Insurance behemoths AXA and Willis Towers Watson (WTW) are among the first signatories of a United Nations-backed initiative designed to protect the ocean against the impact of climate change.
Launched ahead of the start of the COP26 summit, the #BackBlue Ocean Finance Commitment, spearheaded by the Ocean Risk and Resilience Action Alliance (ORRAA), aims to encourage financial and insurance companies to incorporate ocean conservation in their business decisions.
“The scale and urgency of the challenges posed by ocean-derived risks call for a transformative and global response,” said Ulrike Decoene, group chief communication, brand, and sustainability officer at AXA. “Through the #BackBlue Ocean Finance Commitment, the private sector, including the insurance and wider finance industry, can collectively empower and mobilise action to build resilience providing long-term benefits for ocean-linked economies, local communities, and biodiversity across the world.”
John Haley, WTW chief executive officer agreed, adding that his company “sees that climate risk and ocean risk together equal financial risk.”
“We are excited to #BackBlue to drive action from financial institutions for a sustainable ocean and a sustainable blue economy,” he said.
International advisory and management firm Palladium is also one of the first to commit to the programme, with more businesses expected to add their signatures in coming weeks.
“It is encouraging to have the first wave of signatories to the #BackBlue Ocean Finance Commitment and today we are calling on other financial institutions to sign up,” said Karen Sack, executive director and co-chair of ORRAA. “While it is focused on the private sector, this really is in everyone’s long term interest. The climate emergency is Code Red for the planet – responding to that requires us to #BackBlue.”
The #BackBlue Ocean Finance Commitment combines the following elements to ensure that a blue lens is applied to decision-making by the sector:
- Setting robust net-zero commitments by joining one of the UN Race to Zero Financial Initiatives and by adopting science-based targets to reach net zero no later than 2050 in line with their criteria, which include aligning investments with the UN-convened Net Zero Asset Owner Alliance’s target-setting protocol
- Driving financial system policy change by adopting corporate ESG standards and disclosures that align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and adopting taxonomies on sustainable economic activities that define common and clear criteria for classifying projects and investments as sustainable
- Investing in nature-positive outcomes for the ocean, based on the UNEPFI Sustainable Blue Economy Finance Principles, that drive investment into coastal and marine nature that halts biodiversity loss and sustains and builds the benefits that these ecosystems provide while preserving and improving livelihoods
- Accelerating the transition towards a healthy and sustainable ocean through lending, investment, and insurance practices that mitigate ocean risk and build the resilience of climate vulnerable coastal communities and by supporting work to raise an initial $500 million of investment into coastal nature by 2030 to create scalable and investable finance and insurance projects and products
- Joining ORRAA so that the challenges posed by ocean risk can be met by pioneering and innovative finance products that focus on driving investment into ocean and coastal natural capital that reduce risk, build a sustainable ocean, and regenerate its biodiversity
The initiative is also being backed by the UN Race to Resilience, World Economic Forum, Friends of Ocean Action, International Union for Conservation of Nature (IUCN), and the United Nations Environment Programme Finance Initiative (UNEPFI).
“A healthy ocean plays a vital role in regulating the global climate, and mitigating the impacts of the climate crisis,” said Jessica Smith, nature lead at the UNEPFI. “Ambitious action needs to be taken from all strands of society – including private finance – in order to deliver a sustainable blue economy that fully values natural capital.”
Last May, the UK became the second G7 country after Canada to become a full member of the ORRAA. All G7 nations are observers of ORRAA, as are India, Mexico, Norway, and Fiji.