The 2022 report published by the Intergovernmental Panel on Climate Change (IPCC) highlighted that solutions to avoid a climate catastrophe are already available, and most are linked to our oceans.
The real challenge is providing financial backing to these innovations and diverting funds towards these areas to help scale sustainable ocean startups and build new business models.
Furthermore, the High-Level Panel for a Sustainable Ocean Economy has estimated that the value of these investments could grow by 500% over the next 30 years, saying that “the potential investment return on the sustainable ocean economy is estimated to grow 500% over the next 30 years.”
The Panel has estimated that every $1 invested in sustainable ocean solutions returns at least $5, meaning a global investment of $3.7 trillion would generate $26.5 trillion in total benefits from 2020 to 2050.
However, financial support and attractive financing conditions are vital to minimise ocean investment risks and provide incentives for climate-resilient activities. Moreover, not all the actions that foster marine recovery create enough market returns to attract private finance. Though private-public partnerships, startup accelerators, or climate bonds are some examples of the different instruments popping up to assure revenues.
The report “Investor and the Blue Economy”, supported by the European Commission, UNEP Finance Initiative and World Wildlife Fund, indicated that marine renewable energy, sustainable fisheries, and blue carbon rank as the best sectors for investing.
Igniting ocean innovation
One of the programs at the forefront of change is the Norwegian Katapult Ocean accelerator, which focuses on early-stage ventures and seeds. It ranked in the list of the best Climate Tech investors for the prestigious report Climate 50 in 2021 and was named the most active ocean impact venture fund in the world since its launch in 2018.
Even governments, state agencies and research institutions recognise the potential of engaging innovators in the Blue Economy.
A strategic stakeholder group runs the Ocean Startup Project in Canada to support new, high-potential ocean startups and encourage existing enterprises to look for opportunities to apply their technology in this field. It is no secret that their goal is to make Canada the ultimate choice for entrepreneurs to start and scale ocean tech startups.
New horizons for investors
There is a tangible increase in interest by investors, insurers, banks, and policymakers to explore the Blue Economy as a new source of prosperity, as the annual economic value of this sector is estimated at $2.5 trillion, equivalent to the world’s 7th largest economy.
The Climate Bonds Initiative is an international organisation working to “mobilise global capital for climate action”. This coalition aims to develop a large and liquid Green and Climate Bonds Market to drive down the cost of capital for climate projects in developed and emerging markets and to support governments seeking to tap debt capital markets. Currently, the only ocean activities included here are marine energy and water utilities projects.
The European Maritime, Fisheries and Aquaculture Fund, introduced in 2021, will support the transition towards more sustainable value chains based on the oceans, seas and coastal activities, including two specific actions, the BlueInvest Platform and the BlueInvest Fund. Among other activities, these platforms nurture and promote innovative, scalable and sustainable business ventures from traditional and emerging sectors of the maritime economy.
Taking stock of new markets
In terms of investment opportunities, there are already trailblazers taking advantage of this new emerging market.
SWEN Capital Partners is a holding of public and private investors for startups delivering solutions to overfishing, pollution and climate change. They have raised €95m for their Blue Ocean fund, including €43m from the latest funding round, from both public and private investors and aim to invest in 20-25 startups.
The Investable Oceans platform is an investment hub with a mission to simplify market-based sustainable ocean investing while accelerating the shift across all asset classes and sectors related to the Blue Economy. They created a one-stop-shop for investors to find relevant, reliable and up-to-date information from this sector and scout for investable projects simultaneously. With no expected yield sacrifice, their database and network only list scalable and profitable projects that would deliver on impact and Return on Investment.
With more ocean innovations on the rise and more financial instruments targeted at the Blue Economy, forward-thinking investors are already catching the waves and harnessing the advantages of being at the frontline of change.
However, a massive shift is needed to ensure we are not too late to keep the oceans healthy and in a condition to provide us with resources, financial benefits and, nonetheless, inspiration for sustainable development.
Article by as content partners Climate Journal and Purpose Content Studio
Authors: Bronagh Loughlin and Szilvia Szabo