I moderated a great session on “How to invest better in the blue economy” at Economist Impact’s recent World Ocean Summit in Lisbon. The session focused on how investors can identify companies that combine strong growth potential with a truly sustainable business model. Participants also looked at key performance indicators that can inform decisions that align with sustainable goals. The discussion provided guidance on how businesses can effectively communicate their sustainability commitments to attract investment and foster stakeholder trust.
If the ocean were a country, it would be the eighth-largest economy. And the ocean’s natural capital alone has been valued at at least US$24trn. Yet SDG14 on “Life Below Water” has received the lowest levels of long-term funding of all SDGs. This lack of investment does not just undermine SDG14 itself, it also means that the full potential of the ocean for meeting the entire UN sustainability agenda remains untapped. Investing in the blue economy can help address many global sustainable development challenges—from poverty and hunger to gender inequality and climate change.
Panellists included:
• Karen Sack, Executive director, Ocean Risk and Resilience Action Alliance (ORRAA)
• Markus H.-P. Müller, chief investment officer ESG, Deutsche Bank
• Maria de Athayde Tavares, lawyer – finance, energy and infrastructure, Lisbon, Linklaters
• Annick G. Paradis, executive director, Pollination
• Clara Johnston, Account Executive, NatureMetrics
Key takeaways:
🌊 4 key areas of action: regulation, metrics, litigation, and finance & investment
🌊 Science, finance and policy need to be brought together to maximise impact (e.g. speak a common language)
🌊 During this time of regulatory ambiguity there is a need for an adaptive regulatory frameworks: emergence of regulatory sandbox as a dynamic, evidence-based regulatory environment to test emerging technologies (e.g. in the Bahamas)
🌊 Need for system change driven by major sector incumbents: new sustainable business models that recognise dependency on nature; driving change through value chains; supported by disruption by innovation-driven start-ups
🌊 Important role of investors: identifying ocean-positive business models with strong growth potential (economic viability remains important throughput the transition)
🌊 Fit-for-purpose metrics are critical in supporting stakeholders make ocean-positive decisions (including investment decisions)
🌊 Nature-related risk needs to be recognised as a material financial risk, incentivising action by business and investors
🌊 The purpose of the metrics matters (supporting ocean regeneration), not the volume; need to link metrics to impact (e.g. impact bonds); need to communicate benefits of metrics (storytelling is critical here); the multi-purpose benefits of the metrics need to be recognised; additionality matters (prove you are actually helping)
🌊 Role of litigation is crucial and often overlooked: it has to be part of a sensible risk management approach; litigation is rapidly escalating both from the authorities and third parties
🌊 Local communities (including indigenous communities) need to be at the heart of projects and included in benefit-sharing mechanisms
🌊 Nature-based solutions could generate multiple revenue streams to boost their economy viability (e.g. aquaculture and ecotourism); governments and supranationals can help mobilise capital; co-benefit approach needs to be embedded in project design