Assessing the global value at risk in the sustainable blue economy

Many decision makers in the public and private sectors currently fail to grasp the full implications of unsustainable development in the blue economy,  and its impacts on the value of their natural ocean assets (for example mangrove forests or coral reefs).   Yet managed sustainably, the Ocean could yield up to $2.5 trillion per year, and continue to  support  the  health, livelihoods,  and well-being  of  40% of the world’s population.

There is an urgent need to rethink how to leverage the power of global shareholders and enable them to redirect capital towards companies that value a sustainable blue economy.  ORRAA partner WWF is leading on the design of a Global Ocean Value at  Risk Assessment – building on the 2019 Value at Risk in the Baltic Blue Economy  feasibility study –  to show global investors how much value they risk if they pursue business-as-usual  investments  that do not take into account dependencies on the natural environment.

The  assessment  uses  an innovative methodology to translate ocean environmental risk into financial risk metrics, including  valuing the  risk  from  environmental and  climate change. This offers  a credible  and science-backed model  –  adaptable to portfolios by risk managers and quantitative analysts  -  which shows  the impacts and risks of ocean decline on multiple asset classes.

Using  the  new  assessment tool to scale  the  analysis globally,  WWF is producing  a report to demonstrate  how much value may be at risk to global investors should BAU investment continue, and should the Ocean continue to degrade. The report, named  Value  at Risk to the Global  Sustainable  Blue Economy, is expected to be published  later in  2021.