Our oceans are a lifeline for many communities and economies around the world. Over 3 billion people depend on marine and coastal biodiversity for their livelihoods. With ocean goods and services having an annual tangible and proven value of US $2.5 trillion—equivalent to the world’s seventh-largest economy—working toward a sustainable blue economy is not just a conservation imperative for planet, people, prosperity, and peace, but also an attractive financial opportunity for investors, banks, businesses, and policy-makers.
Businesses whose supply chains are intertwined with the ocean also face increasingly severe risks if a business-as-usual trajectory continues. By extension, the finance sector is also exposed to these ocean-related Environmental, Social, and Governance (ESG) risks. The reality is that blue economy sectors are heavily reliant on nature remaining intact and climate change being kept to within the limits set out by the Paris Agreement and subsequent climate negotiations.
Seafood is one of the sectors that is most impactful to and impacted by these threats and challenges. Last year, research commissioned by WWF estimated that over two-thirds of publicly listed companies globally – including seafood, shipping, tourism, port development, or marine renewable energy companies – are in some way exposed to the risks of declining ocean health with an overall value at risk of over US $8.4 trillion. The risks are extensive—and growing.
The New York stock exchange delisted a company that reportedly failed to comply with new US regulations around human rights and illegal, unreported, and unregulated fishing. As a result, the share price of this company has plummeted, trading at nearly 99% less than before the de-listing, rendering it effectively worthless. Other banks and investors may be exposed to a range of other risks stemming from overfishing, illegality, habitat conversion, labor abuses, and disease, to name a few.
Shifting capital towards the sustainable blue economy
WWF is working with partners to raise awareness of these risks and provide the finance sector with the tools and resources they need to allocate capital to sustainable seafood businesses.
We’re in close collaboration with UNEP FI through the Sustainable Blue Economy Finance Initiative (SBEFI) and co-convene a Seafood Finance Working Group of over 90 professionals from all part of the finance sector. The group includes major global lenders such as Rabobank and Standard Chartered and BNP Paribas and asset managers such as Rockefeller and DNB. It also includes impact investors, development finance institutions, NGOs, academia, and other thought leading organizations.
In addition, WWF is working with the Seafood Finance Working Group to develop targets and implementation methodologies to help financial institutions implement the UNEP FI Seafood Guidance (published in the Turning the Tide report in 2021), and end capital flows that support illegal or over-fishing and habitat conversion, among other issues, and report on progress. UNEP FI’s SBEFI uniquely offers financial institutions (FIs) the chance to publicly report on activities and actions taken to support the sustainable blue economy1.
Our vision for a healthy ocean and thriving blue economy
Good data supports even better advice, so WWF is also undertaking a baseline study of the current performance of banks and investors from all over the world on their seafood related policies. This will provide a way for FIs to see how they are performing against their peers and get the support they need to make improvements, fill gaps, and minimize or mitigate risks. Seafood businesses making the responsible choices, and fishery resource owners around the world will ultimately benefit.
There is increasing attention on the finance sector to focus on nature and climate-related risks and impacts, for example, through the recently launched Task Force on Nature Related Financial Disclosure (TNFD). Other strategic initiatives have emerged, such as the Nature Action 100, a new global shareholder engagement strategy launched at the Biodiversity COP in late 2022 which allows investors to drive urgent action on the nature-related risks and dependencies they are exposed to through the companies they own. WWF, alongside partners and collaborators, is working to make sure that ocean-related risks and impacts are not left out or left behind. As such, businesses operating in the global ocean must begin to identify, measure, mitigate, track, and report on progress towards becoming nature- and climate-positive.
“Business and finance need an integrated solution to the joint nature-climate crisis. We are aiming for a world in which ocean-related businesses are striving towards high ESG performance, traceability back to source, and clear and transparent reporting of risks and impacts, and that, as a result, banks and investors will reward them by allocating capital where it can provide the greatest return with the least impact.”Lucy Holmes, Senior Director, Blue Finance, WWF US
The true potential of the blue economy can only be realized if our ocean’s health is secured through a nature- and climate-positive approach—one that replaces the idea of the managed decline of our natural world with one that taps into the potential of businesses to transform corporate stewardship with new modes of working to restore nature.
Companies can transform their corporate stewardship with new modes of working to restore and protect nature. The risks are many but so are the opportunities. Through a nature-positive approach, we can secure our ocean’s health and achieve a sustainable blue economy that provides social and economic benefits for current and future generations; restores, protects, and maintains diverse and productive marine ecosystems; and preserves nature.
1 UNEP FI are the secretariat for the Sustainable Blue Economy Finance Principles, established by WWF, the European Investment Bank, the European Commission, and the World Resources Institute. The Initiative currently has over 70 signatories and members representing over US $11 trillion in assets under management.