Cornwall seascape, Sam Mansfield

The ocean is fundamental to all life on earth, but ocean-health receives very little funding. Blue finance can change the fortunes of our seas and help to turn the tide on climate change with corporate help.

James Merchant, Marine Natural Capital Analyst

What is blue finance?

Blue finance means finance for ocean-friendly activities. Examples include habitat restoration, sustainable aquaculture, or developing technology to reduce our impacts on the ocean.

These activities should have a positive impact on the environment and support the “blue” ocean economy, helping to achieve economic and social progress while protecting the health of our seas.

Blue finance can take many forms, such as charitable funding for local initiatives, carbon credits generated by restoration projects or governments selling blue bonds to finance ocean-positive activities.

So far, most blue finance has been charitable, public, or small-scale private investment that doesn't seek returns. However, there is growing momentum to create the conditions and markets to unlock large-scale private finance that delivers attractive financial returns on blue investments.

Why is blue finance important?

The ocean is fundamental to all life on earth but ocean-health receives very little funding.

To fulfil Sustainable Development Goal (SDG) 14 – Life Below Water – the World Economic Forum has estimated that USD $175 billion of blue finance is needed each year up to 2030. Between 2015 and 2019, only $10 billion was invested in total, emphasising that ocean health is massively underfunded.

1

%

global climate finance is spent on the ocean

However, the social and economic benefits of ocean investments are significant. Research suggests that ocean investments deliver economic, environmental and health benefits worth 5 times more than the initial investment. It is therefore in best interests of society to invest in the health of our seas and coastal habitats, and we all stand to gain from scaling up blue finance here in the UK.

Why is it relevant to you?

As well as obvious environmental gains, ocean recovery is relevant from a business, economic and policy perspective, too. Investing in ocean health mitigates business risk, secures socioeconomic benefits, and may ultimately offer financial returns.

Marine ecosystems provide highly valuable services such as provision of raw materials and food, protection against coastal flooding, and renewable forms of energy. Most businesses are dependent on these services in one way or another, so investing in ocean health is safeguarding financial and economic value against risk.

Beyond this, improving ocean health increases the value of socioeconomic benefits our seas can deliver – benefits that boost the economy and support livelihoods.

Through the development of sustainable blue finance markets, financial returns on investment could be generated by monetising the provision of natural services such as carbon storage.

How can blue finance positively impact climate change?

Blue finance brings investment into the ocean - a colossal carbon sink. The ocean absorbs around 25% of the carbon emissions we generate, as well as 90% of the excess heat created by these emissions. Without this, the planet would already be largely uninhabitable. The healthier the ocean is, the better it can perform this life-saving function. So investment into regenerative projects that enhance marine habitats and species will play a key role.

Marine habitats can also play a big role in mitigating the effects of climate change. For example, seagrass and saltmarsh in the UK protect billions of pounds worth of properties and infrastructure in coastal areas against the risk of coastal erosion and flooding as the sea levels rise.

Sand eels in seagrass meadow

Credit: Heather Hamilton

Investment in the protection and restoration of these habitats is essentially an investment in our own protection, wellbeing and economy.

How businesses can get involved

Blue finance is a fast-growing area with a diverse set of stakeholders speaking their own language, so collaboration is very valuable in developing blue finance in the UK and navigating the risks and opportunities it presents.

We're interested in working with other stakeholders within blue finance. Whether you are wanting to understand your risks and dependencies on the ocean, looking to invest in the blue economy, or working to deliver marine recovery and unlock ocean finance, we would like to speak to you and help to speed up progress. Please contact [email protected] for more information.

Our work on blue finance

The Marine Conservation Society wants to scale up private and public finance into ocean recovery and support the development of a sustainable blue economy, where investment is channelled into activities that are regenerative and improve ocean health while delivering socioeconomic gains.

It's important that money flows to the right places, so we offer our expertise on the marine environment to help guide policy makers, investors and financial institutions. We are also working to form an Ocean Finance Alliance – a group of key stakeholders from across the financial sector to help accelerate progress in creating the financial infrastructure, ocean literacy and policy framework needed to unlock blue finance in the UK. Please contact James Merchant: [email protected] if you would like to discuss this further, or alternatively keep up to date on our work by following the Marine Conservation Society on LinkedIn.

Plastic Ocean

Credit: Naja Bertolt Jensen

Further information

If you're looking for more in-depth information about blue finance, we've got plenty of resources available for you to download:

Find out more about how your company can get involved in our work

Corporate partnerships