The sustainable investor for a changing world

Blue economy
Forward thinking | Article - 2 Min

Securing the future of the blue economy

Our planet is largely blue for a reason: it has an abundance of water. The oceans are a huge source of resources and are also a key battleground in the struggle against climate change. Securing the ocean requires investment and collective action by political authorities and a wide range of stakeholders including investors and consumers. Everybody can play their part.

We all rely on the oceans for climate change mitigation: the ocean absorbs 90% of the excess warming resulting from human activities, it produces 50% of the oxygen on our planet and it sequesters 30% of global carbon-dioxide emissions. The ocean is also a vital source of resources. It provides a livelihood for millions and food for billions, as well as key minerals, an abundance of potential energy and the ingredients that create life-saving drugs.

There are signs, however, that the ocean is struggling to cope. The mean ocean temperature rose to a record 21.1C in March 2023 and remained high for 42 days, baffling scientists. Excess CO2 in the atmosphere has caused ocean acidity to increase by 30% over the past 200 years – faster than any change in ocean chemistry for 50 million years. This affects ocean life and its role as a carbon sink.

The ‘blue acceleration’ – the rapid industrialisation of our ocean since the turn of the 21st century – also threatens its health. For example, over a million kilometres of fibre-optic cable has been laid, over 9,000 oil platforms constructed, and scores of offshore wind farms created.

International policy, however, is evolving to protect the world’s waters. Recently, two policies tackling these issues have stood out: the UN High Seas Treaty and the UN Treaty on Plastics. The UN High Seas Treaty, signed in March 2023, aims to hold countries accountable for their actions on the high seas. Under the treaty, protected marine areas can be formed, genetic resources shared equitably and environmental impact assessments conducted.

Progress has also been made towards a binding agreement to combat plastic waste. A new worldwide instrument that would have legal force and end plastic pollution is currently being negotiated, with adoption targeted by 2025.

However, far more needs to be done to secure the ocean. The development of a sustainable blue economy requires a focus on sustainable fishing and aquaculture rather than overfishing, on protecting and promoting coastal ecosystems that capture carbon, and enhancing the value of natural assets and tourist attractions.

What we have done

As investors and stewards of the assets of our clients, we believe we have a role to play in contributing to the sustainability of marine ecosystems.

Our Sustainability Centre’s stewardship team has taken steps to conserve horseshoe-crab populations by asking 14 pharmaceutical companies to stop using horseshoe-crab blood to test for endotoxins. Horseshoe crabs are used to test almost every vaccine, injectable drug and medical device implanted in a human. By using a regulator-approved synthetic alternative, horseshoe-crab species have a better chance of recovering.

And in line with our approach to sustainability-related investing, we offer a blue economy exchange-traded fund (ETF) that invests in five ocean-related themes: energy and resources, pollution reduction, fish and seafood, maritime transport, and coastal life. This includes investing in salmon farmers who help reduce pressure on wild fish stocks, cut pollution and chemical waste, and reduce greenhouse-gas emissions.

To find out more about investing in companies that are contributing to the development of a sustainable blue economy, view our Blue Economy ETF.


    Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns. Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.
    Environmental, social and governance (ESG) investment risk: The lack of common or harmonised definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, (the Sub-Fund's) performance may at times be better or worse than the performance of relatable funds that do not apply such standards.

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