News|14 Oct, 2021

Trillions in assets at risk due to declining ocean health and climate change

Screenshot 2021-11-17 093938
  • Urgent action from business, governments and financiers can avoid losing US$8.4 trillions (£6.19 trillion) in ocean-based investments
  • New tool launched to help investors identify ocean-based stranded assets
  • WWF calls for ocean finance to be included in climate finance at COP26 as we can’t keep global temperature rise to below 1.5oC without healthy oceans

A new report published today (14 October) finds that investors in 66% of listed companies are collectively at risk of losing US$8.4 trillion (£6.19 trillion) due to declining ocean health and climate change if the present ‘business as usual’ scenario continues. Even keeping global temperature rise to 2°C will result in losses of US$3.3 trillion (£2.43 trillion), which reiterates the importance of keeping global temperature rise to the Paris Agreement target of below 1.5oC.

The report, published by WWF and Metabolic, concludes that the financial sector needs to better assess ocean risks in their portfolios and must pivot away from investments that damage the ocean environment to sustainable business models. 

Repairing damage to the ocean will revive one of the world’s greatest assets and largest carbon sinks, without which it will be far harder to limit global temperature rise to below 1.5oC.

This ground-breaking new financial model quantifies how changes to the physical and policy environment impacts on assets and revenues relating to the global blue economy. It shows that in the next 15 years damage will increase to coastal real estate, ports, shipping, marine renewable energy and seafood as a result of climate change. Up to US$3.98 trillion (£2.93 trillion) is at risk to coastal infrastructure and almost US$3 trillion (£2.2 trillion) to global fisheries if no action is taken. 

This report, a major contribution to the work of the Ocean Risk and Resilience Action Alliance (ORRAA), shows that there are substantial financial benefits to reducing ocean damage and aligning financial portfolios with the Paris Agreement’s target. It concludes that urgent action is needed from all stakeholders if we are to shift the global blue economy to a more sustainable footing.

Louise Heaps, Head of Global Blue Economy at WWF, said: “Investors are becoming increasingly aware of the impact of their investments on our planet and how this may affect their portfolios’ performance and value. This report will help the finance sector better understand the economic and environmental risks of failing to protect our oceans. 

“We won’t forget our leaders’ promises for a safer climate for people and nature. Failure to address ocean finance at COP26 will undermine its efforts to tackle the climate crisis as we can’t keep global temperature rise to below 1.5oC without healthy oceans.”

Karen Sack, co-chair and Executive Director of ORRAA said: “This report shows the scale of what we all have to lose. Today’s ocean and coastal assets at risk are tomorrow’s stranded assets, where hard fought for value is going to be eroded if we don’t take immediate action and at scale.

“This report makes it clear that immediate, concerted action from business is required to protect what is at risk – the trillions of dollars of assets highlighted, but also the fragile ocean ecosystems on which we all depend. We have to put a far greater emphasis on valuing the ocean which is one of the greatest assets we have in the fight against climate change and biodiversity loss.”

Alongside the report, a new free-to-use tool for investors has been launched to help identify potential stranded assets in the blue economy. The tool helps to identify exposure within an unsustainably managed blue economy so that investors and financiers can steer away from high-risk investments with negative environmental impacts towards safer investments with nature-positive outcomes.

The COP26 climate summit is a critical moment to take action, and the finance sector must step up and align itself to the Paris Agreement targets by shifting their investments to those that support a sustainable, low-carbon future.


ENDS

For further information, additional content or to arrange an interview please contact: 

Mike Eames | B2B Media Manager at WWF 

T: +44 (0) 1483 412257 | M: +44 7502 400303 | E: meames@wwf.org.uk 

Out of hours contact T: +44 (0) 7500 577620 

Notes for Editors 

The report will be launched at a webinar Global Value at Risk in the Blue Economy, Thursday 14 October 13:00 BST | 08:00 EST | 20:00 SST where Margaret Kuhlow will moderate a panel of experts who will discuss the report. If you would like to attend, you can register here: Webinar Registration – Zoom

The report will be available at value-at-risk.panda.org on Thursday 14th October. 

The Metabolic study used a first-of-its-kind systems methodology, which is to be made publicly available alongside the dataset, to investors who are stakeholders in the blue economy. The model is unique in that it has measured the impacts, drivers and pressures that influence six sectors in the blue economy (an area well known for its scarce data), to estimate how changes to the physical and policy environment can impact assets and revenues.

The model shows that damage to physical infrastructure from climate change will be increasing in the coming years, and that up to 25% of the value to sensitive, ocean-dependent resources like fisheries may be at risk if no action is taken.

This provides a first step for the financial community to start to assess their risks and engage their investee companies that are exposed to ocean change.

Investing in the recovery, protection and resilience of our Ocean and its dependent societies is essential to secure national economies, advance ocean-related mitigation and adaptation solutions and support the delivery of the 2030 Sustainable Development Agenda.  

The Ocean Risk and Resilience Action Alliance, ORRAA, brings together the finance and insurance sectors, governments, non-profits, and stakeholders from the Global South to pioneer finance and insurance products that incentivise investment into nature-based solutions, with a focus on protecting the regions and communities that need it most. Our aim is to drive $500 million of investment into nature-based solutions by 2030, and surface at least 50 novel finance products by 2030, positively impacting the resilience of at least 250 million people in coastal areas around the world.

Metabolic BV advises governments, businesses, and NGOs on how to adapt to a fast-changing global context, while creating disruptive solutions that can dramatically shift how the economy functions. We crunch data, provide strategies and tools, build pilots, and create new ventures that develop scalable solutions to critical problems. Core to achieving our mission is the transition to an economy that is regenerative and ‘circular’ by design.

About WWF  

WWF is one of the world’s largest independent conservation organisations, active in nearly 100 countries. Our supporters – more than five million of them – are helping us to restore nature and to tackle the main causes of nature’s decline, particularly the food system and climate change. We’re fighting to ensure a world with thriving habitats and species, and to change hearts and minds so it becomes unacceptable to overuse our planet’s resources.   

WWF. For your world.    

For wildlife, for people, for nature.

Find out more about our work, past and present at wwf.org.uk  

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