#BlueNature is the future: a healthy #ocean and a stable #climate are two sides of the same coin. We urgently need a global ocean finance ecosystem!

Crucial to climate regulation by being our largest natural carbon sink, our ocean is also home to marine species and ecosystems essential to biodiversity.?But unfortunately it is not enough seen as a public good we should all commit to protect. Our relationship with natural ecosystems is often transactional and we tend to take more than we give to the ocean. This balance must be shifted starting by truly acknowledging that????blue nature???is key to our physical security, our economic security, and the worlds’ food security, the source of many raw materials and jobs for millions of people.?

Our ocean is being depleted at an alarming rate leading to biodiversity and habitat loss, ocean temperatures and sea levels are rising, impacting the well-being of climate vulnerable coastal communities...?The resilience of our ocean is diminishing in many parts of the world, with many causes and consequences: devastated livelihoods, coral reefs and mangroves deteriorated, migration patterns changed, more frequent severe weather events, pollution from agricultural runoff, chemicals, (micro)plastics, overfishing...

Our global economy relies on a healthy ocean

The private sector has become increasingly engaged in the climate space over the last several years and it is essential that this continues to grow in the ocean space as well. We can be a true partner in developing and testing financing solutions and stimulating investment in large-scale projects.?Currently, only 1% of climate finance is directed to the ocean!

A study released by the World Wildlife Fund, Metabolic and ORRAA, late last year made this very clear.?According to their estimates, nearly 66% of publicly listed companies are exposed to and dependent on a healthy ocean. In a shocking finding, their models showed that up to $8.4 trillion of assets and revenue are at risk in the coming 15 years if we don’t mitigate our impact on the ocean. We need to find a way to develop a more sustainable relationship with our ocean, and just as the private sector both impacts and is impacted by a changing ocean, the private sector must also be a key player in building solutions.

This includes thinking creatively about how???normal???finance tools like insurance can be leveraged to build resilience, such as building innovative parametric insurance products for coral reefs or enabling increased access to insurance for small-scale fishers.??

It also requires us to think about how private sector expertise could be leveraged to develop and pilot ground-breaking new products, like blue carbon credits or financing mechanisms for MPAs.

We also have a role to play in using our experience to grow and mentor start-up projects, to help them build out business plans that will help them access global ocean finance, like with the Ocean Resilience Innovation Challenge.

This work cannot, of course, be built on its own. We also require the insight of numerous sectors from utilizing the knowledge and data of our academic peers to relying on the experience and on the ground knowledge of NGOs and local organisations. It?is?with this collective input that we can build solutions that are relevant and impactful. This is the key for our partner ORRAA’s goal to positively impact the resilience of 250 million climate vulnerable people by 2030.

AXA’s commitments

At AXA, our climate and biodiversity strategy is key to our commitments to use our expertise to provide solutions. Through our risk management expertise, the vast number of claims data we collect, the research we fund to address climate-related risks, and our duty to disseminate knowledge about new risks and put our investments to good use too, we are very well positioned to send the right signals to the investment community and to the specific companies we invest in.

AXA has been working for the last several years to strengthen its work in the blue space through the Ocean Risk Initiative.?

As cofounder of the Ocean Resilience and Risk Action Alliance (ORRAA), since 2019 we supported numerous projects including: the Coastal Risk Index, the IUU Fishing and Insurance Project, the Climate and Ocean Risk Vulnerability Index, Blue Carbon and Resilience Credits… This includes also working with our AXA Chair in Coastal Resilience and AXA Chair in Climate Change Impacts and Coastal Risk to develop the Coastal Risk Index launched at COP26 and that will help us incorporate coastal ecosystems into our insurance flood risk models.

With ORRAA, we are now looking forward to leveraging the expertise of our teams to develop new ocean risk management and insurance solutions on the development of the Sea Change Impact Financing Facility (SCIFF), announced at the?#OneOceanSummit hosted by France in February 2022 and launched during the Ocean Conference at Lisbon in June 2022.

As part of the UN Decade, the AXA Research Fund in collaboration with IOC-UNESCO, agreed to provide €1m to support eight scientific projects linked to coastal livelihoods.

We have also worked with Global Fishing Watch and ORRAA on their work on IUU Fishing to improve our own Underwriting Rules and Guidelines and our due diligence on fishing vessels to cut off access to insurance for vessels engaged in IUU Fishing.

Diverse ecosystems are key to tackling climate change, and AXA is proud to be a founding member of the TNFD to help develop a framework enabling financial institutions to identify economic activities that have a material impact on biodiversity,?and to be working with TNC on the first ever Blue Carbon and Resilience Credits.

AXA Climate, in partnership with AXA XL, are focused on leading the integration of insurance linked to nature-based solutions. AXA Climate is the insurance carrier for post-hurricane coral reef insurance on the Mesoamerican Reef. Alongside this, over the past three years, AXA XL, in conjunction with The Nature Conservancy, has created the scientific basis and technical capacity to develop the first mangrove insurance product.?

As a member of the Metrics and Targets Working Group, we collaborate with peers to define decision-useful metrics that will enable investors to further incorporate nature conservation objectives into their asset allocation strategies, helping to reorient financial flows away form ? nature-negative ? towards ? nature-positive ? outcomes.?

Connect projects to finance and finance to projects

Since COP15, the ? Kunming Declaration ? highlighted the need to align financial flows in support of the conservation and sustainable use of biodiversity.?We hope the conclusion of COP15 in 2022 will lay the ground for closer public-private cooperation on nature preservation.?

Last year, I co-hosted an ocean finance roundtable at COP26 alongside Lord Zac Goldsmith, organized by ORRAA and the UK. This roundtable highlighted many of the different companies, countries, and organisations that need to be involved in this work. One of the key takeaways from that roundtable has been the need to connect projects to finance and finance to projects. $20 million was committed to ocean resilience initiatives! This is an amazing achievement... but it is still only a small drop in the ocean of what is needed. Remember, currently only 1% of climate finance goes to the ocean!?

The last several years, ORRAA have succeeded at bridging the gap between finance, private sector expertise and to grow and scale solutions and projects. Now we need to bring this momentum forward into the next phase. I personally look forward to working on the ORRAA board to lead this Alliance into its next phase of growth, both with our current members and bringing in new partners.

The global economy is so dependent on nature that it is in fact rather surprising that the link between nature and finance has remained a niche topic for so long. The insurance sector is critical to blue finance and ocean conservation. It has data, experience and expertise, as well as innovative financing mechanisms for sustainability. But it is the entire private sector that can, and must, play a role in the fight against climate change and biodiversity loss!

Perhaps you belong to an organization that wants to get involved... Take the plunge!

#Sustainability #BlueFinance #BackBlue #SaveOurOcean #UNOC2022