Climate change is a problem important and urgent enough that investors are starting to seize the opportunities that arise when they try to solve the problem. Now they have begun to cast their nets wider for other adjacent opportunities.
Technology that serves to preserve the oceans while replacing older, more harmful ways of generating energy and food appears to be one such opportunity. When we asked 10 industry investors to share their thoughts on the space, we quickly learned that ocean conservation tech startups are seeing increasing interest from generalist investors as climate change is hot and people are looking for more ways to combat climate change. its effects.
“Climate change used to be more focused on terrestrial operations. It’s now “warming up” for ocean conservation,” Daniela Fernandez, managing partner of Seabird Ventures, told ukbusinessupdates.com.
The world’s oceans and climate have always been closely linked. Winds generate ocean currents, which in turn influence weather patterns both above open water and deep within the continents.
“Our planet is 70% ocean, so the urgency of facing and solving climate change can only be properly addressed if we include the ocean in the equation,” said Rita Sousa, partner at Faber Ventures.
The open ocean also contains enormous amounts of energy. Previously, access meant drilling into the ocean floor to tap hard-to-reach deposits of oil and gas. But today it increasingly means tapping into the tremendous energy represented by the winds and waves of the ocean. Only offshore wind has the potential to meet global electricity demand by 2040, according to to the IEA, which is well more than all offshore oil and gas production today.
Stephan Feilhauer, director of clean energy at S2G Ventures highlighted the viability of technologies such as offshore wind as commercial alternatives to fossil fuels: “Offshore wind has established supply chains around the world. It is now possible to produce, install and operate gigawatts of offshore wind energy using technology and equipment that is well established and has years of operational data to help us understand its performance. Offshore wind is the only sustainable technology at sea that meets these criteria today.”
The oceans also constantly exchange gases with the atmosphere, and most importantly, about 30% of all carbon dioxide pollution is extracted and stored. The ocean’s ability as a carbon sink has caused problems for countless marine animals, which depended on historically stable acidity levels that are now rising. However, this very capacity also creates opportunities to put important nutrient cycles to work and absorb humanity’s excess emissions.
“A healthy ocean will continue to provide critical opportunities for carbon sequestration,” said Peter Bryant, program director (oceans) at Builders Initiative. “There are a number of opportunities to increase the ocean’s carbon storage capacity. We have biological approaches including ecosystem restoration, seaweed farming and iron fertilization; chemical solutions where you use minerals to fix dissolved carbon dioxide in bicarbonates; and electromagnetic approaches that store carbon by running electrical currents through seawater.”
Founders and investors have a growing appreciation for the ocean’s potential as a source of renewable energy and its capacity to mitigate and even solve the climate problem. “We have faith in the resilience of the ocean here. It’s simply one of the best tools we have in the fight against climate change, and that means opportunity,” said Reece Pacheco, partner at Propeller. “Without the ocean, we will not achieve our climate goals. Point.”
Christian Lim, managing director at SWEN Capital Partners, agreed: “It has taken too much time, but at last the ocean is being recognized as a critical part of our fight against climate change.”
We spoke with:
- Daniela V. Fernandezfounder and CEO of Sustainable Ocean Allianceand managing partner Seabird companies
- Tim Agnewgeneral partner, Daring ocean ventures
- Peter Bryantprogram director (oceans), Builders Initiative
- Kate Danahergeneral manager (oceans and seafood), S2G Enterprises
- Francis O’Sullivangeneral manager (oceans and seafood), S2G Enterprises
- Stephen Feilhauergeneral manager (clean energy), S2G Enterprises
- Sanjeev Krishnansenior director and chief investment officer, S2G Enterprises
- Rita Sousapartner, Faber Ventures
- Christian Limedirector, SWEN Blue Ocean partners
- Reece Pachecopartner, Propeller
Daniela V. Fernandez, Founder and CEO, Sustainable Ocean Alliance (Seabird Ventures)
Climate change is the elephant in the room. Has the rising profile of the problem sucked the air out of the room or is it drawing attention to ocean conservation that otherwise wouldn’t be there? What has changed in the past five years?
Climate change has been a topic for decades. About a decade ago it was a “nice to have”: “If you have the extra money to do a climate risk assessment, then we’ll dedicate it to climate change.”
Now it’s more of a “must have”. If we don’t address climate change, we will see more extreme weather events. In the past five years, we’ve seen an increased focus on ocean conservation, but there’s still a funding gap of $149 billion a year. Climate change used to be more focused on terrestrial operations. It is now “warming up” for ocean conservation.
We are only now beginning to see a clear shift in tone. The thought used to be that “the ocean is a victim of climate change”, but now the thinking is more “the ocean can become a climate hero” and play a big role in reducing our carbon footprint. However, this shift is still in its infancy. In particular, the philanthropic community is just beginning to recognize the urgent need to support efforts to develop ocean-based climate solutions.
Until now, most climate financers have focused on terrestrial or atmospheric issues, and ocean financers on important but only indirectly climate-related ocean issues, such as ending unsustainable fishing practices and establishing marine protected areas. The ocean is already the world’s largest carbon sink, and we need to better understand what absorbing all that carbon does to ocean ecosystems, and how much more it can potentially contribute without disrupting other critical ecosystem functions.
It is also encouraging to see governments taking action to really prioritize and create financial incentives for investment in climate/ocean innovations, such as the bipartisan infrastructure bill passed in the US in 2022. “Work is no longer an option if we don’t have a livable planet for the next seven years. We see society resetting its priorities and the climate is currently one of the highest.
Climate change has been called “recession-proof” because governments and investors have come to appreciate the scope, scale and urgency of the problem. Do you think that also applies to ocean conservation technology?
Yes. Climate change and ocean recovery are inextricably linked. The ocean is humanity’s greatest defense against climate change, as it produces more than half of the air we breathe and absorbs 93% of the excess heat from global warming.
Ocean technology and climate change companies and investors all have the same goal. The urgency of the climate crisis has kept passionate financiers and entrepreneurs involved in developing solutions, regardless of the state of the economy.
Climate change has had a huge impact on the oceans, with causes ranging from rising water temperatures to increased acidification. How do you approach the issue of climate change in your investments?
Seabird Ventures internally monitors the impact and reports on social and/or environmental factors in our investments. We have reported externally on the following key areas of ocean impact:
- Remove or avoid blue carbon & CO2e: Initiatives in this category are incredibly important for capturing and avoiding harmful greenhouse gas emissions, which contribute to climate change and ocean acidification. The impact of these companies is measured by the weight of CO2e emissions reduced or captured as a result of the solution.
- Waste reduction and circular use: We focus on companies that reduce the amount of solid waste and plastic that pollute our oceans. Two commonly used approaches are preventing plastic from leaking into waterways and solutions for plastic cleanup. Plastic pollutants are responsible for suffocating marine life and destroying both marine and coastal ecosystems. Impact tracking in this category is done by measuring the mass of reduced, avoided or recycled plastic. Companies offering fully biodegradable plastic alternatives are also being considered in this area due to their ability to replace the use of traditional plastics.