Until very recently, human beings assumed the oceans could be used as gigantic rubbish dumps where waste and chemicals of every kind could be poured in unlimited quantities. Given the sheer size and depth of the ocean surface, those activities were thought to carry no significant consequences, since it was commonly accepted that the sea was capable of \u201cpurifying\u201d all those substances naturally. That perception has changed substantially, and today we are fully aware that the marine environment is degrading at an accelerating rate, taking whole habitats and a great variety of species with it. It is for this reason that blue bonds have emerged \u2014 bonds that make it possible to preserve the oceans, as we shall see.<\/p>\n
We can define marine pollution as the introduction into this physical environment of harmful substances and elements that do not belong there. The long list of pollutants arising from human activity includes herbicides, pesticides, chemical fertilisers, hydrocarbons, detergents, plastics and a great deal more besides. Many of these substances end up on the ocean floor, where they accumulate, often broken down into vast quantities of tiny particles invisible to the great majority of animal species and which end up being ingested by fish of every kind. Once that has happened, those substances enter the global food chain and find their way back onto our plates.<\/p>\n
As the former UN Secretary-General Ban Ki-moon observed: \u201cThe oceans are key to sustaining life on the planet. The oceans are the conduit through which 90% of world trade travels, making this the physical space that connects the greatest number of people, markets and livelihoods. The oceans offer a wide range of benefits for human well-being and prosperity \u2014 food production, job creation, the moderation of global temperature, tourism, and a source of energy.\u201d<\/p>\n
It was against this background that, in 2018, the Seychelles archipelago made the world’s first issue of blue bonds. Their purpose was simply to raise funds with which to defend marine life. And although the sum raised was not especially large \u2014 just 15 million dollars \u2014 the issue amounted to a genuinely interesting innovation in financial markets. The new blue bond showed that developing a new financial product could be squared with the necessary preservation of the oceans. Finance and the environment are not incompatible; on the contrary, they can and must go hand in hand if what we intend is to build a better world and, above all, a more sustainable one.<\/p>\n
This first blue bond was backed by the World Bank and by The Nature Conservancy (TNC), an international non-profit dedicated to conserving biodiversity and the natural environment. The funds raised went towards protecting dolphins and other marine life \u2014 which, besides helping to protect the planet, is critical in a country such as the Seychelles, whose economy rests on fishing and nature tourism.<\/p>\n
In designing the bond, the country received technical assistance from the World Bank, without which structuring the product properly would have been very difficult. This first bond opened a new window of opportunity: a window through which capital markets could connect with investors who, beyond seeking a certain return on their money, also want to play a part in building a more sustainable world. It is worth stressing at this point that sustainable finance is not philanthropy. These are profitable products which add to their DNA other elements and values compatible with the sustainability of the planet.<\/p>\n
It should not be forgotten that the Seychelles is an archipelago of 115 islands surrounded by a vast expanse of ocean \u2014 a country turned towards the sea, with two sources of wealth that account for most of its economy: fishing and clear-water tourism. Tourism employs 30% of the workforce, while fishing accounts for 95% of exports; its substantial fishing industry employs roughly 17% of the population. On those figures, keeping the ocean in good condition is central to the lives of both the islanders and the tourists who visit them. But what exactly were the funds raised through the Seychelles blue bonds spent on?<\/p>\n
The money raised went towards expanding the country’s marine protected areas and towards better infrastructure for its fish markets. Grants with conservation objectives were also awarded to various local ocean-related industries. If this bond demonstrated anything, it is that the interests of institutional investors can be combined with building a sustainable blue economy that supports marine ecosystems. It proved that innovation in the sustainable finance market keeps growing, and that there are ever more products and tools available to a growing number of investors backing a world that is more sustainable and more respectful of the environment.<\/p>\n
Blue bonds are a financial product that still needs to develop, but their potential is considerable, since we cannot forget that the oceans make up an immense territory covering no less than three quarters of the planet. Alongside the problem of ocean conservation we have a growing body of investors who no longer look at short-term returns as the only variable worth considering, but seek returns over the long term, always on the basis of sustainability criteria. There is no going back on sustainability, and the proof is that environmentally based assets have been growing exponentially in recent years, on the supply side (issuers) as much as on the demand side (investors).<\/p>\n
Launching new financial products such as blue bonds will invigorate the sustainable asset market further still. To that end they need to be designed creatively, so as to appeal to potential investors. We know the oceans face a great many problems \u2014 acidification, loss of diversity and species extinction, the enormous quantities of waste poured into the sea every day, and more. At the same time, though, there are solutions. They call for investment in protecting and caring for marine ecosystems. And that is where blue bonds ought to play a decisive part, as an instrument that helps preserve the oceans.<\/p>\n
M\u00e1ximo Santos Miranda<\/a> \u2014 Lecturer at CMI Business School<\/a><\/em><\/p>\n","protected":false},"featured_media":3788,"template":"","meta":{"_acf_changed":false},"categorias-publicacion":[108],"class_list":["post-21380","publicacion","type-publicacion","status-publish","has-post-thumbnail","hentry","categorias-publicacion-publications"],"acf":[],"_links":{"self":[{"href":"https:\/\/cmi.es\/en\/wp-json\/wp\/v2\/publicacion\/21380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cmi.es\/en\/wp-json\/wp\/v2\/publicacion"}],"about":[{"href":"https:\/\/cmi.es\/en\/wp-json\/wp\/v2\/types\/publicacion"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cmi.es\/en\/wp-json\/wp\/v2\/media\/3788"}],"wp:attachment":[{"href":"https:\/\/cmi.es\/en\/wp-json\/wp\/v2\/media?parent=21380"}],"wp:term":[{"taxonomy":"categorias-publicacion","embeddable":true,"href":"https:\/\/cmi.es\/en\/wp-json\/wp\/v2\/categorias-publicacion?post=21380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}