The third UN Ocean Conference (UNOC), held this year in Nice, France, brought together ocean leaders and thousands of delegates to accelerate action for ocean protection and advance Sustainable Development Goal (SDG) 14: “to conserve and sustainably use the oceans, seas and marine resources for sustainable development”. By the end of the conference, there was a sense that real progress had been made; innovative projects were proposed, global commitments were made and new collaborations were formed.

But across all these exciting opportunities, one question came up time and time again: How do we finance all this?

It’s a question that has long been asked, and one that the “Blue Economy and Finance Forum” (BEFF), held in Monaco one week before the UNOC, sought to answer. The forum brought together 1,800 participants to explore how to scale financing for a sustainable ocean economy. It generated more than 8.7 billion euros ($10.2 billion) in new pledges and launched several new initiatives, including “Business in Ocean” and “Philanthropic and Investors for the Ocean”, which will focus sector-specific actions toward a sustainable ocean economy. The forum also introduced the “Ocean Investment Protocol”, which provides key recommendations for unlocking private capital.

The BEFF marked a vital step forward in deepening our understanding of the ocean finance landscape and mobilizing action. The real challenge now is maintaining that momentum.

To ensure an equitable and effective transition to a sustainable ocean economy, it’s essential that stakeholders understand the current state of ocean finance and, more crucially, what actions need to happen next. The latest paper commissioned by the High Level Panel for a Sustainable Ocean Economy (Ocean Panel) titled “Ocean Finance for the Sustainable Ocean Economy”, launched in Monaco, reveals both the extent of the ocean financing gap and identifies key pathways to close it.  

Despite the ocean’s importance — providing half of Earth’s oxygen, regulating our climate and feeding billions globally — SDG 14 is the least funded of all 17 goals, receiving less than 1% of total SDG finance. This is a powerful statistic. It highlights the disparity in SDG funding and the need for a greater focus on the ocean. However, this figure alone doesn’t capture the full picture of ocean finance, and there are a couple of key reasons why.  

  • First, it only considers funding from official development assistance. Private finance towards SDGs, and in particular SDG 14, remains difficult to track. This is partly due to a lack of a shared taxonomy for categorizing global ocean finance and inadequate tagging of expenditures that are working toward SDGs. 
     
  • Second, SDG14 does not encompass all sectors within the sustainable ocean economy. Several prominent ocean economy sectors receive financing tracked under other SDGs. For example, developing offshore renewable energy falls under SDG 7; producing cleaner fuels for shipping is tracked under SDG 9; and port electrification is categorized under SDG11.

The 1% statistic, and SDG14 as a whole, represents just one piece of the larger ocean finance puzzle. However, the disparity in SDG funding offers a glimpse into the undervaluation of the ocean economy and its contribution to global goals. It underscores the need for a greater understanding of the financial flows currently going into the sustainable ocean economy. Because of this uncertainty, estimates for the financing needed to support a global transition to the sustainable ocean economy vary widely, falling somewhere between $383 billion to $717 billion per year.

Despite the shortfall in investment and the undervaluation of SDG 14, the ocean economy is booming. The OECD estimates that the global ocean economy has doubled in real terms over the past 25 years, growing from $1.3 trillion in gross value added in 1995 to $2.6 trillion in 2020. What’s needed now is to ensure this growth is channeled into sustainable ocean sectors, such as offshore renewables, and away from harmful practices like unsustainable fisheries management. Sustainable investments can begin to close the financing gap, which can then be supplemented by new mechanisms and funding streams, such as blended finance mechanisms (outlined below). Recognizing existing opportunities and ensuring that the necessary development frameworks are in place is key in getting these sectors investor-ready.

Research suggests that every $1 invested in ocean solutions could yield $5 in global benefits by 2050. It’s clear that the appetite for investment and interest in blue capital is growing, as evidenced by the capital mobilized and commitments made at the BEFF.

