Sustainable Blue Economy Finance Principles may shape future ocean investment

Published on
March 27, 2018

With the goal of preserving and increasing the value generated by the world’s oceans, corporate, environmental, non-profit and other participants in the Economist World Ocean Summit, held in Mexico from 7 to 9 March, created a new set of voluntary guidelines for institutional investors to create a path toward greater aquatic sustainability.

The annual economic value generated by the world’s oceans is estimated to be at least USD 2.5 trillion (EUR 2 trillion), making it the equivalent of the seventh-largest economy on the planet.  The summit reviewed the numerous stresses being placed on the world’s oceans, including declining biodiversity, degrading habitat, increasing water acidity, accumulating plastic and other wastes, and rising temperatures and participants came to a consensus that concerted action is required to protect and restore ocean health to avoid stunting the fast-growing global blue economy. The summit closed with the unveiling of 14 Sustainable Blue Economy Finance Principles intended to guide the path to sustainable ocean development.

“Reconciling economic development aspirations with ocean ecosystems that are already showing great stress is one of the great challenges facing humanity,” WWF International President Pavan Sukhdev said. “The role of the finance and investment community to find a pathway to genuine sustainability is vital, which is why the new principles were created. We welcome additional signatories to this critical initiative as well as strong partnerships to ensure their success.”

The blue economy principles emerged out of a partnership between the European Commission, WWF, the Prince of Wales’s International Sustainability Unit, and the European Investment Bank (EIB), which in 2017 set out to look at how the finance and investment community could play a strong role in driving change. They found that for financiers investing in this complex and risky environment, there was little guidance available on how to act. 

The new coalition’s first formal act, initiated in May 2017, was to commission a study by Accenture Development Partnerships on existing green and blue economy finance initiatives. This was followed by EIB-led consultations with a broad range of private and public financial institutions, insurance companies, NGOs, and other interested parties, that resulted in the idea to develop a set of principles that reflected the needs of as many stakeholders as possible.

The newly released principles, which include seven focused on sustainable investment and seven principles specific to the blue economy, are designed to foster cooperation and communication on ocean health, scientific research, data collection, and technical innovation, according to the coalition.

The principles complement existing frameworks in sustainable finance, and recognize the importance of compliance, transparency, and disclosure, the coalition said. They were designed to support the United Nations’ Sustainable Development Goals, a set of international development objectives adopted in 2015 aimed at poverty elimination, environmental stability, and global peace and prosperity. One of those goals calls for conservation and sustainable use of the world’s oceans, seas and marine resources. In addition, the principles are compliant with International Finance Corporation Performance Standards and EIB’s Environmental and Social Principles and Standards.

“Harnessing global investment and ensuring investor confidence through transparency and disclosure are key to increasing support for the blue economy and strengthening sustainable development in coastal communities,” EIB Vice President Jonathan Taylor said. “The European Investment Bank is pleased to support the Blue Finance Principles, which will help to optimize the use of scarce public resources and crowd in private sector investment. New investment in the blue economy is essential to diversify economic activity in communities most at risk from a changing climate and to enhance resilience to extreme weather events.”

The partnership now hopes that the Sustainable Blue Economy Finance Principles will become more widely adopted, and aims to build an international coalition of financial institutions that endorse them. The result would be a transformation in the way in which humanity manages ocean resources, and become a testament to how profitability can go hand-in-hand with environmental and social stewardship, Taylor said.

Several big names have already signed up, including Althelia Ecosphere, Aviva Investors, the EIB, The Nature Conservancy, Rockefeller Ocean Strategy, Sky, the U.N. Principles for Sustainable Insurance, and the World Bank. 

The principles have also received endorsement in the final report of the European Union High-Level Expert Group on Sustainable Finance, which was published in January 2018. In its report, the group recommended the broad adoption and implementation of the Sustainable Blue Economy Finance Principles by the finance community.

“One sector’s activity can have unintentional consequences on other industries, or on ocean ecosystems and the communities that rely on them for food security and livelihood,” Taylor said. “The full value of the ocean’s natural capital asset therefore depends on our ability to protect, maintain and restore it where necessary, for future shared use.”

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