The ocean is a key environmental and economic resource that covers more than 70% of our planet. Despite contributing to 100 million people’s livelihoods and sequestering 80% of the world’s carbon, the ocean has been largely neglected by venture investors.
Historically, companies and projects working to protect the ocean were grant funded, but we are witnessing an influx of capital and interest in sustainable blue ocean business, known as the ‘blue economy’. Last year, Future Planet Capital committed $40 billion of capital to climate investing. Now we are seizing an opportunity to be an early adopter in the ocean impact investing space and want to encourage others to do the same.
The Future Planet Capital Blue Ocean fund, launched in February 2022, focuses on three key areas of opportunity within the blue economy: preventing pollution, preserving of marine environments and ecosystems, and sustainable marine productivity. In our investment strategy we focus not only on large financial returns, but compelling companies that make a real difference to people and to the planet. This is what’s known as impact investing.
We see clear opportunities to reduce problems in the ocean such as pollution of fishing stocks by microplastics and “ghost” fishing gear, and also in creating sustainable sources of protein, and improving the health and local economy of coastal habitats and communities through sustainable aquaculture. We also see companies innovating in the long term sequestering of carbon in the ocean, enabling renewable energy or displacing unsustainable shipping practices.
At Future Planet we look beyond simple Environmental, Social and Governance (ESG) to the positive impacts the product or service will have in an upside case. We may measure carbon reduction using a carbon pricing model, for example.
Ukraine, the Covid-19 pandemic fallout and supply chain disruption have led to rising inflation, increasing interest rates and stock market falls, all adding up to significant market uncertainty. We believe this in turn presents significant opportunities for those of us deploying capital to exceptional founders tackling the challenges in health, security and sustainable growth.
Climate change and blue economy impact investing will be well positioned in this market. Investors in this space can find true value by zoning in on the most important issues – reducing greenhouse gas emissions, finding sustainable sources of food, protecting biodiversity and creating energy sources that do not put our lives, or the environment in further danger. Injecting capital in these areas will help improve the health and wellbeing of human populations, reduce harm from the changing climate, and provide long-term financial returns. It’s a win-win.
By Ed Philips & Andy Muir, Future Planet Capital