Mobilising blue finance and achieving a truly sustainable blue economy rests on clarity and action from government

Recent commitments to protect our marine ecosystems are welcome, but they must be backed by real action to drive blue finance into the conservation and sustainable use of our oceans.

Last week’s One Ocean Summit in Brest produced a crop of fresh promises to restore the world’s oceans and create a sustainable ocean economy. 30 more countries joined the 73 nations already signed up to the High Ambition Coalition for Nature and People, committing to protect 30% of the world’s land and sea by 2030. Meanwhile the UK joined 42 other countries in pledging to conserve biodiversity on the high seas.

These announcements will now need to be matched with real action and delivery, including implementation of stronger protections for our seas. But we also desperately need to get finance flowing to conserve our seas if these commitments are going to translate into impact.

Several European development banks pledged  to unlock €4bn of ocean finance by 2025, a much needed positive outcome from the summit. However, recovering marine ecosystems globally requires an estimated  $175bn annual investment in the conservation and sustainable use of our oceans. Current investment stands at just $25bn.

Private finance represents the largest available pool of money available to rapidly address the crisis in our oceans. We need to ensure private capital is redirected away from supporting unsustainable activities, such as offshore oil and gas extraction, towards sustainable activities that protect marine ecosystems.

However, developing markets in conservation and putting monetary values on nature is a controversial and potentially risky approach. This is a particular concern without robust standards and regulation to ensure finance is delivered at the local level, where it will be most effective, and leads to measurable, lasting improvements for nature and local communities.

Currently there is limited consensus over standards for sustainable finance in the ocean – finding this consensus and developing robust regulation should be a priority. This also needs to be backed by clear leadership from government to signal that marine protection and the sustainable use of our oceans is a genuine priority. 

What is blue finance?

Blue finance typically refers to investment in activities in the ocean which are considered ‘sustainable’. It can also include investments which encourage the development of new ways to use ocean resources sustainably.

Blue finance investments might range from offshore wind farms to new sustainable seaweed farms and the development of ecotourism. Growing carbon credit markets are also delivering blue finance to projects restoring ‘blue carbon’ habitats like mangroves or seagrass meadows. Environmental think tank Planet Tracker have even proposed that ‘Blue Recovery Bonds’ could finance the recovery of fish stocks, by encouraging fishing companies to accept a voluntary decrease in the fish they catch over a set period.

Financing marine protection and conservation is perhaps the biggest challenge of all. A clear financial return on investment makes it difficult to attract private capital. Limited finance is a key factor for why many marine protected areas (MPAs) end up as ‘paper parks’ with little enforcement and monitoring activity.

Multiple efforts are underway to develop and scale new mechanisms for unlocking private cash for ocean protection, including ‘blended finance’ that combines public and private finance. Last year the Government of Belize agreed a ‘Blue Bond for Ocean Conservation’ that combines public and private capital. It could deliver an estimated $180mn for marine conservation.

The need for clarity

Recent years have seen the development of various principles and standards for blue finance, such as the UN Environment Programme’s (UNEP) Sustainable Blue Economy Finance Principles and the International Finance Corporation’s Guidelines for Blue Finance.

However, consensus around a shared set of rules and principles that define sustainable investment in the ocean is still lacking. This lack of a definition remains a major barrier for investors: sustainable finance depends on clear guidance on what does, or does not, constitute sustainable investment.

For instance, the sustainability of some marine eco-tourism activities has been questioned, especially where the impacts of tourists on ecosystems and protected areas are poorly monitored.

Building offshore wind farms can also have significant impacts on marine life – potentially a catch 22 for sustainable finance. More research is needed to understand and mitigate those risks to protect the marine environment, including development that involves ecologists and local communities and accounts for ecological health and migration patterns.

Therefore, agreeing and adopting common definitions and guidelines among stakeholders will be critical for cutting through the confusion and bridging the blue finance gap. As the need for blue finance grows, this will become more important.

Direction from government

Ultimately, markets can only go so far without direction and regulation from government to protect the ocean and create a more sustainable economy.

Governments are increasingly vocal about the need to shift financial flows into green energy, electric vehicles, and other sustainable investments to meet net zero, and they are putting in place policies and standards to make that happen. Similar clear signals on the need for more sustainable investment in our oceans, backed by the promise of regulation, could help shift the dial away from unsustainable activities and build consensus on what counts as sustainable.  

Governments also need to demonstrate through actions that their promises to protect the ocean are meaningful. In the UK, while there has been great success driving investment into offshore wind, the continued support and approval of offshore oil and gas projects sends all the wrong signals to investors and other stakeholders.

Likewise, the granting of fishing licenses for bottom-trawling in protected areas is in direct contradiction of the Government’s global action on ocean conservation, as is its continued setting of fishing quotas above sustainable levels. As we have highlighted in the past, the UK’s failure to end destructive fishing undermines its claims to climate leadership. It also sets us in the wrong direction when it comes to creating a sustainable blue economy.

At Seahorse Environmental, our Ocean Practice works with clients including Greenpeace and BLUE to drive much needed action on the protection and sustainable use of our oceans. If you are part of an impactful campaign, NGO or business which is also looking to be part of the solution, please do get in touch with us at ahammond@seahorseenvironmental.co.uk.