It was fantastic to join the conversation at the World Ocean Summit in Lisbon last week and see governments, finance, corporations, NGOs, and academia come together to discuss the scaling of a sustainable blue economy. The conversation focused on: how can we unlock the ocean’s potential to tackle the climate biodiversity crises by scaling investment while also building stakeholder trust.
Here are 5 points that illustrate the essence of the discussions I participated in:
1. Oceans are overlooked by investors, although (i) they contribute to 1/3 of global GDP, (ii) over 2/3 of listed companies are dependent on the oceans and (iii) over $8 trillion in revenues are at risk if we don’t take care of them.
We need to stop seeing the oceans as separate from the economy and instead recognise that a healthy ocean is the foundation for a thriving global economy.
2. The pipeline of NBS coastal and marine projects is increasing – finance now needs to match.
To drive investment while codes and standards are still under development, there are clear steps that corporates and investors can take: (i) support conservation agencies and sovereigns who are looking to create innovative financing structure, (ii) support the rise of dedicated funds on nature, and (iii) work with others to form a buyers alliance for high-integrity projects in the coastal and marine space.
3. The value drivers are becoming clearer for marine and coastal NBS projects.
When looking at the commercial viability of an NBS project, many do not generate enough revenue from a single revenue stream to attract private capital, especially in the early years of projects. The bundling of revenues is often necessary to generate attractive financial returns. At the moment, carbon credits offer the most reliable source of revenue but we’re also seeing growing utilisation of aquaculture and ecotourism for cashflows.
4. Putting local communities at the heart of projects is a must.
In the context of market scrutiny and expectations around high integrity, projects who don’t secure buy-in from Indigenous people and local communities and have very little chance of advancing beyond the concept stage. Fortunately, we’re seeing growing momentum towards innovative models for benefit sharing. For example, new models are emerging to ensure the rights of these people and communities are respected by incorporating indigenous organisations as owners and leaders in projects.
5. There’s an opportunity for nexus.
Everything is connected to the ocean. Embracing the complexity of the issue will lead to faster solution. What we are missing though is a link between environmental and economic benefits, pricing in relevant externalities and looking at the convergence between economic and environmental linkages.
Finally, we need to take responsibility. A blue revolution will require significant collaboration efforts, and taking responsibility for our attitude is the first step. As Oliver Morton from The Economist put it: “It was particularly striking to see the mixture of realism and resolve – nobody kidding themselves about the magnitude of the challenge but also a heartening lack of despair.”
