Public and institutional investors are being called upon to plough $500m of “crucial” investment into coastal nature by 2030 to support biodiversity and resilience to climate change.
The Ocean Risk and Resilience Action Alliance (ORRAA), formed in 2020 to drive investment into coastal and marine natural capital, has called for a “new generation of investors” to back the ocean by investing into solutions that will accelerate action by mitigating risk and building resilience in coastal communities adapting to climate change.
With 100 days to go until COP26 in Glasgow, ORRAA said private and institutional investors need to partner with public funders to back investments into the ocean and the coastal communities and is targeting $500m of investment by 2030.
Chip Cunliffe, co-chair of ORRAA, said: “We are looking at innovative financial solutions to support biodiversity and resilience to climate change. We believe that developing investable projects and products which deliver financial returns over the long term are key. We are convening the best brains from governments, the financial and insurance sectors, and NGOs to find solutions to protect, preserve and nurture the ocean. And we are always on the lookout for more expertise and backing to drive investment into this space.”
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Most threatened habitats
The alliance highlighted ecosystems such as reefs, mangroves, seagrass beds, wetlands, saltmarshes, beaches and dunes play a critical role in coastal protection against ocean risk, and in sustaining local communities and their economies, yet they are amongst the most threatened habitats on Earth.
“Protecting and regenerating these critical ecosystems requires investment from a combination of private, government, philanthropic and development finance. But a lack of understanding of how investing in nature-based solutions can provide a timely and productive return, underdeveloped finance vehicles and the lack of a pipeline of products have so far restricted significant investment,” ORRAA said.
It also pointed out a “healthy ocean plays a vital role in combating climate change” as the planet’s largest carbon sink.
ORRAA brings together governments, environmental organisations and companies in the insurance and finance sectors to pioneer new investment products and drive investment into ocean focused nature-based solutions. Current members include the UK government, AXA, Deutsche Bank, Willis Towers Watson, WWF, the Canadian government, Swiss Re, Global Resilience Partnership and IUCN.
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Some of the Alliance’s early projects include developing finance products that invest in the research needed to understand the ocean risk landscape as well a improving the financial resilience and adaptive capacity of coastal communities to incentivise sustainable fishing practices, and creating credit initiatives to give a carbon and resilience value to mangroves.
ORRAA is also supporting the development of a new insurance products for coral reefs in the Caribbean, and a new Coastal Risk Index that integrates the protective benefits of coastal ecosystems into insurance risk models.
Karen Sack, co-chair of ORRAA, added: “There is real momentum towards protecting our biodiversity and global resilience through the Ocean – it is in all of our interests. However, investment is crucial. That is why today we are calling for a new generation of financial backers from institutional investors to family offices, and from banks to insurers to put capital to work for the ocean. This will help fight the climate emergency, it will protect coastal communities and it will preserve the assets that people around the world depend on as part of their pensions. It’s a ‘win, win’ but we have to ‘back blue’.”
