The new UN oceans treaty will help create an environment for the development of blue bonds and other nature-based investment vehicles. Institutional investment in ocean-related assets – the so-called blue economy – is expected to ramp up as a result.

The UN’s High Seas Treaty (HST) is the first legally-binding international agreement to safeguard marine biodiversity in international waters.

“Investors with nature and biodiversity policies which do not make any reference to oceans and marine biodiversity are simply not credible, going forward,” said Will Oulton, vice chair of the UK-based Marine Conservation Society.

The treaty is expected to benefit investors in a number of ways, increasing the transparency of companies’ activities in relation to the ocean, with the requirement for conducting Environmental Impact Assessments (EIAs).

“The accessible database that will be developed will mean companies’ ocean-related activities and projects will be visible to investors,” said Oulton.

The challenge is to create a financial eco-system that enables investors to engage with the blue economy. The funding shortfall for Sustainable Development Goal 14 - Life Below Water - stems mainly from a lack of scalable and demonstrably profitable opportunities for big investors.

Experts agree the HST should help overcome these obstacles, by stimulating the development of more financial instruments such as blue bonds and nature-based investment funds, which treat ocean biodiversity and ecosystem services as assets worth protecting.

Karine Hirn, Hong Kong-based partner with East Capital hails the treaty as “a historic moment after two decades of negotiations”.

“There are so many global agreements and initiatives in havoc right now that it is really positive this one seems to be firmly anchored, specially at a time when mineral hunting deep sea is increasingly becoming a hot topic.”

By establishing a clear legal framework for activities beyond national jurisdiction, the HST provides the regulatory certainty that institutional investors often require to direct capital into ocean conservation and sustainable use initiatives.

To date, institutional investor activity has been limited, with few asset owners or managers having specific policy positions relating to the oceans. One exception is Norway’s oil and gas fund, Norges Bank Investment Management, that has published its expectations of companies in relation to ocean sustainability.

“We believe that the continued degradation of the ocean could reduce companies’ ability to generate value for investors in the long term. We wish to support companies as they develop their strategy towards more sustainable business operations,” said the fund in its official policy paper.

The risks of continued ocean degradation are too great to ignore, say environmental experts and investors. “Considering that 80% of the pollution that enters the oceans is derived from land-based economic activities, investors cannot ignore the potential risks of this impact,” said Hong Kong-based environmental philanthropist Douglas Woodring.

Key investment opportunities for investors from the HST include ocean-based renewable energy sources, such as floating wind platforms and tidal devices. The HST's emphasis on establishing Marine Protected Areas (MPAs) and conducting EIAs will also create demand for new technologies, including advances in technology that improve the environmental performance of shipping.

In 2025, the total estimated value of the ocean's assets increased to over $32 trillion, mainly from fisheries and aquaculture, tourism and recreation, shipping and transport.

These increased economic outputs are driven by the growth in blue economy sectors such as renewable energy, expanding marine biotechnology and pharmaceuticals, and the rising demand for shipping and global trade.

The fact that Beijing ratified the HST is important, said Hirn, as the Chinese fishing industry is by far the largest in the world. Coinciding with the HST coming into effect, China has offered to host the UN Agency in charge of implementing the treaty.

But Woodring warns that without restoring dwindling ocean natural capital, future investment allocations to the ocean economy could prove to be hollow.

“The investment in the restoration of ocean assets must precede their exploitation, and a new approach is needed if we want to rebuild the capacity of the ocean to feed, support and keep us healthy and prosperous.”

The United Nations Environment Programme - Finance Initiative, UNEP-FI is supporting this shift by helping financial institutions align capital flows with ocean health, through its Sustainable Blue Economy Finance Initiative. Details here: https://www.unepfi.org/blue-finance/

The Ocean Investment Protocol is a framework for financial institutions, policy makers and industry leaders to lead the growth of the sustainable ocean economy: https://www.unepfi.org/publications/ocean-investment-protocol/

For more information on the Marine Conservation Society’s approach to the issue click here: https://www.mcsuk.org/news/exploring-the-state-of-blue-finance/