If they were a country, the oceans would be the world’s 7th largest nation, according to the OECD. Protecting them is an urgent challenge.
The Mediterranean is overheating, and the North Atlantic Ocean has experienced an extreme marine heat wave in recent months, with temperatures in some areas five degrees higher than average. Surface temperature records are 0.7 degrees higher than ever before. While this difference may seem insignificant, the rise in temperature is leading to a significant reduction in oxygen. By 2080, nearly 70% of the oceans could be oxygen-depleted, according to a group of researchers from Shanghai University. This consequence of climate change will cause major environmental disruption, with a quarter of CO2 emissions absorbed by plankton, the disappearance of aquatic species and economic hardship for the people who live off them. All marine biodiversity will be affected. Everywhere on Earth, the situation is the same. The climate crisis and the erosion of biodiversity are intertwined, accelerating and intensifying.
These major challenges of our century are also changing the equations for companies and financial markets. Listed impact investing has seized on this and we are convinced that its role is decisive in draining capital towards companies committed to the climate and biodiversity. With just 3% of impact investment assets under management per year directed towards biodiversity, the needs required to safeguard it would be covered.
According to the OECD, if the oceans were a country, they would be the world’s 7th largest economy, with annual production of Blue Economy goods and services representing an annual GDP of $2,500 billion.
Given the convergence of these challenges, we believe that all sectors of the economy need to be on board. Helping companies, whatever their sector of activity, to initiate or accelerate their climate and environmental transition is vital for impact investment funds, and all the more important given that over 50% of global GDP depends on biodiversity, according to the World Economic Forum.
Among the most pressing issues is the preservation of the oceans, keystones of the climate system and sources of 50% of the planet’s oxygen production. Impacted head-on by global warming, they also receive 100% of terrestrial chemical pollution, as well as chemical, mercury and plastic waste, of which 8 million tonnes are dumped into the oceans every year. The stakes are therefore vital, colossal and strategic. While the challenge is ambitious, asset management is committed to meeting it, by supporting companies that are already offering innovative solutions to protect our marine ecosystems.
This is the case, for example, of VOW, the Norwegian leader in shipboard water and waste treatment solutions. The company has developed a technology that treats waste and purifies water from cruise ships, aquaculture and land-based industries. Another major player committed to marine biodiversity, Sweden’s Alfa Laval offers unique technological solutions for the treatment of ballast water, which large ships use to balance their weight and remain stable during their travels.
Once discharged, they can release invasive species, responsible for the decline in marine biodiversity. This ecological threat is a global scourge: almost 10 billion tonnes of this water are transported around the world every year, and 7,000 aquatic species are transferred every hour. Solutions from Corbion, a major player in the agri-food sector, are helping to curb overfishing. This Dutch specialist is developing a seaweed-based oil that reduces the pressure on marine biodiversity by replacing fish oil derived from fishing. This innovative solution contributes to the preservation of marine biodiversity, as the majority of farmed fish are fed on fish caught at sea.
According to the OECD, if the oceans were a country, they would be the world’s 7th largest economy, with annual production of Blue Economy goods and services representing an annual GDP of $2,500 billion. The levers for action exist in the face of this systemic and strategic challenge for the global economy. The impact investment market is estimated to have over a billion dollars in assets under management, a symbolic figure that highlights the decisive role of impact finance in meeting this challenge. There is still time to act, by intentionally directing this capital towards innovative initiatives.
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Source: Allnews| 27 Juil 2023 | Luc Olivier, La Financière de l’Echiquier.
Luc Olivier, CFA, financial and SRI analyst
Graduating in finance from EDHEC in 2017, Luc completed several internships as an SRI analyst at EthiFinance as well as La Financière de l’Echiquier and then joined Exane in London as a financial analyst. Luc joined La Financière de l’Echiquier’s management team in August 2017 as a financial and SRI analyst.
A corporate investor for over 30 years, La Financière de l’Echiquier (LFDE) is one of France’s leading entrepreneurial asset management companies. A specialist in European and international stock selection, LFDE has developed a range of responsible and thematic solutions. Present in Switzerland since 2010, LFDE manages 14.5 billion euros as at 31.12.2021.