Monaco Ocean Week and the blue economy
31 March 2022
6 minute read
Investing in Ocean Innovators
Barclays Private Bank is proud to have sponsored Monaco Ocean Week 2022, which brought together international experts, the scientific community, voluntary sector, public authorities, and private actors, to share findings on marine environment issues, and to take action to preserve our ocean.
As part of the ‘Ocean Innovators Platform’ event, Damian Payiatakis, our Head of Sustainable and Impact Investing, hosted a panel session with guest speakers including:
- Jean Castellini, Minister of Finance & Economy of Monaco
- Jonas Skattum Svegaarden, CEO of Katapult Ocean
- April Crow, VP External Affairs and Investors Relations, Circulate Capital
- Mark Schrope, Director, Schmidt Marine Technology Partners
Why invest in the blue economy?
To coincide with the event, we asked some of our panellists to explain why investing in a sustainable ocean is so important to them.
Personally, why is investing in our ocean important to you?
"I spent almost 20 years leading sustainability efforts at Coca-Cola. I learned about the challenges facing our ocean, especially as it related to plastics long before most were aware. I’ve seen the impact first-hand, travelling to every corner of the world. While philanthropic efforts are important, in order to have real impact towards solutions, we need significant investments in innovation and infrastructure."
"I’ve spent my whole life in and around the ocean. Growing up, almost everything we liked to do was ocean-focused, from fishing to surfing. As an adult, I went on to study oceanography and do open ocean research, before shifting to journalism where I focused mostly on ocean stories. So, I’ve personally seen what we’ve lost in terms of ocean health in countless ways. While there are huge, complex challenges, we are at a point where it’s completely feasible to envision technologies deployed at large scale to address these problems."
Relative to other sustainable or green sectors, why should investors look at the sustainable blue economy?
"The ocean plastic crisis is worsening every day, damaging various industries, such as fishing and tourism, on top of accelerating climate change and biodiversity loss. The good news is that research shows that an 80% reduction of plastic waste leakage is possible by 2040 by scaling existing technologies, if we combine upstream and downstream solutions to achieve system change1. By investing in the circular economy for plastics, investors have the opportunity to help solve the plastic waste issue and help fight climate change, while capturing the economic value of plastic."
"First, as I mentioned, we really are at a unique point in history where we are ready to build blue technologies and deploy them relatively affordably at the global scale. Of course, there will be challenges in building markets, but the potential markets are huge. Second, among investors at all levels, there is growing interest in sustainability, and addressing climate challenges through technologies. In the ocean, there are countless opportunities to do both at the same time."
Within one particular area where you’re active, what’s the business/financial case for investors?
"Being the first fund dedicated to preventing plastic pollution and advancing the circular economy in South and Southeast Asia, we identified the following five points as the key factors driving our investment decisions in the waste management and recycling value chain:
- The global demand for high quality recycled material is growing, supported by global brands’ commitments and new regulations aiming at reducing plastic pollution
- The sector is underfunded, so there is low competition for deals and reasonable valuations
- Many of the companies are profitable today with attractive operating margins
- We see potential for revenue growth in the range of 8-10x over the next 5 years
- We see strong ESG value in the sector, as each investment creates social and environmental impact, including preventing plastic pollution, avoiding CO2 emissions and supporting local communities’ livelihoods"
"I’ll pick an area we refer to as habitat health, which focuses on restoring things like estuaries, coral reefs, or kelp forests. One major issue that really affects all three of those is the nutrient pollution that comes from run-off, human waste, and fertilisers. Dealing with the root causes is challenging and expensive, but there are a range of new opportunities coming, and there are large markets ready for them.
In areas like my home, near Indian River Lagoon in Florida, there is substantial local, state, and national funding to address devastating ongoing declines. But they need better solutions than have been available. A growing number of individuals are willing to pay a premium for technologies that reduce their personal impacts. Farmers also want to solve these problems because conventional fertilisers are expensive."
Relative to other Sustainable Development Goals, SDG14 (Life under Water) receives less mainstream attention and investment. Why do you think that’s the case?
“'You only protect what you love' said Jacques-Yves Cousteau. Unfortunately, it is highly difficult to comprehend what is happening under water. We’ve all seen images of the impact of plastic pollution on marine life, but it is very challenging to measure the magnitude of this impact. That’s why, beyond our investment work, we’ve also partnered with non-profit organisations, such as Ocean Conservancy and The Circulate Initiative, to support the production of reliable data and research to help identify gaps to solving the plastic pollution problem, prioritise strategies, set baselines and targets, and measure the success of investments and interventions."
"I think it’s a relatively new area for investment, which means people are naturally less aware of the potential and the opportunities. There have certainly been ocean-related investment opportunities in the past, but far fewer than now. I also think that for many people, the ocean is out of sight, out of mind. Even if they live near the ocean, they might not see much more than a coastline. If they live inland, they may not be aware of the benefits they receive from the ocean, or that they are directly connected to it through their waterways. All of that means they’re likely unaware of both the needs and opportunities."
How our sustainable strategies invest in the ocean economy
At Barclays Private Bank, our sustainable strategies2 invest in a number of companies that support our ocean as part of a broader portfolio of sustainable activities. These include:
- A global science and technology group, which owns a developer and manufacturer of tools to measure oceanographic parameters. Their products are being used globally to assess the impact of climate change on ocean ecosystems.
- A global leader in digital reality solutions that is collaborating with a non-profit marine conservation organisation to map endangered seagrass meadows in the Caribbean. These meadows are powerful carbon sinks and could be crucial in solving a range of environmental challenges.
- A speciality chemicals company that is developing sustainable active ingredients for personal care products from the ocean, such as marine algae and collagen amino acids.
By combining traditional investment practices with ethical parameters, environmental, social and governance (ESG) factors, and positive UN Sustainable Development Goal alignment, our sustainable strategies offer clients a way to achieve their financial objectives while moving towards a more sustainable future.
Contact your Private Banker for more information.
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