blue economy

How Investors Could Save the Oceans and Regenerate the Blue Economy

While the definition of the blue economy varies, the blue economy serves as a development framework and policy for sustainable and regenerative marine economic activities and new marine-based technologies which are suitable for the ocean and lead to sustainable wellbeing, food security, and good health.

From creating a sustainable food supply to supplying clean energy and even reversing climate change, the oceans present a global opportunity for making a tangible impact. 

Measuring Blue Economy Value

Economic value from the oceans is measured both by the direct and indirect impacts they produce.  According to the World Wildlife Fund, these combined assets are worth at least $24 trillion. And marine goods and services amount to about $2.5 trillion each year — which would make it the seventh-largest economy in the world if put into terms of Gross Domestic Product. Overall, climate-induced declines in ocean health could cost the global economy $428 billion annually by 2050.

As impact investing and environmental, social, and governance (ESG) standards become a larger segment of the investing landscape, there are opportunities to educate investors and inspire the entrepreneurs to drive solutions for ocean impact forward. In addition, the broader emergence of aligning business practices with the United Nations Sustainable Development Goals (SDGs) has already catalyzed this conversation around the blue economy strategy and development framework. As a result, the SDGs are increasingly gaining traction as an organizing framework for many investors.

Blue Bonds: What Are They? 

As investors show growing interest in committing capital to solve environmental and social challenges, blue bonds have emerged as the latest financing instrument to help protect the world’s oceans and the economies that rely on their health.

Blue bonds are a relatively new type of sustainability bond which finances projects related to ocean conservation and water related projects. Although there is no specific guidance for blue bonds at this stage, several of the first Blue Bonds have already been issued (more on that later). Like green bonds and social bonds, blue bonds operate similarly to any other debt instrument by providing capital to issuers who repay the debt with interest over time. The main difference is that blue bonds are used to fund ocean-related projects to preserve and protect the environment, promote biodiversity, and support economies reliant upon healthy and sustainable fisheries.

Blue bonds gained attention in October 2018, after the World Bank facilitated a bond agreement to offload a small portion of the Republic of Seychelles’ debt in exchange to fund sustainable fisheries. More recently, Morgan Stanley underwrote the World Bank’s $10 million issuances of 30-year blue bonds, intending to solve the challenge of plastic waste pollution in oceans.

According to the Rising Tide: Mapping Ocean Finance for a New Decade, the second-highest activities in the sustainable blue economy stemmed from Africa and the Middle East. Beyond this, the Asia Pacific region features the highest overall reported instances of blue economy investment – this may be due to the concentration of blue economy-related activity, notably around seafood and maritime transportation, in this region. North America, Latin America, and the Caribbean do not hold the leading positions in this ranking. 

“Innovative ocean financing tools would allow us to unlock the potential of the ocean economy while also protecting the marine environment,” says Silvio F. Pupo, managing director of Logos Capital, which is launching a Blue Economy Fund to help secure funding for projects in the ocean tech space. “To reach full potential and achieve the goals of UN SDG 14, we need to activate the investment community for ocean innovation and complement the vital roles of philanthropies and scientists in this space; the ocean has the greatest impact of any Sustainable Development Goals across all of the other SDG’s.” 

Ocean-impact funds and accelerators are rising across the world. One of the most famous is Ocean Impact Organization, based in Australia, which helps people start, grow and invest in businesses that positively impact the ocean.  Katapult Ocean from Norway is another world’s leading ocean impact accelerator and connector to the blue economy.

From Ocean Impact Accelerators to Venture Studios

Investable Oceans offers a blue economy investment platform to simplify and accelerate market-based sustainable ocean investing across all asset classes and all sectors of the Blue Economy by centralizing research, commentary, inspiration, and access to blue enterprise in one place.

A Florida-based startup, Seaworthy Collective, stands out among that list. It’s the first ocean impact-focused venture studio in the continental US. The venture studio facilitates the creation of startups from the ground up, building the initial team of co-founders, providing strategic direction, and attracting capital for the startup to reach product-market fit. 

“Instead of seeking out people with ideas, we know the areas that we can have the greatest potential impact, and we seek out people to help co-found startups around them,” explains Daniel Kleinman, Founder, and CEO of Seaworthy Collective. “We see abundant opportunities in the earth’s most abundant resource, from reducing plastic pollution to carbon dioxide and greenhouse gas removal. Our mission is to democratize this opportunity, make it more inclusive and accessible and say anyone can be a co-founder of a startup in this ocean impact space.” 

This summer, Seaworthy Collective is going to host its first Opportunities for Sea Change venture studio cohort. The program received over 100 applications from students and industry veterans alike who want to work on developing cutting-edge ocean technology.

With a loss of nearly half of the world’s coral reefs which are extremely important to the biodiversity of the oceans, with 8 million tons of plastic entering the oceans every year, it is imperative to accept that the future of people and the ocean are interconnected, and the time to act is now.  

It is also crucial to cultivate ocean financing advocacy and build the blue bond market. Raising awareness and educating the investment community around risks and opportunities may help the ocean sector gain greater recognition within the blue economy development framework and galvanize multi-sectoral and multilateral efforts for a sustainable and regenerative ocean economy. 

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