By Thomas Kostigen
Oceans make up most of Earth’s surface—70 percent—yet there are few investment opportunities in the world’s largest habitat. But that is changing.
As plastic pollution in the seas, plundering fish stocks, sea level rise, and climate change, among other issues, raise the profile of the ocean’s importance, investment opportunities are increasing. Sometimes it takes a series of negative consequences to wake people up to a resource’s necessity and certainly we could not live without our oceans. Investing in ocean projects could be good for the planet and profits.
In terms of importance to the planet: Oceans sequester the most carbon dioxide, keeping our global temperature from soaring even more than it already is; more than a billion people rely on fish as their major source of protein; 97 percent of the Earth’s water is held in the sea; and their rise could jeopardize hundreds of millions of people who live on coasts (630 million by 2100 given current rates of sea level rise, in fact).
In terms of potential for profit, everything from food to fuel to technology can be had. Indeed, marine tech could become the next clean tech. Offshore wind farms, algae-to-fuel production, and precision aquaculture are but a few of the opportunities that exist in the burgeoning sector.
The Sustainable Ocean Fund (SOF) is one of the few pooled vehicles whose mission is to invest in projects that make the oceans healthier and at the same time turn a profit. It invests in sustainable seafood and efficient supply chains; waste and pollution’s upcycle products; infrastructure and coastal resilience systems, and more.
“With the world’s population set to rise to over 9 billion by 2050, future protein demand will need to be met via responsible, traceable and climate smart means. Decades of mis-management has left many ocean assets and in particular fisheries and coral reef ecosystems over-exploited and in a degraded state. Improving the management of these assets can increase productivity, improve operational efficiency and create attractive returns for stakeholders,” SOF says.
The Paulson Institute, an independent think tank, reports there is a huge opportunity to invest in the oceans to reduce the biodiversity gap. The Institute explains that “scientists estimate the world is now losing species at up to 1,000 times the natural rate of one to five species per year.” And given that about half of global GDP is dependent on nature—approximately $44 trillion—protecting nature and valuing it, is in our best interests. “We need a transformational shift in the way markets, and the discipline of economics more broadly, value nature,” says The Paulson Institute.
Investing in companies directly or via funds that promote wild caught fishing, aquaculture, supply chain management, wastewater management, and marine engineering, as well as ocean resilience will help to sustain and grow what is often called the Blue Economy. A thought for exchange-traded fund sponsors: How about an Ocean ETF?
Meanwhile, a good financial advisor can help examine and distill investment opportunities that can promote healthy and sustainable oceans. There could be a lot of green in all that blue.
Thomas Kostigen is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Thomas is a best-selling author and longtime journalist who writes about environmental, social, and governance issues.