Download

Tina M Fordham

Jason Channell

Elizabeth Curmi

Zoe Whitton

The 17 United Nations Sustainable Development Goals aim to tackle the challenges, issues, and injustices facing the world by 2030, but the goals themselves are complex. They are arguably all inextricably linked, with numerous feedback loops, not all of them positive. Trillions of dollars of capital wants to invest sustainably but struggles to translate an investment philosophy, which desires alignment with the SDGs, into a practical investment strategy given that complexity. This report tries, as far as possible, to simplify the SDGs — to examine those interlinkages, to determine the driving forces and resulting benefits, and thereby determine a set of critical paths — our so-called 'pathways to success' — which can lead quickly and most effectively to the achievement of the goals. It allows us to identify who is best placed to do what, from the public sector to the private sector to the investment community, and what their route in might be. We examine the goals individually, attempting to lay out both the incremental financial cost/opportunity of achieving the goal, and the human benefit that might be gained by solving it. In a world of scarce resources, it also provides an indication of which paths might achieve the broadest human benefit for the least financial cost though this does not mean these are the most important — it is not by accident that all roads on our 'pathways to success' lead to the eradication of poverty. We identify incremental physical investment needs or opportunities in water, energy, and the circular economy alone of $1.5 trillion per year, while social investment areas of education, health, and hunger add up to an annual incremental opportunity of $800 billion. To be sure, these are enormous sums, but much smaller than the sums of capital looking to invest sustainably and tiny in relation to the human benefits that could be achieved. We also examine the innovative financial instruments and frameworks needed to allow that capital to flow to aid in the achievement of the goals. The SDGs represent the challenge of our generation but a challenge which we should embrace, as the benefits for those suffering most, as well as to the whole global community, would be immeasurable if we were to succeed. By identifying the lowest hanging fruit, the feedback loops, the critical paths, the scale of the opportunity in both human and financial terms, and who might do what, we hopefully break the sometimes daunting SDGs down into a roadmap — a framework which allows all elements of society, from policymakers, to corporates and the financial community, to set out in partnership down a pathway to a better, fairer, wealthier, more inclusive, cleaner, and more sustainable world that we can be truly proud to leave for our children.Authors: Jason Channell,Elizabeth Curmi, PhD.,Zoe Whitton,Tina M Fordham,

<p>The 17 United Nations Sustainable Development Goals aim to tackle the challenges, issues, and injustices facing the world by 2030, but the goals themselves are complex. They are arguably all inextricably linked, with numerous feedback loops, not all of them positive. Trillions of dollars of capital wants to invest sustainably but struggles to translate an investment philosophy, which desires alignment with the SDGs, into a practical investment strategy given that complexity.<br /><br />This report tries, as far as possible, to simplify the SDGs &mdash; to examine those interlinkages, to determine the driving forces and resulting benefits, and thereby determine a set of critical paths &mdash; our so-called 'pathways to success' &mdash; which can lead quickly and most effectively to the achievement of the goals. It allows us to identify who is best placed to do what, from the public sector to the private sector to the investment community, and what their route in might be. We examine the goals individually, attempting to lay out both the incremental financial cost/opportunity of achieving the goal, and the human benefit that might be gained by solving it. In a world of scarce resources, it also provides an indication of which paths might achieve the broadest human benefit for the least financial cost though this does not mean these are the most important &mdash; it is not by accident that all roads on our 'pathways to success' lead to the eradication of poverty.<br /><br />We identify incremental physical investment needs or opportunities in water, energy, and the circular economy alone of $1.5 trillion per year, while social investment areas of education, health, and hunger add up to an annual incremental opportunity of $800 billion. To be sure, these are enormous sums, but much smaller than the sums of capital looking to invest sustainably and tiny in relation to the human benefits that could be achieved. We also examine the innovative financial instruments and frameworks needed to allow that capital to flow to aid in the achievement of the goals.<br /><br />The SDGs represent the challenge of our generation but a challenge which we should embrace, as the benefits for those suffering most, as well as to the whole global community, would be immeasurable if we were to succeed. By identifying the lowest hanging fruit, the feedback loops, the critical paths, the scale of the opportunity in both human and financial terms, and who might do what, we hopefully break the sometimes daunting SDGs down into a roadmap &mdash; a framework which allows all elements of society, from policymakers, to corporates and the financial community, to set out in partnership down a pathway to a better, fairer, wealthier, more inclusive, cleaner, and more sustainable world that we can be truly proud to leave for our children.<span class="authList" style="display: none;">Authors: Jason Channell,Elizabeth Curmi, PhD.,Zoe Whitton,Tina M Fordham,</span></p>

