OceanSummit Day 2: Investing in a Blue Economy

Attendees included 27 entrepreneurs in the Builders Initiative and S2G Ventures portfolios, seasoned investors, corporate and NGO partners, as well as 20 or so first-time ocean funds and accelerators representing close to $1.2 billion of existing and committed capital for the oceans sector. Over the course of the day, our speakers dove into the developments that are enabling the oceans sector to shift from a philanthropic cause to an investable asset class.

Why Now? Why Oceans?
Cristina Mittermeier, renowned conservation photographer, marine biologist, author, and co-founder of SeaLegacy, kicked the day off with a visual journey that highlighted the importance of storytelling when it comes to ocean conservation. Currently, only 8 percent of the ocean is protected, and only 3 percent is highly protected. But the ocean is not just a victim of bad practices–it’s a powerful climate change solution. While most people don’t understand scientific language and may feel intimidated by data, filmmaking and other storytelling lower the bar to entering the conversation. As she flipped through pictures taken from a life spent photographing nature around the world, Mittermeier spoke of the need to create important and compelling stories about our global ocean system to cast it in a new light and encourage private capital and investment in the sector.

Seeking Alpha: Don’t Hate the Player or the Game, Change it
Sanjeev Krishnan, Chief Investment Officer at S2G Ventures, spoke about how partnerships with natural assets will be essential to addressing our economic systems that are currently stalling in terms of potential and productivity. Achieving positive returns during this time of increased risks and high GDP volatility will require new thinking, approaches, risk capital, and partnerships with multiple stakeholders.

To unlock the potential of natural systems we need changemakers to invent the business model, products, and technologies, and we need to be creative and take risks while embracing the complexity of natural assets. Energy is already going through this J-curve, and agriculture is just starting to see the unlock. Ocean solutions can generate the same or better returns as soil health, renewable energy, or forestry solutions. If done well, these returns can be more productive and profitable than the ones we see today while protecting natural ecosystems.

Growing the Financial Capital Markets for Oceans
Historically, oceans solutions have mostly been philanthropically funded, but as the sector grows there is an increasing number of financial vehicles available to support ocean entrepreneurs. Larsen Mettler, Managing Director at S2G, moderated a panel with Salman Mahdi, Global Vice Chairman at Deutsche Bank, Francisco Saraiva Gomes, Chief Investment Officer at Oceans 14 Capital, Adam Kriger, Executive Partner at ACON investments LLC, and Dale Galvin at Pegasus Capital Advisors. The ensuing discussion explored these different asset classes to learn about their goals and the risks and opportunities ahead. Panelists spoke about how the degradation of the ocean is a clear example that the current market structure is failing. The industry is highly fragmented with a lot of exposure to macroeconomic drivers, but we are seeing an increased willingness to support the industry with a wide variety of financial vehicles. Getting creative with blended capital can lay the foundation for derisking oceans solutions and proving their potential, which will enable a new wave of investors who might not have as much experience in the ocean sector to enter the space.

Market Signal: Corporates Leaning In

In addition to the increase in interested investors, another important market signal is whether multinational corporations are leaning in since they offer both validation and exit opportunities for companies. In a panel moderated by Kate Danaher, Managing Director at S2G, Michael Berger, Head of Insure AI at Munich Re, Tim Noonan, Managing Director at Cargill, and Dinsh Guzdar, partner at Rich Products Ventures, shared insights into why their companies decided to get involved in the ocean space. Panelists spoke about balancing the desire to move the needle and meet consumer demand for sustainable seafood with the need to continue to support their core business and shareholders. The opportunity for these companies will be to find ways to work within and expand on their core businesses to meet consumers where they are and contribute to better methods of production.

The Oceans-Climate Solution
With the right market-based solutions, there is great potential to not only mitigate the impacts of climate change on our ocean but to address climate challenges through ocean economies. Laura Rodriguez, Senior Program Officer at Builders Initiative, spoke with Megan Reilly Cayten, Senior Investment Manager at Climate Asset Management and Senior Advisor to the Oceans 2050 Foundation, Emily Landis, Climate and Ocean Lead at the Nature Conservancy, and Karen Sack, Executive Director at Ocean Risk and Resilience Action Alliance, about the risks and potential for nature-based solutions that create value for investors and local communities. The panelists discussed best practices for incubating projects, such as ensuring co-benefit values to gain community buy-in, utilizing blended capital and cultivating a willingness from buyers and sellers to go on this journey together, continually evolve, and manage their risk entering into new market sectors for climate solutions.

An Ocean of Data and What in the World to Do with It
Data collection and analytics are essential for investing in ocean-based solutions and unlocking opportunities from improving weather forecasts to decarbonizing shipping to validating carbon sequestration. Tim Janssen, CEO of Sofar Ocean, Jeffrey Rodgers, Program Manager at the DARPA Strategic Technology Office, and Zara Khan, Business Development Manager at X, The Moonshot Factory, discussed the need for affordable, accessible and easy-to-use data and the multitude of potential applications. The key to really maximizing the potential of ocean data is to figure out how to create value and monetize it while still breaking down silos and making it more widely available and usable.

The Future of Seafood Production

Aquatic food will play a key role in feeding a growing population, but challenges in production systems, governance, innovation, and capacity must be addressed for the sector to be sustainable, profitable, and abundant. Larsen Mettler moderated a panel with Mikel Durham, Board Member at Tyson and prior CEO of American Seafoods, Arye Elfenbein, Co-Founder of Wildtype, and Kjartan Olafsson, Chairman of the Board at the Icelandic Salmon Company, about how their respective companies are tackling the future of seafood from cultivated fish to sustainable fisheries and aquaculture. It will take a combination of all of these efforts to create a seafood sector that can both support consumer and environmental needs into the future.

Mobilizing Capital: The Power of the Flywheel

Peter Bryant, Program Director of Builders Initiative, sat down with Lukas Walton, Founder and CEO of Builders Vision to learn about his experience with developing a multitool oceans investment platform. The ocean has so many compounding unknowns and structural issues, and different kinds of capital are needed to solve some of these very complex challenges. Bryant and Walton discussed the importance of crowding capital to right misaligned incentives, building partnerships between industry and nonprofits, creating community to de-risk investments and making sure that people who are closest to the problems can be involved in the solutions.

Hope in the Water

It was such a treat getting to preview the new Fed by Blue docuseries, Hope in the Water, presented by Jennifer Bushman, Founder of Fed by Blue. The docuseries explores innovative solutions to restoring our oceans while producing abundant seafood. We also enjoyed a fireside chat where Peter Bryant spoke with one of the show’s producers: Emmy-winning and four-time James Beard Award-winning TV personality, chef, writer, and social justice advocate, Andrew Zimmern. They discussed Zimmern’s lifelong connection with the ocean, the communication problem he sees in the sector, and how the docuseries is working to elevate the human stories of the people around the world who work on and in the water every day to make these issues and solutions more tangible for viewers. According to Zimmern, “If we are going to create a healthy blue economy, we are going to have to pull many levers at once…But these problems present us with an opportunity to lead and that opportunity should be celebrated.”

Shoring Up the Blue Economy

As many of our speakers voiced, we are only at the beginning of this journey to reshape the ocean economy into one that benefits marine ecosystems, consumers, industry and the billions of people who interact with the ocean in different ways. We look forward to many more opportunities to not only connect with our ocean community but to bring more investors, companies, organizations and policymakers into the fold to advance the conversation, establish partnerships and devise novel solutions. Please don’t hesitate to connect with us!