BNP Paribas Asset Management, Federated Hermes, Mirova, Robeco and Storebrand Asset Management are calling for enhanced ESG data on ocean-related risks to encourage greater investment in tackling the threat to the ocean’s health.
In a joint statement, ahead of the United Nations’ World Oceans Day on 7 June, the group also identified the main ocean-related sectors where they found major data gaps in understanding risks and opportunities.
The call for greater ocean-related data comes as financial institutions are becoming increasingly aware that alongside climate change, inequality and biodiversity loss are creating risks to businesses and increasing systemic risk for the financial system.
Ocean economy
The ocean is the world’s largest ecosystem, covering 71% of the earth’s surface and hosting an estimated 1-2 million species, with an economic value estimated at €2.3trn, according to the UN’s Sustainable Blue Economy Finance Initiative.
In the statement the group pointed to the Kunming-Montreal Agreement which provided governments and non-state actors with frameworks for action that include overarching goals and targets, such as to protect 30% of the planet’s lands and inland waters, as well as of marine and coastal areas, by 2030.
As such, the group points to part of the agreement where governments for the first time have explicitly committed to require all large and transnational companies and financial institutions to assess and disclose their dependencies, impacts, risks, and opportunities on nature, through their operations, supply and value chains, and portfolios.
By providing credible data, the group added, this would allow investors to embed ocean-related data into analysis and assessments, and highlight areas of ocean-related risks and opportunities within portfolios to improve decision making, as well as engage on ocean-related topics with investees, identify and allocate capital for ocean-related opportunities and improve ocean-related literacy within workforces.
Additionally, as large investors with high ocean-related exposure, the group identified the main areas where they found major data gaps in understanding ocean-related risks and opportunities. These included: aquaculture, coastal and deep-sea mining, coastal and marine tourism, offshore oil and gas, shipping, and biotechnology.
The group also recommended that the format of the data should be easy to use, flexible and transparent, allowing for the methodology to be compatible with the public taxonomies, guidance and internal environmental assessment systems already in use (for example, the European Union Taxonomy).
Data providers’ expectations to understand ocean-related data needs
The institutional investor group has also suggested several guidance points for data providers:
- Performance indicators: understand compliance against regulations, data points reflecting real impact using physical units (ex. km2 of sea use change).
- Supply chain: ability to check the potential sourcing of endangered species by food retailers. The data points must factor in the entire supply chain, as large investors are usually more exposed to downstream ocean-related supply chains.
- Asset level locations: fishing vessels, shipping boats, aquaculture sites, ports, hotels.
- Ownership data: to reflect the ultimate owner, fishing vessels to fish processors, and estimate seafood supplier links to food retailer/services.
- Sector estimates: sector assessment grids should make it possible to make estimates tailored to the specificities of each sector.
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