Pathways to Success – A Systematic Framework for Aligning Investments

Although there is much in the world to be proud of, we still face enormous societal, environmental, and economic challenges. Even in this day and age, more than 2 billion people — a quarter of all humankind — lack access to even the most basic elements of life that most of us take for granted, such as clean water, sanitation, and energy, while 800 million people — more than one in ten of us — remain undernourished. At its most extreme, the picture is infinitely worse; 700 million people, again, almost one in ten of us, still live below the poverty line on less than $1.90 per day, a sum that many of us spend on a coffee without a second thought. More than 40% of children younger than age 14 (800 million) still lack access to a 'complete' education, and are denied the opportunity to reach their full potential. Beyond the obvious impact on their own lives, what benefits might almost a billion extra well-educated people bring to the world?

United Nations Sustainable Development Goals

The Citi GPS Food Security report looks at the current state of the world with relation to food insecurity and hunger. Food security is typically caused by three main factors: environmental disaster, conflict, and social, political, or economic shifts. In 2022, we find ourselves in a perfect storm of all three. While some of these factors may be alleviated in 2023, their effects will take time to work through.  We examine the potential solutions to alleviate current food insecurity and prevent or lessen the severity of future occurrences, looking at four categories: social, technological , public sector, and financial/economic solutions. 

Food Security

Download Report

Executive Summary

While we all intuitively recognize that oceans are important, the fact is we grossly underestimate how utterly critical they are to our survival as a species. Oceans, the world’s largest ecosystem, cover over 70% of the Earth’s surface, are home to 80% of all life, and produce 50% of the oxygen we breathe. While society devotes increasing time and energy to terrestrial drivers and impacts of climate change, more often than not we fail to recognize the critical part oceans play in this dynamic — absorbing 30% of the CO2 produced by humans and capturing 90% of the heat generated from those emissions. Given their extraordinary importance and our dependence on oceans, why the utter disdain? The simple fact is that around two-thirds (61%) of the oceans are outside national jurisdictions, meaning responsibility and oversight becomes an issue, and their sheer scale and depth enables an “out of sight, out of mind” attitude to prevail for many, leaving the ocean underfunded, unrecognized, and undervalued. Despite having their own UN Sustainable Development Goal (SDG 14), oceans received the least funding, and is the least-cited of all of the SDGs, with a funding gap of some $149 billion per year to the estimated required annual spend of $175 billion. However, there are reasons for optimism, albeit tentative. Recognition of and attention to the ocean crisis is growing rapidly, including the recent Kunming-Montreal Global Biodiversity framework targeting protection for 30% of the world’s oceans by 2030, the recent International Treaty on Protection of the High Seas, potential treaties on plastic pollution, and the impending introduction of the Taskforce on Nature-related Financial Disclosure, which features oceans as one of its four realms. New forms of finance such as debt for nature swaps and blue bonds, to name but two, offer enormous potential to harness vast pools of capital. New technologies offer the potential to understand the oceans in ways we never have before. New industries and economies offer enormous economic potential. And all of this before we consider the environmental benefits of building a sustainable ocean economy. Given the importance of oceans to the planet, we examined why all businesses and financial institutions should care about ocean sustainability, and how we should address the mismatch between the significance of ocean sustainability and the lack of attention and investment towards the issue.To do this, we first identify the key drivers of ocean health decline, grouped into three areas: over-exploitation and seascape change, climate change, and pollution. Importantly, we carried out a new and granular assessment of impact materiality and revenue exposure for industries. Within the universe of 48,000 public companies that were assessed, we found that $4.3 trillion dollars (11.7% of total revenue mapped) are potentially at risk based on the impact materiality mapping by ENCORE for marine ecosystem use. If we also consider indirect revenue exposure, based on impact materiality ratings for greenhouse gas (GHG) emissions and pollution stressors, $27 trillion (63% of total revenue considered) could be indirectly at risk due to potentially negative impacts on the ocean. We also completed geospatial analysis to identify potential hotspots of marine natural capital loss and finds that 67% of national waters Key Biodiversity Areas (KBAs) and 55% of high seas KBAs may be impacted by multiple economic activities and are at risk of disruption or depletion. Combined, we believe that the analysis helps to demonstrate why a broader view of the ocean economy is needed to address all the drivers of ocean health decline and, through the lens of double materiality, why ocean health matters for all marine-and land-based businesses. It also demonstrates the need for more integrated ocean management and governance that considers the need to balance multiple ocean users and stressors along with ocean conservation, which the current fragmented sectoral approach to ocean governance fails to accomplish.

