Ocean-linked sectors such as fishing, shipping and marine tourism are among the major arteries of the global economy, providing food, goods, and livelihoods to billions of people worldwide. Due to declining ocean health, climate change and its accompanying social impacts, this ‘blue’ economy is at risk of faltering if it is not rapidly transitioned towards sustainability; towards one which is anchored in the intertwined principles of economic viability, environmental stewardship, and social wellbeing. Indeed, blue economy industries should aspire to be both sustainable and equitable.
Women, indigenous groups, local communities, and youth are integral to ocean-linked sectors, providing much of the workforce, consumer base, land rights and local knowledge needed to power them. However, these groups are often overlooked in financial decision-making. Major power imbalances significantly underrepresent and marginalize them at decision-making levels, undervaluing their contribution and jeopardizing their rights and needs. This is a critical issue, exacerbating inequalities and driving ocean sectors ever further from being sustainable. To address these challenges, the transition of ocean-linked sectors to sustainability needs to be one based on the three pillars of social equity: stakeholders’ full recognition, meaningful participation and fair distribution of costs and benefits (Bennett et al. 2021).
Benefits of a healthy ocean
Maintaining a healthy ocean through sustainable business practices has clear economic, environmental and social benefits:
- Economic benefits: ocean-linked sectors are estimated to contribute US $1.5 trillion in value-add to the global economy, supporting around 31 million jobs. In fact, two-thirds of the global economy is moderately or highly dependent on ocean resources. So, just from a direct market logic, ecosystem services and resources delivered by the ocean are highly valued in the global economy.
- Environment & climate benefits: ecosystems such as coastal wetlands, mangroves, and coral reefs are crucial for blue economy activities, playing a critical role in biodiversity conservation, and climate regulation, being natural carbon sinks.
- Social benefits: the ocean supports the livelihoods of more than 3 billion people across the globe, with seafood being a vital source of protein for 3 billion people – a food source which women play a key role in securing.Moreover, the ocean also holds cultural and spiritual values linked to local identities and traditional practices.
The resilience and long-term sustainability of marine industries is thus fundamental in economic, environmental, and social terms, and is instrumental in achieving the UN Sustainable Development Goals linked to poverty, food security, and climate action.
A just transition
A sustainable blue economy will only deliver if human wellbeing and justice are placed at its core. A ‘just’ transition must focus on social equity – placing people at the center of existing and new developments in the ocean space. However, social groups are often marginalized or left at the fringes of ocean-linked decision-making. Local communities, indigenous groups, youth, and women must take center-stage. For instance, in fisheries and coastal tourism, women represent the majority of the workforce, however they are most often in the low-skilled, low-paid, least-stable, and informal jobs with little to no representation at the decision-making level.
Thus, often those who have most to lose from unsustainable ocean practices do not have representation for their concerns, needs and rights, and are not able to directly contribute to effectively identifying both the problems and the solutions. Without these voices being heard, efforts to transition towards sustainability can stagnate or be mis-guided, with the benefits unevenly shared across society.
A social lens for ocean-linked financial decisions
Through their investment, financing and underwriting decisions, financial institutions can play a critical role in embedding social equity across ocean-linked sectors. Pioneering financial institutions are already proactively working to accelerate the sustainable transition of the blue economy through UNEP FI’s sustainable blue finance community, and social equity can be both the keystone and ultimate consequence of success.
Leading UN-published guidance is already in the market on how private finance can sustainably engage with sectors such as shipping, seafood, coastal tourism, marine renewable energy, ports, coastal infrastructure and waste management. As financial institutions approach these major ocean-linked sectors, they could be encouraged to adopt an explicit social justice framing for their financial decisions.
Examples of how financial institutions can take practical action include:
- Signing the Sustainable Blue Economy Finance Principles: these take a holistic approach and include a social lens, committing financial institutions to “support investments, activities and projects that include, support and enhance local livelihoods, and engage effectively with relevant stakeholders, identifying, responding to, and mitigating any issues arising from affected parties.”
- Client engagement: when engaging with clients on a project, financial institutions can ask for guarantees of local engagement through participative decision-making processes in all phases of the project.
- Strengthening accountability and transparency: strengthening accountability and reporting mechanisms with clients to obtain better information about supply chain activities and to avoid financing abuses, human rights violations, and injustices; a known issue in some ocean-linked sectors.
- Gain inspiration from peers: One recent case study by Climate Fund Managers and ST International, is a wind farm project in Vietnam’s Mekong Delta. The project includes a long term Community Development Program, designed with all project-affected persons to restore livelihoods, improve access to clean drinking water, build livelihood resilience through climate-smart aquaculture and agriculture, and mangrove restoration. Discover more case studies here
“When it comes to thinking about a just transition to a sustainable blue economy, people matter. We need to think about those who reside in coastal communities, such as small-scale fishers, women and Indigenous Peoples, who often have a high reliance on the ocean for food, jobs and well-being. When investing in the blue economy, financial institutions should put themselves in the shoes of the estimated 2 billion people who live on the coast and imagine how their economic investments and activities will impact people’s lives, their livelihoods, their food security and their communities.”
– Dr. Nathan Bennett, Chair of the Ocean and People Specialist Group of the Commission on Ecological, Economic and Social Policy of the International Union for the Conservation of Nature (IUCN)
A successful ‘just’ transition for ocean-linked sectors will of course take efforts across all strands of society. As well as action from the financial sector, policy makers need to create further incentives, eliminate harmful subsidies, build an enabling environment and add a social lens to public finance linked to the ocean economy. Regulation and enforcement will play a role, as will civil society which is critical in highlighting potential risks and social injustices taking place. Multilateral development banks and funds can also support this transition by de-risking sustainable ocean investments through blended finance vehicles.
We have an opportunity to improve our approach to ocean resources and adopt an explicit social equity lens in all ocean-related financing decisions, and we can accelerate action together. Collectively, so much more can be done to unlock the potential of an inclusive blue economy – to the benefit of society, climate, nature, and economies. We encourage banks, insurers and investors to join our community and get started.
Article written by Ana Lucía Londoño Ramirez for UNEP FI
Want to learn more? Listen to our podcast on the topic
Including social equity considerations in investment decisions and processes is critical for the blue economy to deliver its full potential in addressing global challenges. In this episode, we look at the human dimension of the sustainable blue economy, focusing on the role of financial actors. Five experts from the academic, NGO and finance communities join the conversation, giving insights on how organisations can finance a blue economy that is sustainable, economically viable, and socially equitable.