Credit: Anastasia Taioglou
The Ocean is the planet’s largest carbon sink and has absorbed over 90 per cent of the heat from carbon emissions – with significant negative impacts on its biochemistry and biodiversity. Marine and coastal natural capital are also critical resilience buffers, reservoirs of biodiversity, and provide food, social, and economic security to billions.
In an effort to both protect the Ocean and increase investment into schemes that support the blue economy, which encourages better stewardship of the Ocean’s resources, The Ocean Risk and Resilience Action Alliance (ORRAA) is launching the #BackBlue Ocean Finance Commitment just days ahead of the start of COP26, the crucial climate talks taking place in Glasgow, UK.
ORRAA brings together finance and insurance sectors, governments, and environmental organisations from across the world. It is leading global efforts to pioneer new and innovative products designed to drive investment into ocean focused and nature-based solutions, fundamental to tackling the threat of climate change, protecting biodiversity, and building resilience in the face of the climate crisis.
The newly announced United Nations-backed Commitment – which is the first of its kind to focus on the Ocean – is designed to incorporate the Ocean in finance and insurance decisions, especially with its importance in the fight against climate change. With initial commitments from leading financial institutions including Palladium and Bamboo Capital Partners, Palladium’s asset management arm, ORRAA expects more signatures in the coming weeks.
“Climate risk and ocean risk together equal financial risk. That is why this private sector #BackBlue Ocean Finance Commitment is so important as a mechanism for enabling positive change,” notes Karen Sack, Executive Director and Co-Chair of ORRAA.
#BackBlue’s goal is to support raising an initial USD 500 million of investment into coastal nature by 2030 to create scalable and investable finance and insurance projects and products in the blue economy.
“This really is in everyone’s long term interest and so we are calling on other financial institutions to sign up. The climate emergency is Code Red for the planet – responding to that requires us to #BackBlue,” adds Sack.
The initiative, which also received backing from the UN Race to Resilience, the World Economic Forum, Friends of Ocean Action, the IUCN and UNEPFI, will ensure that the challenges posed by ocean risk can be met by pioneering new and innovative finance products that focus on driving investment into ocean and coastal natural capital that reduce risk and build a sustainable, equitable, resilient ocean and regenerate its biodiversity.
As Jose Maria Ortiz, Palladium Managing Partner, highlights, achieving net zero will require all sectors to act together, including those in the blue economy, further underscoring the importance of initiatives such as #BackBlue. “The net zero transformation will require the energy sector, the agricultural and forestry sectors, the activation of the blue economy, the value of nature, and the mobility sector as part of the solution, and most importantly they all need to complement each other to truly deliver the outcome we need,” he says.
Additionally, #BackBlue will continue to drive decision making in the sector by joining one of the UN Race to Zero Financial Initiatives, driving financial system policy change by adopting corporate ESG standards and disclosures that align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and adopting taxonomies on sustainable economic activities that define common and clear criteria for classifying projects and investments as sustainable.
By investing in nature-positive outcomes for the Ocean, based on the UNEP FI Sustainable Blue Economy Finance Principles, #BackBlue will help drive investment into coastal and marine nature that halts biodiversity loss and sustains and builds the benefits that these ecosystems provide while preserving and improving coastal livelihoods.
Ultimately, ORRAA and the #BackBlue initiative aim to accelerate the transition towards a healthy and sustainable ocean through lending, investment, and insurance practices that mitigate ocean risk and build the resilience of climate-vulnerable coastal communities.
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