The report explores the critical role financial institutions can play in driving sustainability within ocean-linked sectors, particularly in coastal infrastructure and waste management. It emphasises the growing importance of the blue economy, valued at USD 1.5 trillion in 2010, with projections indicating it could double to USD 3 trillion by 2030. The report outlines key pathways for sustainable financing and highlights the environmental and social risks associated with ocean-related activities.

Coastal resilience: Infrastructure and nature-based solutions

Coastal resilience is essential in mitigating the impacts of climate change, including sea-level rise and coastal erosion. Traditional coastal infrastructure, such as seawalls and flood barriers, can be costly and less adaptable to evolving climate conditions. Nature-based solutions (NbS), like mangroves, coral reefs, and wetlands, offer a cost-effective alternative with additional environmental co-benefits. NbS contribute to climate adaptation and mitigation by reducing flood risks and sequestering carbon. The report encourages financial institutions to prioritise NbS for their adaptability and cost-efficiency, with potential savings of up to 50% compared to grey infrastructure. It recommends financial institutions seek projects that integrate NbS to enhance long-term sustainability and resilience.

Waste prevention and management

Waste management in coastal areas is crucial for reducing marine pollution and ensuring sustainable development. The report identifies the negative impacts of plastic waste and other pollutants on marine ecosystems and local economies. Financial institutions are urged to support projects aimed at waste prevention, recycling, and proper waste management infrastructure. Extended producer responsibility (EPR) schemes are highlighted as a mechanism to encourage corporate accountability. The report recommends investing in technologies and business models that promote a circular economy, such as recycling initiatives and waste-to-energy projects. Financial professionals are advised to challenge unsustainable practices and redirect funding to innovative waste management solutions.

Key environmental and social impacts and dependencies

The report outlines key environmental impacts from unsustainable ocean-linked activities, including loss of biodiversity, degradation of marine habitats, and increased greenhouse gas emissions. Coastal infrastructure projects that fail to consider these risks can exacerbate these issues, leading to significant reputational and financial risks for investors. Social impacts include displacement of coastal communities and violation of human rights in waste management operations, particularly in lower-income regions. Financial institutions are advised to conduct thorough environmental, social, and governance (ESG) assessments before investing in ocean-linked projects.

Criteria for sustainable financing

The report provides a framework for sustainable financing in ocean-related sectors. It suggests financial institutions avoid funding projects that negatively impact marine ecosystems and coastal communities. Instead, institutions should seek projects that align with the Sustainable Blue Economy Finance Principles and promote sustainable development. Key criteria include ensuring projects contribute to biodiversity conservation, support local communities, and reduce pollution. The report also stresses the importance of transparency and stakeholder engagement in sustainable financing decisions.

From risk to opportunity

The transition to a sustainable blue economy presents financial institutions with significant opportunities. By financing projects that promote ocean health, institutions can contribute to global efforts to address climate change and biodiversity loss while gaining long-term financial returns. The report highlights that investment in NbS and waste management technologies not only mitigates risks but also provides avenues for innovation and growth in emerging markets.