The three waves of blue finance

Wave 1 - Redirecting flows: the surface current

When we talk about blue finance, the first step, which might seem obvious but is not in practice, is to redirect existing financial flows. The ocean economy already represents considerable amounts. A key condition for ecosystem resilience is therefore to stop financing activities that harm them.

This is the first wave, the fast-moving surface current that aims to halt, as quickly as possible, negative impacts on marine ecosystems. This first requires clarifying what we mean by the blue economy. According to the World Bank, it is the “sustainable use of ocean resources for economic growth, improved livelihoods and jobs, while preserving the health of ocean ecosystems2.” 2. In other words, not all maritime activities are "blue" by nature.

The OECD, in its report The Ocean Economy in 20503, invites us to grasp the scale of the Ocean’s role in the global economy:

Seas and oceans are indispensable to life on Earth: they cover 71% of the planet’s surface, constitute 90% of the biosphere, ensure food security for more than three billion people, enable the transport of over 80% of global traded goods and host the submarine cables that carry 98% of international internet traffic.

From an economic perspective:

If the ocean were a country, its economy would have been the fifth largest in the world in 2019. Between 1995 and 2020, it accounted for between 3% and 4% of global gross value added (GVA) and employed up to 133 million full-time equivalent (FTE) workers.

The ocean economy is all around us: in our food, our tourism practices, our consumption and our energy but it is not sustainable.

The United Nations Environment Programme (UNEP) estimates that around 5 trillion US dollars are invested every year in activities that have a negative impact on nature, which is 140 times larger than investments directed to nature-based solutions, that is, solutions that rely on and preserve ecosystems.. In this context, the Ocean Panel for a Sustainable Ocean Economy estimates that at least US$550 billion per year are needed to sustainably restore the ocean.5

Part of these financial flows already exist but currently finance activities that negatively impact marine ecosystems. The priority is therefore to redirect them.

New tools for reorientation are emerging, and they are essential to define what is truly “blue”. For example, where do we draw the line between industrial and artisanal fishing? Are renewable energies truly sustainable if they have a negative impact on biodiversity?

The BEFF served as a platform to showcase these instruments:

• Taxonomies such as the European Commission's taxonomy of sustainable activities,

• Guides to help financial institutions make the transition to financing a sustainable blue economy, such as the Ocean Investment Protocoland the

• Impact analysis frameworks and Key Performance Indicators (KPIs) to assess a project's concrete benefits in terms of positive environmental impact, such as the Ocean Impact Navigator.

 

Blue Economy and Finance Forum, june 2025

These tools help to shift investment towards activities such as sustainable fisheries, marine renewable energies, resilient coastal infrastructure and blue carbon, while stopping finance for activities that harm ecosystems. For instance, during the BEFF, the French bank Crédit Agricole announced that it would cease all financing of deep-sea mining projects.

But this work must go further. To be effective, these analytical frameworks and methodologies must be embedded at the heart of corporate investment policies. This requires companies to develop clear internal taxonomies adapted to their portfolios, risks, and strategies, enabling coherent arbitrages and deeper, more durable transformation of investment decisions. Ultimately, these tools will help clarify which activities should be excluded and which should be prioritized

Redirecting flows is an essential step ("First, do no harm")but it's not enough. The current state of ecosystem degradation, biodiversity loss and CO₂ accumulation in the ocean calls for a more ambitious response that lies in how we define value. Our dominant model does not allow us to recognise the essential services the ocean provides. This is precisely what the second wave of blue finance seeks to capture, through innovative financial tools and concrete initiatives.

Wave 2 – Valuing the Invisible: Revealing the Depths

The ocean covers 70% of the planet’s surface, hosts 80% of global biodiversity, and absorbs around 30% of annual CO₂ emissions. It is our primary climate ally. Yet its contribution remains largely unrecognised in economic models.

Paula DiPerna, in her book Pricing the Priceless: The Financial Transformation to Value the Planet, Solve the Climate Crisis, and Protect Our Most Precious Asset6, summarises the flaw in our financial system as follows:

“A gaping flaw in our financial system: failure to financially value and price the priceless (atmosphere) results in intangible yet indispensable natural assets taken financially for granted, and therefore essentially laid waste.”

When the quality of the air we breathe, nature's ecosystem services provided, or the mangroves that protect our coasts from flooding are not integrated into financial equations, regeneration and environmental protection remain outside investment decision-making.

As Karen Sack, Executive Director of ORRAA, points out:

"The ocean is living capital and a highly undervalued asset class. When we invest in its health, we invest in our own."