One of the clearest signs of this momentum is the growth in blue bonds — debt instruments issued by governments or private companies to finance ocean-related projects with sustainability objectives or benefits. At least $10.4 billion in blue bonds have been issued since 2018, and recent analysis of the last 1,000 green, social and sustainability (GSS+) bonds suggests that over $48 billion of those issued could be classified as blue. The potential for an ocean economy that attracts investment while managing its resources sustainably is there. We must now focus our actions on mobilizing and allocating finance to enable this transition.

5 Opportunities for Financing the Sustainable Ocean Economy

1) Redirect finance away from harmful and unsustainable practices

Estimates suggest that if business-as-usual pathways continue, unsustainable practices in ocean sectors could deplete ocean ecosystems to the point where $8.4 trillion in assets and revenues would be lost by 2035.

Subsidies, in particular, are a major factor:

  • More than $1 trillion is currently spent globally on fossil fuel subsidies. This finance represents vital capital that could be redirected to support sustainable practices.
  • An estimated $22 billion per year is being spent on harmful fisheries activities. The OECD estimates that 65% of existing fisheries subsidies risk financing unsustainable practices, such as overfishing, which can lead to the depletion of fish stocks.

These figures are only estimates. What is urgently needed is greater transparency and accountability regarding the amounts allocated to harmful subsidies. By making data on subsidy allocation and their environmental impacts publicly available, governments can be held accountable, and private sector businesses can better understand their own reliance on such subsidies.

Redirection for the private sector and development finance institutions can also be facilitated through a global ocean finance taxonomy that clearly defines what constitutes a sustainable ocean investment, and, subsequently, what does not. The UNEP-FI Sustainable Blue Economy Finance Principles provide a solid foundation, with 14 principles designed to promote responsible investment by financial institutions and organizations, such as banks, insurers and other investors. However, broad adoption and standardization are still needed.

2) Scale blended finance mechanisms and de-risking tools for investment

Blended finance vehicles enable philanthropic, private and public capital to be mobilized and directed toward specific investments in a defined asset, industry or technology. They work by combining different sources of funding from a variety of investors – for example, from a private company, a government or a philanthropy – to overcome barriers to scaling projects and account for variations in risk-return profiles. A risk-return profile is the relationship between the likelihood of losing capital (risk) and the projected financial gain (return). These instruments can help attract private capital toward projects perceived as riskier but are underpinned by public or philanthropic funding.

An example of this is a debt instrument, such as a blue bond, or an insurance mechanism, such as a parametric insurance tool. These parametric insurance tools are now being used to insure vast stretches of coastlines that harbor coral reefs or fisheries vulnerable to extreme weather events. They work by pre-assigning an event or index threshold (such as wind speed or earthquake magnitude), after which a predetermined payout will be payable to the insured. This benefits insurers by creating business in previously uninsured areas and helps the insured by enabling faster payouts, since fewer claim assessments are required and previously difficult-to-insure risks can be covered.

A recent success story occurred along a 100-mile stretch of coastline in Quintana Roo, Mexico, home to a large section of the Mesoamerican reef. In 2020, this area was hit by Hurricane Delta. Thanks to the parametric insurance set up beforehand, $800,000 was quickly released to restore large coral colonies and transplant broken coral reef fragments.

Blended finance mechanisms should be scaled up to unlock financing for future-looking projects that align with biodiversity, climate and ocean sustainability goals.

3) Incentivize public and philanthropic finance for ocean public goods

Public and concessional finance (meaning funds provided on more favorable terms, such as below-market rates) are fundamental to ocean action because they offer risk-tolerant funding for activities that do not yet generate a financial return. This type of financing can be used, for example, to support local and Indigenous communities with capacity building and promote policy reform that recognizes these communities’ rights and the connection between their well-being with the ocean.

Current estimates show that less than 1% of both philanthropic funding and public official development assistance (ODA) is directed toward the sustainable ocean economy. Given the current political climate, this value is unlikely to increase. The future of ODA, in particular, does not look bright. In 2024, funding fell by 9% — the first decline after five consecutive years of growth — with a further drop of 9% to 17% possible in 2025. This downturn stems from cuts by four major providers: France, Germany, the UK and the U.S.

