Editor’s Note: This is the first post in a three-part series examining how the global sustainability agenda will boost impact investment in natural resources. Stay tuned for parts two and three – featuring investment trends in minerals, forestry and land.
By Marta Maretich
With sustainability a growth area for world markets — and a priority for many world governments — there is a new focus on impact investing in natural resources. This three-part series examines how the global sustainability movement is driving the markets in four key natural resource sectors — oceans, minerals, forestry and land — and shaping the financial choices of impact investors around the world.
Part I: Oceans
Natural resources have always been precious to mankind, and today they are more in demand than ever. Population growth, climate change and the rising affluence of developing nations are putting a strain on the planet’s limited resources, and there is worldwide concern about future shortages and the destruction of ecosystem services that result from over-exploitation.
But while the pressures on our resources are getting bigger — and the consequences of depleting them are getting clearer — there are positive developments, too. A global movement for sustainability, led by governments, supported by international organizations and driven by public demand, is gathering momentum — and this has important implications for the social and impact investing sector.
Sustainability goes mainstream
Once a thing of the green fringe, sustainability is now mainstream. Governments are the key drivers of today’s sustainability agenda as they increasingly use policy, regulation and subsidy to support the development of new kinds of businesses and convert existing businesses to more sustainable practices.
And it’s not only governments: Working in concert with them, international bodies like the UN, World Economic Forum and World Bank now see natural resources as key to developing some of the world’s poorest communities. They are launching programs designed encourage sustainability and establish standards in a range of resource sectors as part of their efforts to raise living standards.
Meanwhile, public awareness of sustainability issues increasingly drives consumer choices. Businesses — even those that once ignored the idea — now know that being able to demonstrate sustainability makes economic sense. As a result, jobs in sustainability are multiplying as businesses hire analysts, consultants and other specialists to manage their sustainability and reporting commitments.
Resources take center stage
With sustainability a growth area for world markets — and a priority for many world governments — there is a new focus on natural resource investing. The emphasis is now on finding ways to make more of nature’s gifts while preserving and maintaining them for the future. New businesses — and new ways of doing business — are springing up, encouraged by government policy and shaped by the expertise of development and philanthropic organizations who have pioneered in the areas of sustainable use of resources.
Investing in ocean resource management
The world’s salty waters are a focal point for resources-based activity today. Concerns about overfishing and acidification, a consequence of the seas absorbing high CO2 emissions, are leading governments, environmental campaigners and business leaders to place a new emphasis on the oceans, and this is changing the investing landscape.
On the governmental side, 2013 saw the U.S. instituting the National Oceans Policy — joining other governments including Australia, South Africa, Namibia and the Philippines in establishing comprehensive, future-focused policies for ocean resource management.
The social enterprise sector kept in step, highlighting the issue by including an ocean themed “track” at SOCAP13. For the first time, veteran campaigners and ocean champions discussed ocean topics along with journalists, entrepreneurs, and impact investors from other sectors — including small-scale agriculture, health and poverty alleviation — all of which are connected to ocean and coastal issues.
Meanwhile, in the private sector, The Economist is throwing its weight behind sustainability issues as it plays host to the World Oceans Summit in California this month.
These developments set the stage for a mini-boom for sustainable marine businesses in areas like fishing, aquaculture and energy and mineral extraction. New government regulations will also drive growth in compliance industries, such as environmental remediation and business-to-business services, providing sustainability reports and the like.
Image credit: Micah A. Ponce, Flickr
Marta Maretich is Maximpact’s Chief Writer and Blog Editor. Maximpact is a free global portal for the social, impact and sustainability sectors. It operates as a secure web-based listing service that allows sustainability, philanthropy and CSR professionals, as well as entrepreneurs, intermediaries, and funds to share information about initiatives and impact investment deals, online. For more information on the platform or to review latest impact projects visit: www.maximpact.com. This article first appeared on Maximpact’s blog.