Philippe Grandcolas, in his book “Biodiversity: Planetary Emergency”, describes three types of value of biodiversity: a use value, through the services it provides; an option value, corresponding to the potentially crucial services species could provide in the future; and finally, as we will return to in the third wave, an intrinsic value, linked to the survival of species for what they are in themselves.

Coastal ecosystems such as mangrove forests illustrate this invisible value. They can absorb up to ten times more carbon per square metre than terrestrial forests. They protect 15 million people every year from flooding and reduce storm damage by more than US$65 billion7. 7. Yet they have lost 30% of their surface area in 25 years.

Market-based finance can play a role in making the preservation and restoration of these resources visible and rewarded. That is the purpose of this second wave of blue finance.

Within the Blue Economy and Finance Forum, a call for initiatives made it possible to identify financial vehicles that change the parameters of traditional finance. Here are a few examples:

• Carbon markets: their aim is to break the traditional link between carbon emissions and economic growth. The principle is simple: an authority sets a capof emissions for a sector. Companies receive or purchase allowances ( which thay can tradegiving them the right to emit a certain amount of CO₂. If they emit less, they can sell their surplus; if they exceed their cap, they must buy additional allowances. The carbon price thus becomes an economic signal, intended to reflect the real marginal cost of reducing one tonne of CO₂. There are two main types of carbon markets: the compliance market, where companies are legally obliged to hold credits to cover their emissions, and the voluntary market , where organizations offset their residual emissions as part of their climate strategy.
  • Blue carbon credits are an extension of voluntary carbon markets applied to coastal ecosystems such as mangroves, seagrass meadows and salt marshes. These natural environments store immense quantities of carbon in their soils (up to ten times more than terrestrial forests) and play a fundamental role in coastal protection. Biodiversity credits, for their part, do not measure carbon but a net gain in biodiversity (reef restoration, increase in species, improvement in ecological status). Both mechanisms finance conservation by creating revenue streams for communities that protect or restore ecosystems.

• • • For example, the West Africa Blue initiative in Guinea aims to restore mangrove forests and generate high-quality carbon credits, thereby creating a sustainable, long-term source of income for local communities and all stakeholders involved. The project is based on a formal agreement with the Guinean government, which guarantees the durability of the actions and their integration into national policies for coastal ecosystem protection.

 

• Visit Coral bonds are thematic bonds ("blue bonds")whose proceeds are specifically earmarked for the restoration and protection of coral reefs. The mechanism is based on a traditional bond instrument – i.e. debt – but tied to ecological performance indicators: part of the coupon or principal repayment is linked to the success of restoration efforts. Investors are thus incentivised to support projects with real impact.
  • In Indonesia, the Coral Bond developed under the Blue Halo Initiative finances the restoration of degraded reefs around Bali and Nusa Penida. The objective is to improve the resilience of local ecosystems, which are essential for tourism, fisheries and coastal protection. Biodiversity performance conditions part of the bond’s final return.

 

• Parametric insurance is designed to provide rapid payouts after an extreme climate event. Unlike traditional insurance, which is based on damage assessment, parametric insurance triggers an automatic payment when predefined parameters are reached (for example, wind speed, wave height, storm magnitude). This allows immediate financing of emergency operations, which is crucial for ecosystems that require interventions within days or weeks after a shock.
  • The Mesoamerican Reef Rescue Initiative (MRRI) is a parametric insurance scheme set up by Swiss Re, WWF and The Nature Conservancy in 2016 to insure the coral reef off Cancún. This reef has considerable value for the local economy: it attracts tourists who come to admire it, and it protects the coast during storms by reducing wave energy by up to 90%.

 

By recognising the value of these ecosystem services, we begin to transform the rules of the financial game. But this second wave does not resolve a deeper problem: as long as nature is valued solely for its usefulness to humans, a fundamental part of its value remains out of frame.

Wave 3 – Counting What Matters: Changing Course

The third wave focuses on the intrinsic value of ecosystems, as described by Philippe Grandcolas: preserving the ocean for what it is, not only for what it provides us.

To transform our economic decisions in a lasting way and align them with planetary boundaries, we must change the paradigm at the very core of economic decision-making: change what we count, and thus what we value. As long as mainstream economic indicators provide only a partial view of reality by ignoring ecological factors, our micro and macroeconomic choices will remain blind to the systemic risks that threaten the stability of our societies.