Maintaining this vital source of finance requires political will, which is driven by public opinion. Governments must be incentivized to integrate ocean priorities into their national budgets, for example, through the development of a Sustainable Ocean Plan that outlines how these priorities will be integrated. Multilateral donors should also recognize the value of aligning their portfolios with sustainable ocean goals.

4) Advocate for access to affordable ocean finance for Small Island Developing States and Least Developed Countries

Small Island Developing States (SIDS) and Least Developed Countries (LDCs) are home to much of the world’s marine biodiversity but lack access to finance with favorable returns. They are on the frontline of climate change impacts and, as such, are often at the forefront of climate solutions. However, they are increasingly struggling with limited capacity and higher and higher debt burdens, driven in part by the climate risks they face, as well as the impacts of the COVID-19 pandemic.

As a result, many of these countries have low or no sovereign credit ratings (a measure of a country’s ability to repay its debts) or are not considered investment grade (in other words, they are not rated as low-risk, high-quality investments). This means that many lack deep local capital markets and access to the global bonds market.

It is therefore critical to overcome these barriers to enable stable growth amid growing climate instability. Ongoing efforts to tackle this include the Bridgetown Initiative 3.0, a call for financial reform launched by Barbados that urges a stronger multilateral response to unsustainable debt burdens on countries so they can focus domestic spending on achieving their SDGs.

The UN Pact for the Future calls on financial providers, such as multilateral development banks, to incorporate criteria related to climate vulnerability, natural capital and biodiversity conservation needs into concessional finance allocation decision-making. Technical assistance and coordinated funding are also crucial. The newly announced One Ocean Finance Facility aims to organize both to enable targeted access to concessional finance for those countries that need it most.

5) Ensure that the ocean is recognized as an investment area in existing and future multilateral mechanisms

Despite the ocean’s critical role in addressing climate and biodiversity issues, it remains unclear how much finance is currently allocated to ocean-related efforts — and how much more is needed. Estimates suggest that less than 1% of global climate funding is going toward ocean-based solutions, despite the potential of readily actionable technologies to close the emissions gap by up to 35% by 2050 on the 1.5-degree-C pathway, which needs about $1 trillion in total investment to succeed.

To better understand the current global landscape of ocean finance, and where to effectively and efficiently direct future investments, there needs to be greater consistency in how ocean-based climate and biodiversity activities are reported and tagged in both existing and future multilateral mechanisms. Governments can support this by embedding ocean finance into their Nationally Determined Contributions, ensuring their ocean-based activities are accurately reported and tagged. Linking their ocean priorities directly with climate and development strategies will help ensure the ocean is integrated in decision-making and recognized as a central pillar of national efforts.

What’s Next?

Together, the UN Ocean Conference and the Blue Economy and Finance Forum have shown the urgent need to direct more finance toward the ocean to build and maintain a sustainable ocean economy. They have highlighted the importance of having all sectors — private, public and philanthropic — behind mobilizing ocean finance, developing ocean-based capital markets and ensuring a clear, transparent understanding of how funding can be accessed.

What’s needed now is a collective effort to ensure that this momentum goes beyond the discussion at the UNOC and is translated into substantive actions that generate financial returns. Political commitment must continue to grow, as seen with the Ocean Panel focusing on ocean finance as one of its six priority actions going forward. The public sector must work quickly to eliminate harmful business-as-usual practices and implement the policies and regulations needed to attract private investment. It must also highlight the long-term financial risks of failing to adopt sustainable practices.

The investment case for the ocean should be presented clearly, and partnerships across sectors must be encouraged. Despite the challenging political climate, it is vital that philanthropic and public finance continue to flow, as only with this concessional finance can vital ocean activities, especially for SIDS and LDCs, be supported, particularly those that do not yet generate favorable financial returns.

The debt crisis must not be ignored but addressed head-on, recognizing the inequalities in impacts associated with climate change. This will require cooperation at all levels from small-scale fishers and local communities to central banks and multilateral organizations. Discussions like those in Monaco and Nice are crucial. But only by turning commitments into capital flows, pledges into projects and ambition into action can we ensure the ocean we cherish is sustained for all.