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Executive summaryBanks, insurers and investors have a crucial role to play in the transition towards asustainable blue economy (SBE). To help guide them, the European Commission, European Investment Bank, WWF and the World Resources Institute launched the Sustainable Blue Economy Finance Principles in 2018.Building on the momentum of these principles, the United Nations EnvironmentProgramme Finance Initiative (UNEP FI) hosts the Sustainable Blue Economy FinanceInitiative (SBEFI), a new platform bringing together financial institutions to work withscientists, corporates and civil society to facilitate the adoption and implementation ofthe Sustainable Blue Economy Finance Principles, ensuring they become operationaland useful for financial institutions worldwide. The SBEFI seeks to achieve the following:Positively influence mainstream ocean-related investment, insurance and lending todrive development that underpins a sustainable blue economy; Catalyse finance sector engagement and practical action to deliver a sustainableblue economy and support the ambitions of SDG14 (Life Below Water); and Develop concrete actions and outputs for insurers, lenders and investors to alignlending, insurance and investment decisions with ocean health. To support the work of the SBEFI, this report aims to create clarity around the state offinancing for the sustainable blue economy, defining the concept of SBE finance andproviding an overview of its current status. It seeks to provide insight into the transitionrequired to realise financing for the SBE across the five key sectors that form the basisof the SBEFI’s initial focus: Seafood (including fisheries and aquaculture); Maritime transportation; Port development; Coastal and marine tourism; and Marine renewable energy.The report maps the current SBE financing landscape, highlighting existing initiativesand resources and identifying some of the key players and initiatives working alongside UNEP FI to build up financing for the sustainable blue economy. Crucially, it alsoconsiders some of the gaps in current focus where greater attention may be worthwhile (see overleaf). This leads into a discussion on needs and opportunities, examining where financial institutions and other stakeholders may play beneficial roles infinancing the sustainable blue economy.Rising tide: Mapping ocean finance for a new decadeExecutive summary8

xTotalxUNEP FI SBExFOAxHLPxSO4AWB PROBLUExUNGCADB oceanxGOAPCCxKnowledge and researchinitiativesPlanetTrackerGERFxEIB Blue SOSBNCFFMDBinitiativesCPICSpecific financeinitiativesORRAATCFDArea of focusEU g understandingDefining concepts and framing the issuexxPolicy frameworks and enabling conditionsxxxxxxData analysis and measurementxxCampaigning and/or engagementxxxxxxxxxxxx6x7Tools for the financial industryConcessional financing and seed investmentxDe-riskingxxReplicationxxDisclosure and reportingPrimary ocean focusRising tide: Mapping ocean finance for a new decadeExecutive xxxxxxxxxxxx6xxx6xxx99

The report then considers the results of an industry survey undertaken in September2020, which gauges the understanding and key considerations of banks, investors andinsurers in the sustainable blue economy. The responses to this survey underpin theinsights in this report and are described in detail in Chapter Three. Among the keyinsights from this survey is the breadth of instruments used by the institutions financing the sectors of the blue economy, as indicated in the chart below where each colourrepresents a different kind of financing instrument. This highlights that the sustainableblue economy is not ‘one size fits all’, and that a wide range of instruments may beused and applicable to the diversity of sectors and activities it comprises.Broad array of financial instruments used acrosssectors of the sustainable blue economyMarinerenewableenergyCoastal andmarine tourismMaritimetransportationPortsSeafoodNeeds and opportunitiesIt is evident from the survey results as well as recent literature (Responsible Investor,2020) that financial institutions see both significant risks and areas of impact in thesustainable blue economy. Similarly, many sectors of the SBE are predicted to grow inrelevance over the next 10 years. In light of both of these factors, the future development of the SBE features both clear needs to be addressed as well as opportunities tobe captured. As needs and opportunities are asymmetric and look different for different sectors of the blue economy, these are explored on a sector-by-sector basis in thisreport, building on the results from the survey.A number of resources have been developed to better understand some of the needsand opportunities in the sustainable blue economy (e.g. Friends of Ocean Action(2020), Sumaila et al (2020)). This report considers these for the five sectors of thesustainable blue economy guidance, alongside potential roles for financial institutionsto realise the SBE and case studies of current best practice and innovation.Rising tide: Mapping ocean finance for a new decadeExecutive summary10

