A Week of Circularity: The Blue Economy

This year's World Ocean Day highlights how ocean protection and governance are becoming national security issues, while the ocean is also emerging as the next economic frontier. Oceanic ecosystems regulate the climate, provide crucial nutrition to over three billion people, and supply energy worldwide. Moreover, ocean-based goods account for 6% of global trade, according to UNESCO . However, inadequate ocean protection policies and market failures have resulted in an estimated $1 trillion in socioeconomic damage annually.

The UN High Seas Treaty , signed by over 80 countries in 2023, offers an opportunity for global governance of 95% of the world's ocean volume, making ocean protection a collective responsibility. As ratification processes move forward, this landmark agreement promises to be a major win for both biodiversity and global security.

?? The Science of Impact

The blue economy is often discussed in terms of ocean sustainability .

The World Bank has long placed its definition in a broader context, according to which: "[the blue economy] is now a widely used term around the world with three related but distinct meanings: (1) the overall contribution of the oceans to economies, (2) the need to address the environmental and ecological sustainability if the oceans, and (3) the ocean economy as a growth opportunity for both developed and developing countries.” The third pillar links the blue economy with sustainable development and calls for an integrated approach based on sustainable use of the oceans and coastal areas to deal with environmental degradation and resource depletion.

Through a sustainable development lens, the ocean’s commercial value is intimately linked to its social impact and, inevitably, is not sufficiently captured in official national accounts .?The state of country-level R&D subsidies has a long way to go for dedicated ocean-based solutions to foster scientific collaboration and the necessary technology transfer.

Webinar: Beyond GDP - National Accounting for the World's Ocean Economy

?? Circularity Roadmaps Explained

Advances in ocean protection and investments rely heavily on a sound governance structure. The High Seas Treaty promises to guide the global blue economy toward an actionable blueprint for marine environmental protection, in preparation for the Third UN Ocean Conference (UNOC3) in June 2025. Co-hosted by France and Costa Rica in Nice, the Treaty aims to close the governance gap in conserving and managing marine life in the High Seas.

As noted by the Brussels-based think tank Europe Jacques Delors , despite the EU's recent backtracking on ambitious environmental agreements, the bloc played a critical role in the negotiations leading to the Treaty's successful adoption in 2023. The EU's support remains pivotal in advancing global environmental governance, particularly in ocean protection.

The practitioner view is that the success of it all will all largely depend upon rolling out Environmental Impact Assessments and building the necessary capacity for marine technology in alignment. These would build on the work of the EU Commission's Mission Starfish , the large scale transformation that has at its core the restoration of EU oceans and waters by 2030, and includes the protection of ecosystems and biodiversity, the elimination of pollution, and the shift to a carbon-neutral and circular blue economy. To enable such a transformation, a revamped governance system that is up to the challenge is necessary along with cross-cutting supportive action.

With fisheries and tourism identified as the main blue sectors by the EU Commission, specific aspects of these sectors have been assessed in the Mediterranean, including the reduction of negative impacts on the seas and oceans caused by land activities like port systems. Fisheries and aquaculture are significant in generating nearly USD 12 billion per annum and significant employment (approx. 1 million people). They offer a number of opportunities for adopting circular economy principles, along the entire value chains of seafood products, starting from the loss of fishing gear, which in some cases is intentionally discarded to avoid costs of end-of-life disposal.

?? Investing in the Circular Economy

The investment ecosystem surrounding the blue economy has been advancing at rapid pace between 2018 – 2023. According to the BlueInvest Investor Report 2024 , the ocean contributes over €1.5 trillion in gross value added annually, and it is expected to surpass the €3.0 trillion mark by 2030 - an astounding potential contributor to the EU's global competitiveness, security and strategic autonomy.

According to data from CB Insights and 普华永道 , Blue Economy deals tripled for the period 2018-2023 to nearly 1,250, of which 270 deals per year were closed between 2021 and 2023. Data points to significant variance in investor demand. In terms of sectors, three dominate in terms of the number of deals closed: Blue Renewable Energy (589), Blue Tech and Ocean Observation (464), and Aquaculture (432) between 2018-2023.

At the other end of the spectrum, Sustainable Coastal and Maritime Tourism and Environmental Protection & Regeneration appear to have closed fewer than 150 deals, even though trends in demand for these types of assets keep growing.

In addition to the sustained growth in public markets issuance of blue bonds and loans, a number of private equity and venture capital funds continue to embrace a distinctive focus on the blue economy in their portfolio strategies. Mutual fund vehicles and ETFs have also joined the faster pace of adoption. The newest addition is the KraneShares Rockefeller? Ocean Engagement ETF (KSEA) by Rockefeller Asset Management through KraneShares . Launched in September 2023, this ETF yields direct exposure to companies and industries impacting the blue economy. Holdings are grouped into three categories critical to ocean health and the blue economy: Ocean Leaders, Ocean Solutions, and Ocean Improvers. KSEA's distinctive focus is on "Ocean Improvers", those companies within the MSCI All Country World Index that may offer the biggest potential to drive alpha from targeted engagement.

?? You don't want to miss this month...

From Guelph (Canada), to London (UK), and Geneva (Switzerland), the month of June offers new opportunities to connect with fellow circularity practitioners both in person and in hybrid mode.

Discover, grow and leave your mark!

June 24th – 27th: Circular Economy Showcase (Guelph, Canada). The Dutch Consulate in Toronto invites Dutch companies to join a delegation to the Circular Economy Showcase 2024 in Guelph, Ontario. The event will feature a focus on biobased materials, with an exhibition and workshop. Hear from renowned speakers on circular economy topics and connect with potential partners through networking opportunities. The Dutch Consulate can facilitate one-on-one meetings with key Canadian organizations. The registration form is available here .

June 25th: Nature Risk is Business Risk (London, UK). Why should businesses care about nature risk? As part of the London Climate Week 2024, the team at Howden will explore the business impacts and dependencies on nature in a moderated three-part session to discuss with leading experts some of the most pressing questions:

• How do nature-related risks create liability risks and opportunities for directors and officers?
• Which existing nature-related regulations and litigations should businesses be aware of?
• How can business leaders start identifying and managing nature-related risks?
• What is the role of insurance in de-risking first movers in nature investment?

The discussion will be followed by a workshop on nature risks across the global supply chain. To register your interest please visit this link or connect with Ha young Jung for more information on the event.

June 26th: UNECE Regional Conference on the Circular Economy (Geneva, Switzerland). Held under the Circular STEP network at the Palais des Nations, the conference will focus on four aspects of the circular economy transition: leveraging innovations, attracting investments through public-private partnerships, advancing the circular economy in agri-food value chains, and improving product traceability along international value chains. The event is jointly organized by the Committee on Innovation, Competitiveness and Public-Private Partnerships and the Steering Committee on Trade Capacity and Standards as part of their annual sessions. Please use the registration link for attending either of the two Committees.

Off to another impactful week!