@WorldOceansDay 2021: corporates powering winds of change suggest investment managers

by | Jun 8, 2021

This World Oceans Day – which is aimed at informing the public of the impact of human actions on the ocean – comes at a critical moment in the global fight against climate change.

With COP26 less than six months away, policymakers and corporations are under increasing pressure to ensure the global economy transitions away from its reliance on unsustainable practices that damage global ecosystems – such as the world’s oceans.

Below, three investment professionals outline a number of challenges and opportunities presented by the global push to conserve our oceans.

Imaginative solutions needed

Hilde Jenssen, head of fundamental equities at Nordea Asset Management

An estimated eight million tonnes of plastics end up in our oceans every year – equating to 80% of all marine debris. Global plastic production has exploded from about 1.5 million metric tonnes in 1950 to 368 million in 2019. Plastic pollution is a global problem and affects the entire value chain, from manufacturer to waste management.

An effective solution requires addressing the issue on multiple fronts – including reduction, recycling, regulating and reimagining plastic. There are two ways investors can help reduce plastic pollution – invest in companies with clear recycling targets and invest in companies providing alternatives.

The health of the planet depends upon imaginative thinking in order to halt the vast tide of plastic waste. Thankfully, more and more companies are harnessing their power to address the problem. Understanding the economic cycle of plastic and the available solutions is crucial to making progress towards restoring our oceans – upon which all life depends.

Too much of a good thing

Henry Boucher, co-manager of the Food & Agriculture Opportunities Fund at Sarasin & Partners

Plastic is a miracle material – light, flexible, waterproof, virtually unbreakable and very cheap. It is endlessly useful, but its key fault is it is endless – a plastic beverage bottle may take 450 years to break down. This means the majority of all the plastic ever produced still exists.

This has largely been put out of sight and out of mind, but the pictures of turtles caught in carrier bags or birds eating cotton buds are showing us the legacy of our wasteful habit. Indeed, a third of all plastics end up in fragile ecosystems like the oceans.

The European Commission has adopted an ‘Action Plan for a Circular Economy’ and in 2017 set goals for all plastic packaging to be recyclable by 2030 and for more than half of plastics to be recycled. However, the key question is whether companies should produce and sell plastic-packed products in volumes that exceed the capability of local waste disposal systems to handle them. If governments are serious about plastic pollution, it is not impossible to imagine bans or volume restrictions with severe consequences for FMCG sales.

A whale of an investment

Carole Millet, head of sustainable investing at Syz Group

The Mediterranean carries about 30% of the world’s shipping and yet its surface area covers less than 1% of the globe’s oceans. The pressures created by dense shipping and populations have degraded the Mediterranean basin. Over the past 50 years, the sea has lost 41% of its marine mammals and one third of its fish. There are now fewer than 1,000 sperm whales left in the western Mediterranean, and whales and dolphins are often trapped in fishing nets, killed in collisions with shipping, or disturbed by noise pollution from humans.

The Mediterranean’s sperm whales may seem an unlikely investment target. However, a new finance model puts the fruits of investments in sustainable assets to work for clients and for the marine environment.

Syz is partnering with Kepler Cheuvreux to offer a certificate across a basket of companies in the renewable energy, circular economy, water and waste, eco-products, and services sectors. Three-quarters of investors in the Syz certificate have chosen the share class that distributes a portion of returns to Asociacion Tursiops, a Palma de Mallorca-based non-profit group of marine biologists.

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