Contemplating Marine Financial Strategies
The Nautilus Blue Guarantee Company is pioneering a new approach to investing in the blue economy, offering guarantees for investments in six key sectors, including sustainable seafood, ocean conservation, and blue infrastructure. This initiative aims to unlock private capital for investments in these vital areas.
However, a recent report indicates that 187 out of 220 regions measured have shown declines in scores, highlighting the urgent need for sustainable ocean financing. The ocean absorbs around 25% of human-caused carbon dioxide emissions, making its health crucial for climate change mitigation.
Recognizing this, innovative financing solutions and frameworks have been developed to support sustainable ocean financing. One such initiative is the Sustainable Blue Economy Finance Principles, launched by the UN in 2018, which guide financial institutions towards investing in ocean sustainability.
Another significant development is the Ocean Risk and Resilience Action Alliance (ORRAA) and its UN-backed #BackBlue commitment. These initiatives promote investments that increase ocean resilience, a critical factor in the face of climate change and ecosystem shocks.
The 2025 Ocean Investment Protocol, launched by the UN Global Compact and the UN Environment Programme Finance Initiative, provides a practical roadmap for financial institutions, insurers, and development banks to manage ocean-related risks and unlock investment opportunities aligned with SDG 14, "Life Below Water."
Beyond these, innovative financial mechanisms like debt-for-nature swaps (DFNS) are gaining traction. Gabon's deal, for instance, allows the country to reduce debt burdens while directing funds towards marine conservation and climate resilience efforts. Blue carbon financing, investing in the protection and restoration of coastal ecosystems like mangroves and seagrasses, is emerging as a critical nature-based solution.
The Asian Development Bank's Blue SEA Finance Hub is designed to help Southeast Asian economies structure their blue-economy investments, further demonstrating the growing importance of sustainable ocean financing.
Ensuring that finance goes towards supporting ocean health is non-negotiable for the planet and humanity. Fisheries sustain 600 million people, mostly in developing countries, and the marine biotechnology market is projected to reach US$6.4 billion by 2025. In 2023, trade in ocean goods and services reached record highs of US$900 billion and US$1.3 trillion, respectively.
However, according to The Ocean Panel, less than 1% of the ocean's value has been invested in sustainable projects over the last ten years. This underscores the need for continued innovation to create and institutionalize investable solutions that can improve and scale up "blue finance."
In conclusion, sustainable ocean financing integrates multiple innovative solutions such as standardized global frameworks, risk-sharing alliances, nature-based finance instruments like DFNS, and blue carbon markets. These approaches are all aimed at unlocking and scaling up the investments necessary for long-term ocean health and resilience.
References: 1. The Ocean Panel (2021) Sustainable Ocean Finance: A Roadmap for the Future. 2. World Wildlife Fund (2021) Debt-for-Nature Swaps: A Climate Finance Solution for the Ocean. 3. UN Environment Programme (2018) Sustainable Blue Economy Finance Principles. 4. The Nature Conservancy (2021) Blue Carbon: A Solution for Climate Change and Ocean Health.
