatting marine pollution, and mobilising finance for ocean action.
Common definitions
Private investors have a big role to play in ensuring successful negotiations, according to Laure Boissat, Oceans Programme Manager at the FAIRR Initiative.
“First and foremost, investors can encourage the creation of common definitions and classifications for what qualifies as a sustainable blue investment,” she said.
“A unified taxonomy helps investors identify credible projects and avoid greenwashing, increasing trust in blue finance.”
Investors can also promote and expand innovative financial instruments that de-risk investments for the private sector, such as blue bonds, blended finance mechanisms, and ocean impact funds, she said.
As an example, Boissat flagged the Althelia Sustainable Ocean Fund, an impact investment instrument created by asset manager Mirova which targets sustainable seafood, the circular economy and ocean conservation.
In March, UNOC co-chairs France and Costa Rica produced 15 recommendations to diversify ocean economies, enhance maritime resilience, accelerate decarbonisation, and improve access to both finance and technology.
Although oceans have a collective estimated value of US$24 trillion, less than 1% of global capital flows is directed to the blue economy.
A report published by the Organisation for Economic Cooperation and Development (OECD) in March warned that the growth of the ocean economy will stall without stronger international protections and governance. It highlighted expanding marine territorial claims by nations, illegal fishing operations and climate change as major threats to future growth that need to be addressed.
The World Economic Forum has said that “transitioning to a nature-positive, inclusive, and sustainable economy is not achievable without a safe and thriving regenerative blue economy”.
360° view of the pipeline
Investors are increasingly recognising the financial materiality of sustainable and regenerative oceans. However, there is still a perceived lack of an investable project pipeline, according to Sack at ORRAA.
“This is the single most cited issue deterring potential private sector investors from engaging,” she said.
“They often struggle to see viable financing opportunities in coastal and ocean nature-based solutions, even though these solutions effectively build resilience and reduce risk exposure for vulnerable coastal communities.”
ORRAA runs the Sea Change Impact Financing Facility (SCIFF) – a collaborative effort to develop an open ocean financing architecture designed to drive at least US$1 billion of private investment into coastal and ocean ecosystems, with a focus on the Global South, by 2030.
“This will provide a springboard from which to mobilise at least US$2.5 billion of broader finance capital,” said Sack.
SCIFF instruments include the Blue Bond Accelerator, Outrigger Impact Fund, and Nautilus Blue Guarantee Facility.
ORRAA and the World Wide Fund for Nature (WWF) also co-run the #BackBlue Ocean Finance Commitment, which aims to ensure that sustainable and regenerative ocean-related activities form part of financing and insuring decisions.
Investing between US$2 trillion and US$3.7 trillion across ocean solutions could generate between US$10.3 trillion and US$26.5 trillion in total benefits from 2020-50, according to the World Resources Institute. This is equivalent to a 400-615% return on investment.
Investors are also working to better understand ocean-related risks and opportunities.
A group of global investors previously published a statement calling for better ocean-related data and tools on performance indicators, supply chains, local contexts, and sector estimates to support investment decisions, citing the importance of improving ocean-focused disclosures and data to inform their understanding of the ocean-related risks and dependencies in their portfolios.
According to Boissat, coordinated regulatory action is needed to unlock data and finance.
“Stable regulatory environments and ocean-related standards – such as sustainable fisheries, marine spatial planning – can attract private investment by increasing predictability,” said Boissat.
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