As the One Ocean Summit wrapped up last week, European public banks pledged €4 billion in ocean finance by 2025 and a major new private sector coalition was formed to mobilize investment increased in marine conservation and restoration projects.
The public financing commitment was led by the European Investment Bank (EIB), the French development agency and the German development bank KfW, as part of the existing Clean Oceans initiative. The Initiative was already striving to raise €2 billion in funding by 2023 and used the summit to announce its ambition to double that amount by 2025.
To date, the Initiative has provided €1.6 billion. It funds projects to address the most pressing sustainability issues facing the oceans, including the mismanagement of plastics and waste water, and estimates that more than 20 million people have benefited from the projects supported to date. Funding is provided globally – not just to projects in Europe – with a focus on regions struggling with issues such as a lack of waste management infrastructure.
The increase in the Initiative’s funding commitments is partly attributable to the increase in its membership. The European Bank for Reconstruction and Development (EBRD) joined the Initiative at the summit held in Brest, France.
“I am proud of the success of the Clean Oceans initiative and warmly welcome the EBRD as a new partner in pursuing our ambition,” said EIB President Dr. Werner Hoyer. “This type of cooperation is key to addressing global challenges and is an excellent example of the value that EIB Global, our dedicated global partnerships arm, can bring. Clean oceans are essential for a sustainable planet.
The EBRD’s decision comes after it pledged last year to align its financing activities with the Paris Agreement temperature trajectories by the end of 2022. It also pledged committed to ensuring that 50% of its investments are in “green” activities by 2025 and will use the EU financial taxonomy to guide accounting.
Private sector action
Also at the Summit, a coalition of business, NGO and government officials launched a new initiative to create and grow a better “ecosystem” for ocean finance. The goal is to unlock more private investment in marine and coastal projects as interest in investing in nature-based solutions grows, with a specific target of $500 million by 2030.
Participating in the initiative are AXA, Bank of America, Willis Towers Watson (WTW) and Palladium, as well as WWF. All of these organizations are members of the Ocean Risk and Resilience Action Alliance (ORRAA), which spearheads the initiative. ORAA receives additional funding from the UK government, the Canadian government and the impact investing platform Builders Initiative.
As part of the initiative, participants will collaborate to create and evolve three new parts of the ocean finance “ecosystem”. The first is a funding facility that investors can use to manage new investments in nature-based solutions in the future. For existing projects, an umbrella facility will be developed to provide technical support.
The third and final part of the initiative will be a risk reduction mechanism, to help develop and deploy insurance products and guarantees for nature-based solutions, making them more investable.
ORRAA said in a statement that it is launching the initiative in recognition that less than 1% of private and public sector climate finance is currently invested in marine and coastal nature-based solutions.
“By aligning business and financial goals with protecting the ocean’s natural assets, we will prevent today’s coastal resources from becoming tomorrow’s stranded assets,” said ORRAA Executive Director Karen Sack. .
“At the end of the day, ocean risk and climate risk equal financial risk and it hasn’t been a problem for 30 years – it’s a problem today. This is how we move from recognizing the need for a radical change in investing to a radical change in how we approach it.
According to the World Economic Forum (WEF), $44 billion – more than half of global GDP – is at risk from nature loss. Similar research by WWF has found that the loss of nature will cost the global economy at least £8 billion by 2050 without transformational action from the public and private sectors, alongside governments.