<p>While we all intuitively recognize that oceans are important, the fact is we grossly underestimate how utterly critical they are to our survival as a species. Oceans, the world&rsquo;s largest ecosystem, cover over 70% of the Earth&rsquo;s surface, are home to 80% of all life, and produce 50% of the oxygen we breathe. While society devotes increasing time and energy to terrestrial drivers and impacts of climate change, more often than not we fail to recognize the critical part oceans play in this dynamic &mdash; absorbing 30% of the CO<sub>2</sub> produced by humans and capturing 90% of the heat generated from those emissions.</p>
<p>Given their extraordinary importance and our dependence on oceans, why the utter disdain? The simple fact is that around two-thirds (61%) of the oceans are outside national jurisdictions, meaning responsibility and oversight becomes an issue, and their sheer scale and depth enables an &ldquo;out of sight, out of mind&rdquo; attitude to prevail for many, leaving the ocean underfunded, unrecognized, and undervalued. Despite having their own UN Sustainable Development Goal (SDG 14), oceans received the least funding, and is the least-cited of all of the SDGs, with a funding gap of some $149 billion per year to the estimated required annual spend of $175 billion.</p>
<p>However, there are reasons for optimism, albeit tentative. Recognition of and attention to the ocean crisis is growing rapidly, including the recent Kunming-Montreal Global Biodiversity framework targeting protection for 30% of the world&rsquo;s oceans by 2030, the recent International Treaty on Protection of the High Seas, potential treaties on plastic pollution, and the impending introduction of the Taskforce on Nature-related Financial Disclosure, which features oceans as one of its four realms.</p>
<p>New forms of finance such as debt for nature swaps and blue bonds, to name but two, offer enormous potential to harness vast pools of capital. New technologies offer the potential to understand the oceans in ways we never have before. New industries and economies offer enormous economic potential. And all of this before we consider the environmental benefits of building a sustainable ocean economy.</p>
<p>Given the importance of oceans to the planet, we examined why all businesses and financial institutions should care about ocean sustainability, and how we should address the mismatch between the significance of ocean sustainability and the lack of attention and investment towards the issue.To do this, we first identify the key drivers of ocean health decline, grouped into three areas: over-exploitation and seascape change, climate change, and pollution.</p>
<p>Importantly, we carried out a new and granular assessment of impact materiality and revenue exposure for industries. Within the universe of 48,000 public companies that were assessed, we found that $4.3 trillion dollars (11.7% of total revenue mapped) are potentially at risk based on the impact materiality mapping by ENCORE for marine ecosystem use. If we also consider indirect revenue exposure, based on impact materiality ratings for greenhouse gas (GHG) emissions and pollution stressors, $27 trillion (63% of total revenue considered) could be indirectly at risk due to potentially negative impacts on the ocean.</p>
<p>We also completed geospatial analysis to identify potential hotspots of marine natural capital loss and finds that 67% of national waters Key Biodiversity Areas (KBAs) and 55% of high seas KBAs may be impacted by multiple economic activities and are at risk of disruption or depletion.</p>
<p>Combined, we believe that the analysis helps to demonstrate why a broader view of the ocean economy is needed to address all the drivers of ocean health decline and, through the lens of double materiality, why ocean health matters for all marine-and land-based businesses. It also demonstrates the need for more integrated ocean management and governance that considers the need to balance multiple ocean users and stressors along with ocean conservation, which the current fragmented sectoral approach to ocean governance fails to accomplish.</p>

Why Oceans Are Important <div>It is difficult to overstate the importance of a healthy ocean for our planet, society, and global economy.&nbsp;Covering 70% of the Earth&rsquo;s surface, oceans play a fundamental role in regulating the climate, the air we breathe, and the water we drink and use.</div> 