This year, the French Senate report by Éric Dumoulin and Vanina Paoli-Gagin on the evolution of values in the economic sphere by 20508 sheds essential light on the limitations of current tools for measuring economic performance in the face of environmental challenges:

“Because it appears to offer a common, neutral, quantifiable and stable language and because it favours the present and, even more so, the future, economic value has taken a primary place, to the detriment of questioning the purpose of human actions, the meaning of progress, the common good.”

The mainstream response to environmental challenges currently relies on internalising externalities, as illustrated by the instruments discussed above: carbon markets, biodiversity credits, taxes, etc. While these instruments help correct certain market failures, they essentially consist of putting a price on nature, without capturing all dimensions of its value. Yet a price system alone can hardly convey the actual state of natural resources.

The principle of double materiality is a first step forward. It means taking into account both the impacts of the ecosystem on the company's activities (for example, how ocean acidification affects a fishing company's fish stocks) and the impacts of the company on the ecosystem (how the company affects local biodiversity by respecting or not respecting fishing quotas). This is a first step in accounting for the links between economic activities and environmental impacts. Also in the Dumoulin, Paoli-Gagin and Sautarel report:

"All in all, to use a classification of economic trends based on the valuation of natural capital, the challenge is to move beyond "environmental economics" to "ecological economics": the former internalizes the cost of environmental damage in production functions; the latter makes the environment a priority that determines economic activities."

This is precisely what the C.A.R.E accounting model (Accounting Adapted to the Renewal of the Environment) proposes: changing the accounting model, and therefore the decision-making model, of the company. In this framework, the imperative to preserve the company’s financial capital is extended to include the preservation of natural and human capital.
The valuation of natural capital (for example a forest) no longer rests on the profits that could be derived from ecosystem services (the market or economic value of ecosystems), but on the means put in place to preserve it, which is the amount of expenditures necessary to restore it or maintain it in its original state. Consequently, under the C.A.R.E approach, a company can only calculate its profit after ensuring the repayment of its ecological debt towards its natural and human capitals, in a way analogous to the obligation to preserve financial capital.

Biodiversity is no longer an external variable to the company, but it is integrated into the internal decision-making framework of managers. It can even lead to the (re)definition of the business model to ensure the preservation of these capitals. In such an accounting model, some activities with a negative impact on nature are abandoned because they are no longer profitable for the company.

At the macroeconomic level, the Ocean Accounts initiative, presented by Costa Rica at the BEFF, is the national equivalent of this transformation. These integrated accounts aim to go beyond GDP, which measures neither the state of ecosystems nor the resilience of territories and may even rise in response to pollution events, by combining environmental, social and economic data to measure a nation’s progress.

The Global Ocean Accounts Partnership explains that aggregating this information makes it possible to track three critical dynamics:

• the evolution of ocean wealth, including produced assets (ports) and non-produced assets (mangroves, seagrass, reefs);

• the income and living conditions of communities that depend on the ocean;

• blue economic production, beyond simple sectoral GDP

 

Costa Rica has committed to establishing comprehensive Ocean Accounts by 2030, integrating natural capital and economic and social data into public decision-making. This approach paves the way for more coherent marine governance, capable of steering investments towards climate resilience, marine spatial planning and sustainable economic development.

Conclusion

Finance has always served to connect the present with the future. It allows us to invest today in benefits that will only materialise tomorrow. As Sindre Østgård, Partner at We Are Human and 2050.do, puts it:

“I fundamentally believe that when we invest, we don't predict the future. That's like looking backwards. We are shaping it,”

As a plurality of futures unfolds before us, a more radical question emerges: what future do we want to finance?

Perhaps answering this requires rethinking our relationship with the living world. For too long, our relationship with nature has been that of a creditor: we extract, we exploit, we treat the ocean as a stock of assets to which we are entitled. This is the logic of debt: taking today while shifting the burden of repayment onto tomorrow and onto future generations.

The regenerative blue economy invites us into an entirely different posture: that of capital. No longer seeing nature as a resource at our disposal, but as living capital in which we are co-investors and co-dependent. To think of the ocean as capital is to understand that our prosperity is tied to its own; that restoring a reef, protecting a mangrove, or preserving a species is not a cost, but an equity stake in the very conditions of our future.

Redirecting flows, valuing the invisible, and accounting for what matters: these three waves are more than technical transformations. They signal a deeper shift: the emergence of a finance that is no longer merely a mechanism for allocating capital, but a tool for reshaping our relationship with the world.

Rather than continuing to make investments that deepen our ecological debt while creating the illusion of value, let us commit to investing in the natural, human, social, and financial capitals that truly strengthen the foundations of our shared future.

Marianne Carpentier and Lucie Galinon