Blue Economy Briefing

The latest news on investing to support SDG14

The Clean Oceans Initiative has raised two thirds of its five-year financing target, it announced today. The programme, which aims to finance €2bn in public and private sector projects to reduce plastics in oceans by 2023, has now provided €1.3bn in long-term financing since it was launched two years ago. It has added the Cassa Depositi e Prestiti, the Italian National Promotional Institution and Financial Institution for Development Cooperation, and Spanish development bank ICO as new members.  

The Nordic Investment Bank (NIB) sold SEK1.5bn (€140m) in Nordic-Baltic blue bonds this month. The 5-year notes carry a coupon of 0.1% and were bought by investors including Folksam Group, Svenska Handelsbanken Asset Management, Nordea Asset Management, Robur Asset Management, Skandia Liv and Storebrand Asset Management. Overall, Swedish investors took 95% of the paper. Fund managers bought 69% of the allocation, with 30% going to pension and insurance funds and 1% to retail investors. Proceeds will be spent on “wastewater treatment, water pollution prevention and water-related climate change mitigation projects” linked to the Baltic Sea, which NIB described as “one of the most polluted seas in the world, with eutrophication being by far the largest impact on its ecosystem”. It is the second blue bond to be issued by NIB, who first came to market in 2019. Danske Bank and Swedbank were the arrangers.

Credit Suisse, in partnership with Rockefeller Asset Management, has raised more than $200m for the first impact fund dedicated to ocean health. The Credit Suisse Rockefeller Ocean Engagement Fund, supported by non-profit The Ocean Foundation, follows three key ocean themes: pollution prevention, carbon transition and ocean conservation.

BNP Paribas Asset Management has just launched the first blue economy ETF, to  finance companies working to ensure the more sustainable, long-term use of ocean resources. The UCITS fund will track the Global ESG Blue Economy Index from sustainability specialist ECPI, which comprises 50 large cap companies participating in the blue economy, excluding any involved in systematic violations of the UN Global Compact, arms producers and businesses with more than 10% of their revenues from tobacco, thermal coal, extraction or ‘unconventional’ oil and gas.

Implementing seafood traceability could double the profit margin of fish processors, increase sustainability and reduce investment risk, according to Planet Tracker’s latest report. The London-based think tank’s Traceable Returns explores how the introduction of traceability across the $140bn seafood industry would help verify sustainability claims, avoid exposure to illegal, unreported and unregulated fishing, and reduce product recalls. Whilst it highlighted some companies have been early traceability adopters, more widespread implementation, including investor engagement with seafood processors, is needed, it said.

Another report by Planet Tracker explored how blue bonds could finance an ocean recovery by 2040. 

The Ocean Risk and Resilience Action Alliance has launched its ‘Ocean Resilience Innovation Challenge’. The multi-sector network is  looking for innovative and scalable finance and insurance products that drive investment in coastal natural capital, increase resilience, reduce ocean risk for the most vulnerable, and focus on gender, human rights, and biodiversity, while delivering a return on investment. Applications are open to individual organisations or consortiums across the public and private sectors. Winners will be announced in early 2021.

BNP Paribas, Althelia Funds, the Paul G. Allen Family Foundation and the Prince Albert II of Monaco Foundation have backed a Global Fund for Coral Reefs in collaboration with various UN bodies. One pillar of the fund will focus on grant giving to incubate projects and businesses that help conserve and restore coral reefs, while the other – run by BNP and advised by Althelia – will invest capital to scale those projects up. The strategy has a fundraising target of $500m by 2030.

The Nature Conservancy, the Global Funds for Coral Reefs and Blue Natural Capital are among those to participate in the World Economic Forum’s Ocean Solutions Sprint 2, an initiative looking for projects that accelerate progress towards SDG14. Those considered to have the highest potential will be connected with the investors involved. 

Former head of mortgages and investment management at Lehman Brothers, Ted Janulis, recently launched an investment hub dedicated to market-based sustainable capital to the oceans. The Investable Oceans network will connect private sector investors seeking at market returns with ocean entrepreneurs and businesses. 

Nearly three gigawatts of ocean energy could be deployed worldwide by 2030, with 92% of this from European waters, according to Ocean Energy Europe’s 2030 Ocean Energy Vision report. The industry body said tidal and wave technology could see costs fall to around €90/MWh for tidal stream and €110/MWh for wave energy.