Blue economy should be part of the ESG equation
Despite larger sustainability trends, economic activities associated with the oceans and seas are often neglected, observers say
THE tension between sustainability, economics and values.
This was among the topics discussed at The Ocean Collective Summit, held at Sheraton Towers on Oct 17 and 18.
Among those present were conservationists, business leaders and policymakers with the objective of protecting the world’s oceans.
It is known that water makes up about 71 per cent of Earth’s surface, and the oceans hold about 96.5 per cent of all the planet’s water.
Despite this, the blue economy – or economic activities associated with the oceans and seas – has been neglected compared with the green economy, said Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore Business School.
He added that while megatrends such as environmental, social and governance (ESG) metrics, biodiversity and natural capital are bandied about, at the local level, “we are more realistic... nobody is concerned about the blue (economy)”.
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
This is despite the blue economy supporting about three billion people – more than a third of the world population, he added.
Chavalit Frederick Tsao, chairman of Tsao Pao Chee, said that solutions therefore need to be found to restore nature.
“It is about investing in the future... (We need to) sit down as an industry to reflect and plan together... What is our responsibility to ourselves and future generations?”
The shipping industry is “very complex because there are port states and producing states” and the like, but it needs a change in mindset, he added.
Tsao is the fourth-generation leader of his family’s business, and has managed to turn it from a shipping-focused enterprise into a multinational corporation.
“ESG, in fact, (is about doing) less harm, and impact investing (is about doing) more good... (they) should work together,” he added.
Prof Loh concurred and added that a few solar farms have been placed in the ocean and while they generate green energy, they can also have a negative effect on the marine ecosystem.
He said that most current initiatives relate to the green economy and ignore the blue one. “For example, the Paris Agreement states that countries have to contribute to nationally determined contributions – but the ‘blue’ part is neglected.”
Meri Rosich, chief executive officer of ocean sustainability consultancy Oceonomy, said that the blue economy must therefore be made “exciting for all types of investors”.
This blue economy is estimated at between US$3 trillion and US$6 trillion, and there is a need to generate investment interest not just from institutional investors, she added.
“If we knew the climate risk of those investments, we would drive (them) towards transition innovation and reward companies adapting (to) our world, rather than those polluting and generating more climate risk,” she said.
On the second day of the conference, there was a panel discussion on investing in a sustainable blue economy which discussed the importance of the financial sectors in driving sustainable development.
Janet Shum, sustainable investing specialist for the Asia-Pacific at Citi Wealth, said: “We are facilitating the flow of capital so we can help to divorce capital... from harmful activities, as well as drive capital to the innovation and businesses that are helping to conserve ocean health.
“What we do is we incorporate thought leadership and give (investors) insights on what is the latest trend and development in this market.”
She added that many of the group’s clients are business owners making transitions in their enterprises. “They see the value of sustainability… and they want to expand it to (their) investment portfolios.”
Other panellists included Celine Schulze, co-founder and managing partner of investment company 10power9; Daniel Mira-Salama, lead environmental specialist at the World Bank; and moderator Ghislaine Nadaud, senior sustainable investing specialist at asset manager Robeco.
Copyright SPH Media. All rights reserved.