SeafoodThere is a pressing need to move the remainder of the world’s fisheries from an unsustainable to a sustainable status. Currently 21.3% of the world’s fisheries remain over-exploited, which means the SDG target 14.4 to end overfishing by 2020 has not beenachieved (FAO, 2020). From a financing perspective, it is vital for mechanisms andinstitutions to pivot away from providing capital or insurance to companies active inover-exploited fisheries. This includes seeking out sustainability certification for fisheries and introducing new solutions for monitoring, control and surveillance (MCS) offishing effort and fisheries traceability.Uniquely among the sectors featured in this report, fisheries are predicted by surveyrespondents to become less prominent within the sustainable blue economy by 2030,as—on the current trajectory—the world’s wild fish stocks are maximised and aquaculture continues to grow to meet global seafood demand.In aquaculture, key concerns relate to reducing aquaculture’s negative impact on theenvironment while scaling up globally to meet demand for animal protein, particularlyamong the world’s emerging middle classes. Improvements in profitability and efficiency—notably through sustainable intensification and improvements in feed conversion and new commercially available species—are additional factors for the sustainedgrowth of aquaculture. For financial institutions, principal requirements to supportcontinued sustainable growth are: ensuring that overall production is sustainable,with minimal environmental impact; and managing disease outbreaks and concernsover invasive species within fish farms. As with fisheries, certification, when appliedeffectively is an important lever to move the sector towards sustainability, both at theproduction level and within the seafood supply chain, where wild-caught and farmedsources converge.PortsPorts impact on both terrestrial and marine ecosystems, and are particularly vulnerableto the impacts of climate change, and face physical risks from storm damage, coastalsubsidence and rising sea levels (UNCTAD, 2018). This suggests a need to modernisethe port sector globally to bring it in line with the targets of both the Paris Agreementand the Sustainable Development Goals. Resilient and green infrastructure is a potential avenue for financial institutions to explore to identify opportunities to develop amore sustainable port infrastructure. Particular opportunities may exist in the decarbonisation of the sector, the highest-reported trend for the current decade.Rising tide: Mapping ocean finance for a new decadeExecutive summary11

Maritime transportationClosely tied to the development of ports, maritime transportation is an important driverof global trade and the economy. Like ports, maritime transportation impacts on theenvironment in a number of ways, notably through air, water and noise pollution, therisk of introducing invasive species and collisions with wildlife. Maritime transportationhas been particularly impacted in recent years by the International Maritime Organisation’s decision to set a 50% decarbonisation target for the sector by 2050 to bringit in line with the Paris Agreement (IMO, 2018). The resultant needs for the maritimetransportation sector are tied closely to the broader objectives of decarbonisation—beit through retrofitting existing ships to use fuels with a lower emissions profile (HellenicShipping News, 2020); identifying ways to optimise maritime transportation efficiency(Armstrong, 2013); and innovating new ways of transporting cargo altogether, suchas reintroducing wind-powered propulsion (Zeldovich, 2020). Existing guidance forthe maritime transportation industry—notably the Poseidon Principles—offer a helpfulframework for moving the sector towards sustainability in line with global policy effortson sustainability and climate.Coastal and marine tourismThere is a clear need in the tourism industry to gain a better understanding of whatsustainability means (both for mainstream tourism as well as eco-tourism) and toscale up the adoption of standards for sustainability in tourism operations. To date,the Global Sustainable Tourism Council (GSTC) has taken a leading role in developing a common standard for sustainable tourism that is used throughout the industry.However, a notable absence from the GSTC’s standards at the present time is cruising,where benchmarks and regulations for sustainability vary greatly by jurisdiction andare often managed under the auspices of the IMO as adapted maritime transportation regulations. As an immediate contribution towards the scaling up of sustainabilityin the tourism sector, financial institutions can support the development of greaterawareness and use of sustainability benchmarks in the tourism industry by demandingsustainability certification in their financed transactions.Marine renewable energyFavourable regulation continues to be a key factor in the contribution of marine renewables to the energy mix. In northern Europe offshore wind is increasingly competitivewith non-renewable energy, but elsewhere there is a continued reliance on favourableregulation to enable investment and overcome the high costs of capital associatedwith the development of marine renewables. This creates a clear role for public institutions to provide the right conditions for renewables to thrive—notably in the context ofsubsidies for renewable energy generation.Rising tide: Mapping ocean finance for a new decadeExecutive summary12

As marine renewables grow in prominence, there is also a clear need for greater clarityaround their impacts on society and the environment as well as how they interact withother users of the marine environment. For example, increasing the level of knowledgeand understanding of the environmental impact of installing new wind turbines on theseabed is vital to ensuring that best practice can be developed.RecommendationsBased on the findings from this report’s survey and an assessment of the needs andopportunities for future development of the sustainable blue economy, a number ofrecommendations for the development of sector-specific guidance1 have emerged.1. Wherever possible, leverage existing guidance, standards and best practice forsustainability at the sectoral level. For several of the sectors covered in this report,substantial efforts have been made to codify best practice for sustainability withconsiderable uptake by industry. For example, the Global Sustainable Tourism Council (GSTC) standards and Poseidon Principles for maritime transportation haveparameterised sustainability on a number of key topics already. While the guidancebeing developed for the sustainable blue economy will target financial institutionsrather than sector-specific businesse

Rising tide: Mapping ocean finance for a new decade 7 Foreword This new report sees the United Nations build on these Principles, mapping the current state of ocean finance and the transition required at the start of the UN Decades of Ocean Science for Sustainable Development and Ecosystem Restoration. The report reveals