Oceans of data

In September 2022 the World Economic Forum (WEF) declared that sustainable ocean investing had become mainstream, noting that USD174.5 billion is needed per year until 2030 if UN is to achieve Sustainable Development Goal 14, Life Below Water.

At the time, WEF said that to capitalise on the momentum in ocean investment the "importance of rigorous tools and frameworks cannot be overstated… Using science and metrics whenever possible, informed by reliable data and in collaboration with subject matter experts, will help build credibility in the ocean investment space".

But those essential metrics and data have failed to materialise, at least according to five major asset managers that have declared "the urgent need for better ocean-related data to make informed investment decisions".

We report this week on an open letter from BNP Paribas Asset Management, Federated Hermes Limited, Mirova, Robeco and Storebrand Asset Management which states they lack the necessary information to help deliver on the Kunming-Montreal Agreement (2022) which set a target to protect large swathes of the world’s biodiversity by 2030.

Governments have explicitly committed to requiring all large and transnational companies and financial institutions "to assess and disclose their dependencies, impacts, risks and opportunities on nature, through their operations, supply and value chains, and portfolios".

But, as the asset managers write, they do not have access to requisite tools to help them make such assessments.

"To help investors make informed decisions, and investment in, companies and activities that are causing or resolving this significant harm to ocean biodiversity and allocate capital in a way that provides solutions to protect biodiversity, credible data, consistent with international standards, are crucial," the letter states.

It appears that just as has been the case with other areas of ESG investment, the demand for action from policymakers precedes the delivery of information on which stakeholders can act.

The Montreal Agreement states that signatories must "ensure that the best available data, information and knowledge, are accessible to decision makers, practitioners and the public to guide effective and equitable governance, integrated and participatory management of biodiversity", but while this is easy to agree to, it is much harder to deliver.

There are initiatives to enhance and expand ocean assets and metrics data for sustainable investing – see the Making Oceans Count project, for example – but, as ever, more needs to be done and quickly.

As the asset managers state, the ocean is the world’s largest ecosystem, covering 71 per cent of the earth’s surface with an annual economic value estimated at USD2.5 trillion. At the same time, "biodiversity and ecosystem services are also the basis of countless new business opportunities".

Perhaps more organisations considering those countless new business opportunities should consider delivering reliable data as a key commercial priority.

Gill Wadsworth, Editor, Institutional Asset Manager

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