Investors missing out on blue economy opportunities but tide is changing – Investment Week

Investors missing out on blue economy opportunities but tide is changing Investment WeekInvestors missing out on blue economy opportunities but tide is changing Investment WeekInvestors missing out on blue economy opportunities but tide is changing Investment Week

Asset managers are beginning to see it as an emerging investment theme that offers a “golden chance” to be explored.
Credit Suisse’s report found that almost a third of investors (28%) are failing to address sustainable green economy themes in their investment portfolios. This term refers to commercial activity on the coasts and oceans.
Investors and Blue Economy Credit Suisse also revealed that although global ocean assets have a value of $24trn, which makes it the seventh-largest, investors have shunned it.
Investment Week was told by Rob Lambert, senior corporate analyst and investment grade at BlueBay Asset Management that the blue economy has been largely ignored.
Asset managers are trying to convince investors that what’s good for the ocean might also be good for business.
There are many opportunities
“The best thing about the blue economic is that all the opportunities align with important drivers such profitability and social impact,” stated Ben Rotheray (Managing Director of The Value Engine) and a member FANBEST, The Funding Atlantic Network for Blue Economy Technology Transfer.
He said, “Entrepreneurs are creating solutions to real problems and there’s a great opportunity that investors can come in and bank upon those.”
Blue economy companies are determined to demonstrate that ocean conservation, sustainable fishing, and carbon sequestration can be profitable, especially as global shipping, aquaculture, and the demand for sustainable solutions increases around the globe.
Although most of the discussion in finance has been about green, some investors are beginning to look for blue as the importance of marine resources in combating climate change.
The oceans absorb 93% climate heat and sequester 25% global carbon dioxide emissions. This makes them a key instrument for climate change mitigation.
Some companies are growing Kelp with the intention of producing enough seaweed to permanently sequester carbon dioxide from the atmosphere.
There are increasing numbers of institutional and private investors who are eager to support companies that are already good stewards for the ocean. However, there are still obstacles.
Rotheray stated that awareness of the blue economy is the first issue. He said that investors have a golden opportunity to support businesses that play a crucial role in conserving our oceanic resources. We just need to make it more accessible and understandable.
Banking on blue
Blue bonds are an instrument that has helped to highlight the dire situation of small island developing countries in the face climate change.
They are still quite rare but they are becoming an innovative financial solution to mobilize capital and create sustainable business opportunities for ocean and freshwater conservancy.
The Seychelles issued their first blue bond in 2018, which was named for its support of marine and fisheries projects.
Calvert Impact Capital and Nuveen contributed $15m to the island nation.
Giancarlo Perusso, lead economist for Africa and the former Soviet Union at PGIM Fixed Income said that the success of the Seychelles in protecting an ocean area greater than Germany’s means that it has already tripled UN’s Sustainable Development Goal to protect 10% of coast areas.
Lambert, BlueBay’s CEO, said that the blue economy would be a significant opportunity in the fixed-income sector, particularly the ESG labelled bond markets.
According to Bloomberg data, global green bond sales, including blue carbon bonds have increased by 13% over the past five year. In 2020, $233 billion was sold.
Lambert stated that blue bonds (…) are a growing area due to the UN’s 17 Sustainable Development Goals and the emphasis on impact investing, climate change, and the need for nature-based solutions.
Fiji plans to issue a sovereign bond blue bond in 2022, to raise $100m to invest in a sustainable blue economy, jobs, and protection of Fiji’s biodiversity and ocean.
Rotheray stated that there is a way to make money, but also do a lot for the planet because the ocean covers 70%.

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