Is the sustainable Blue Economy investible?

Main findings:

• Nine out of ten respondents are interested in investments related to the sustainable Blue Economy, with almost half (48%) citing “high interest” in the topic
• Three in four respondents have not assessed their portfolios for their impact on the ocean and 21% are completely unaware of ocean exposure and risk in an investment context
• Almost a third of asset owners do not address the sustainable Blue Economy at all in their current investments, highlighting the need to better inform investors of the importance of securing a healthy and resilient ocean
• The sectors believed to harbor the best investment opportunities are: climate change mitigation and adaptation, tackling marine plastic and other pollution, and supporting sustainable fisheries and aquaculture
• Survey coincides with Credit Suisse’s 7th Annual Conservation Finance Investor conference, held last week in New York

Credit Suisse’s Impact Advisory and Finance Department and Responsible Investor have today published the findings of a comprehensive global evaluation of institutional investor awareness of the Blue Economy and ocean-related investments, entitled Investors and the Blue Economy.  It reveals that while interest in the sustainable Blue Economy is high, to the extent that over a third of respondents see it as being amongst the most important topics of the next decade, industry expertise is low.

The survey shows that while there are already opportunities in early stage, impact and fixed income investments, with infrastructure and listed equity allocations on the horizon, the main barriers for investors continue to be a lack of investment grade projects, no internal expertise and, for asset owners, the fact that their managers do not offer any projects.

There is, therefore, an urgent need to strengthen enabling conditions.  The sustainable Blue Economy could be advanced significantly by creating more sustainable projects with track records, fostering Public-Private Partnerships (PPPs) and scaling investment using innovative finance approaches, such as blended finance, to reduce risk.

Commenting on the survey, Marisa Drew, CEO of Credit Suisse’s Impact Advisory and Finance Department, said:

“In addition to being the largest natural carbon sink on the planet, our oceans are a tremendous source of economic livelihoods for billions of people.  The value of global ocean assets is estimated at over USD 24 trillion¹ making it the 7^th largest economy in the world in GDP terms.  Paradoxically, despite keen and growing investor interest in ocean-related opportunities, the oceans are today one of the least invested of all the UN Sustainable Development Goals, particularly from a private capital point of view.  We expect this emerging investment theme to increase significantly in importance for investors over the coming years.”

Dennis Fritsch, Researcher, Responsible Investor, said:

“The transition from the current short-term, destructive approach to ocean assets towards a more climate-secure and sustainable Blue Economy presents a tremendous economic and sustainable investment opportunity. The public and governments are reacting to the dire state of the ocean; however, not much is known about investors’ awareness of the impact of their investments on the marine environment and how this may subsequently affect their portfolios’ performance and value. Therefore, we wanted to question whether conditions exist for private capital to flow towards a sustainable use of the ocean. And if not, what needs to change.”

These findings come from a qualified and comprehensive cohort of 328 respondents across 34 countries, 53% of which are from Europe.  59% are asset managers, compared with 41% asset owners.  The majority of respondents are listed equity, fixed income and multi-asset strategy investors with AuM of over EUR 50 billion.

Credit Suisse AG

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Disclaimer

This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.  This materail does not constitute an investment recommendation or analysis and was not prepared by the Research Department of Credit Suisse.

¹ Hwoegh-Guldberg O., Beal D. and Chaudhry T. Reviving the Ocean Economy: the case for action.  Gland, Geneva: WWF International 2015