Feedback sought by First Sentier MUFG Institute ahead of initiative to shed light on “broad, vast and complex issues” involved in investing sustainably in marine environment.
The First Sentier MUFG Sustainable Investment Institute is developing a high-level decision-making framework to help institutional investors integrate ocean-based considerations into their strategies. The framework will cover both capital allocation decisions and stewardship and engagement activities. It specifically targets asset owners and asset managers.
“There’s a huge amount of interest in natural capital themes among investors, which provides a good entry point for the broad, vast and complex issues involved in understanding and investing sustainably in the marine environment,” Sudip Hazra, Director, told Sustainable Investor.
As a first step to creating the framework, specialist consultancy Chronos Sustainability is conducting an investor survey for the institute. This research seeks insights from asset owners, asset managers and other stakeholders, exploring views on how ocean sustainability is perceived, and how it is integrated and prioritised within investment strategies.
Areas of focus include investment products, clients and beneficiaries, engagement and stewardship, and reporting and benchmarking. The survey is open until 26 September. All responses will be confidential and aggregated.
“We expect to include engagement guidance as there is clearly scope for more long-term engagement with portfolio companies on ocean-related themes. The survey will help us to develop the high-level framework, but we remain open to input as we continue to consult with investors.”
The institute was formed by First Sentier Investors and Mitsubishi UFJ Trust and Banking Corporation to help increase awareness and encourage action on under-researched and emerging ESG-related issues. Recent areas of research include climate adaptation in global food systems, integration of nature and biodiversity into investment processes, and nature-related disclosures.
Threat to ecosystem services
Covering over two thirds of the planet, oceanic systems regulate climate and sustain diverse life, providing ecosystem services that support over three billion people globally. The ocean economy has doubled in 25 years, and is comparable to the world’s fifth-largest economy.
However, anthropogenic pressures severely threaten ocean health and its ongoing ability to deliver vital ecosystem services. Climate change, habitat destruction and over-exploitation of marine resources are all key drivers of significant biodiversity loss. In addition, marine pollution – including plastic waste, chemical runoff, and noise pollution – can compound climate and nature risks, further exacerbating ecosystem harms.
Both policy and investment to support the sustainable development of the ocean economy has typically taken a backseat to terrestrial environments. But this has begun to change, stemming partly from the signing of the Global Biodiversity Framework (GBF) in December 2022, which pledged to protect 30% of both land and marine environments by 2030.
The recent UN Ocean Conference in Nice highlighted urgent needs, with world leaders and experts holding talks aimed at protecting marine environments and fostering sustainable use of ocean resources. The conference also saw progress made toward the ratification of the High Seas Treaty, which will create a legally binding framework for protecting marine ecosystems beyond national territorial waters.
Around US$1.2 billion per year is being channeled into ocean protection at present, well below the US$15.8 billion needed annually to meet the GBF’s headline target. The funds needed to create a fully sustainable ocean economy are reckoned by some to top US$550 billion annually.
Efforts are also underway to include ocean factors in major frameworks that guide corporate action and inform investor decisions on nature-related risks and impacts. Both the Taskforce on Nature-related Financial Disclosures (TNFD), which recommends disclosure standards, and Science Based Targets Network (SBTN), which helps companies set science-based targets for nature, are incorporating ocean factors into their guidance for users.
“The incorporation of the ocean economy into existing sustainable investment initiatives is welcome. But there is still a clear need for a high-level framework to help investors integrate the ocean into their decision-making processes,” said Hazra.
Opportunities in the blue economy
The negative impacts of rising sea temperatures include coral bleaching, which impacts reef ecosystems, while ocean acidification threatens shell-forming organisms, disrupting marine food webs. Meanwhile plastic pollution can choke marine life and contaminate seafood. As well as environmental harms, these cause damage to coastal economies, including tourism and fishing, as well as intensifying systemic risks such as global food security.
The new framework is intended to enable investors to assess complex risks, but also identify opportunities in the blue economy, including sustainable aquaculture and renewable energy. By informing stewardship and engagement strategies, it will empower investors to influence corporate behaviour, encouraging firms to adopt sustainable ocean practices, while helping to protect ocean health and sustainable returns for beneficiaries.
“The competing requirements of sectors such as energy and aquaculture are among the factors driving a re-evaluation of the services that oceans provide to the economy. Investors should get ahead of that process, with a view to pursuing long-term value and sustainable growth,” said Hazra.
The first draft of the framework is expected to be published in early 2026, but the initial findings of the survey could be made available before the end of the year.
