Ms. Ngo, protecting the world’s oceans is a concern for more and more investors. What is the background and what is the term “blue economy” all about?
My-Linh Ngo: As carbon sinks, the oceans are of central importance in the fight against climate change. Put simply, they take the greenhouse gas carbon dioxide (CO2) from the atmosphere and thus counteract global warming.
The world’s oceans have absorbed around a quarter of the carbon dioxide that has entered the atmosphere since fossil fuels were used. Phytoplankton is essential here: the microscopic seaweed and bacteria take up about as much carbon as all plants and trees on earth put together. But due to the pollution of the oceans, the plankton eats more microplastics. This means that it binds less carbon.
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The great importance of the world’s oceans for climate protection increases the focus on the “blue economy”. This term refers to all industries that are related in some way to the oceans.
Which sectors benefit from the increasing awareness of the immense importance of the oceans for climate protection?
My-Linh Ngo: So far, investor efforts to promote healthy and sustainably stable oceans have consisted of making companies and governments aware of this issue. In addition, investors are now increasingly focusing on the development of sustainable products and processes. These include, for example, sustainable fishing practices, the development of alternative proteins and efforts to reduce plastic waste in all industries.
Efforts are also being made to reduce marine pollution from offshore oil and gas production and shipping. In addition to companies from the leisure and tourism sectors, companies that offer consulting services on all aspects of sustainable management practices also benefit from the efforts for cleaner oceans.
How do you invest in the blue economy?
Ngo: As part of our high impact investment strategy, we invest in companies that provide solutions to some of the world’s greatest environmental and social challenges. This includes making better use of natural resources – like the oceans.
We only consider companies that offer products with a low environmental impact as well as those that enable a more sustainable use of natural resources. For the latter, the investment universe is currently still limited – but that is likely to change quickly.
What are the challenges of investing in ocean health?
Ngo: It is currently difficult for fixed income investors to get direct access to investments in the blue economy. But ESG-certified bonds could provide a breakthrough. Especially since more and more “blue” bonds are being issued, the proceeds of which are used to preserve the oceans. The focus on the United Nations’ 17 Sustainable Development Goals (SDGs) will also benefit this area.
We also expect growth in the issuance of results-oriented, sustainable bonds (Sustainability Linked Bonds, SLBs) – by both companies and governments. This enables investors to support issuers who have specific measures and goals for protecting the world’s oceans. This positive development should help expand investment solutions beyond niche markets and make them more accessible.
Are there any regulatory or political developments that you are observing?
Ngo: In addition to binding regulations, more and more investors are joining voluntary initiatives and, for example, signing the demands of the Sustainable Blue Economy Finance Initiative. Others, however, support efforts to improve the transparency of investment decisions through initiatives such as the Taskforce on Nature-related Financial Disclosures. Overall, we assume that there will be many more climate-friendly investment opportunities.
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