Private Sector Investment: The Key to Unlocking the Potential of the Sustainable Blue Economy – Blue finance is critical in establishing a sustainable ocean economy, mitigating the effects of climate change and biodiversity loss, and protecting planetary and human health. However, there is still a shortfall in the investment of sustainable and regenerative ocean-related activities. Private sector involvement can provide a solution to this problem. During a panel discussion at the 10th annual World Ocean Summit, experts highlighted how interest in financing sustainable ocean initiatives is growing and emphasized opportunities for private-sector participation. The panelists emphasized that we need a mindset shift when thinking about blue finance and why it’s simply good business for companies to start incorporating ocean considerations across operations. The blue economy, which includes shipping, aquatic foods, valuable materials, and everything in between, has an annual value of roughly US$2.5trn, about 2.5% of global GDP.
According to the panel, the value of the blue economy is likely far larger than previous estimates, as almost all businesses depend on the ocean in some way. The panelists stressed that a sustainable ocean economy, which is necessary to achieve global climate and biodiversity goals, must take into account the averted costs of the alternate scenario: climate chaos that inherently disrupts companies and communities across the world.
Private Sector’s Increasing Recognition of Sustainable Blue Finance as a Viable Investment Opportunity
The private sector is starting to recognize the significance of sustainable blue solutions as demand for investable blue projects is starting to exceed supply. Major industries use ports, and marine energy is now accelerating enormously. The private sector is beginning to heed the warnings of scientists and to pay attention to evolving climate financial regulation that requires and rewards transparent sustainable investing, such as Article 9 of the EU’s Sustainable Finance Disclosure Regulation (SFDR). The regulation has driven institutional capital towards sustainable blue finance. Beyond regulatory drivers, emerging financial mechanisms such as green, social, sustainability and sustainability-linked (GSS+) bonds, which include blue bonds, can also accelerate blue finance.
Creating a Sustainable Blue Economy: The Need for New Partnerships and Mindset Shifts
However, a sustainable blue economy requires new ways of thinking and new partnerships to funnel investments where they’re needed most. Markus Mueller, managing director and chief investment officer of ESG at Deutsche Bank, urged a mindset shift when thinking about blue finance and economic systems in general. Panellists emphasized the importance of radical partnerships, particularly across different levels of financial institutions, to ensure that blue finance reaches the people on the ground and the small- and medium-scale enterprises that drive 90% of economies and 70% of employment.
Private Sector Investment: The Key to Unlocking the Potential of the Sustainable Blue Economy