<div>It is difficult to overstate the importance of a healthy ocean for our planet, society, and global economy.&nbsp;Covering 70% of the Earth&rsquo;s surface, oceans play a fundamental role in regulating the climate, the air we breathe, and the water we drink and use.</div>

Why Oceans Are Important

UN Sustainable Development Goal (SDG) 14: Life Below Water <div>Despite the United Nations declaring 2021-30 as the Ocean Decade, UN SDG 14 is reported to be the least funded&nbsp;global goal. SDG 14 received 0.01% of all SDG funding from official development assistance up to 2019, less than&nbsp;2% of support from the Green Climate Fund (GCF), and only 3.3% of use of proceeds from sustainable bonds went&nbsp;to SDG 14 in 2021. Only 7% of global marine conservation funding in 2019 came from private finance.</div> 

<div>Despite the United Nations declaring 2021-30 as the Ocean Decade, UN SDG 14 is reported to be the least funded&nbsp;global goal. SDG 14 received 0.01% of all SDG funding from official development assistance up to 2019, less than&nbsp;2% of support from the Green Climate Fund (GCF), and only 3.3% of use of proceeds from sustainable bonds went&nbsp;to SDG 14 in 2021. Only 7% of global marine conservation funding in 2019 came from private finance.</div>

UN Sustainable Development Goal (SDG) 14: Life Below Water

The Key Stressors of Ocean Health <div>The key drivers of ocean health decline include include over-exploitation and seascape change, climate change, and&nbsp;pollution. Fishing has had the largest impact on marine biodiversity over the past 50 years, while climate change is&nbsp;causing ocean warming, acidification, and de-oxygenation.</div>
<div>&nbsp;</div>
<div>Pollution, particularly plastics, is widely considered to be harmful to ocean biodiversity and ecosystems. Our analysis&nbsp;finds that $4.3 trillion could be at risk due to direct impact on the marine environment and $23 trillion could be&nbsp;indirectly at risk due to indirect drivers of impact such as land-based pollution and greenhouse gas (GHG) emissions.</div> 

<div>The key drivers of ocean health decline include include over-exploitation and seascape change, climate change, and&nbsp;pollution. Fishing has had the largest impact on marine biodiversity over the past 50 years, while climate change is&nbsp;causing ocean warming, acidification, and de-oxygenation.</div>
<div>&nbsp;</div>
<div>Pollution, particularly plastics, is widely considered to be harmful to ocean biodiversity and ecosystems. Our analysis&nbsp;finds that $4.3 trillion could be at risk due to direct impact on the marine environment and $23 trillion could be&nbsp;indirectly at risk due to indirect drivers of impact such as land-based pollution and greenhouse gas (GHG) emissions.</div>

The Key Stressors of Ocean Health

Opportunities for Businesses and Financial Institutions <div>Building ocean literacy across the broader public, private, and finance communities can help break down the many siloes&nbsp;when it comes to ocean action and build innovative partnerships, and strategies to support a healthy and productive ocean.&nbsp;Non-profits and research institutions are underutilized partners in ocean action. All organizations can consider how ocean&nbsp;health can be integrated into strategies and action for climate change and biodiversity loss.</div> 

<div>Building ocean literacy across the broader public, private, and finance communities can help break down the many siloes&nbsp;when it comes to ocean action and build innovative partnerships, and strategies to support a healthy and productive ocean.&nbsp;Non-profits and research institutions are underutilized partners in ocean action. All organizations can consider how ocean&nbsp;health can be integrated into strategies and action for climate change and biodiversity loss.</div>

Opportunities for Businesses and Financial Institutions

Watch: Charting a Prosperous Blue Future from Risk to Resilience... 

While we all intuitively recognize that oceans are important, the fact is we grossly underestimate how utterly critical they are to our survival as a species. Oceans, the world’s largest ecosystem, cover over 70% of the Earth’s surface, are home to 80% of all life, and produce 50% of the oxygen we breathe. While society devotes increasing time and energy to terrestrial drivers and impacts of climate change, more often than not we fail to recognize the critical part oceans play in this dynamic — absorbing 30% of the CO2 produced by humans and capturing 90% of the heat generated from those emissions. Given their extraordinary importance and our dependence on oceans, why the utter disdain? The simple fact is that around two-thirds (61%) of the oceans are outside national jurisdictions, meaning responsibility and oversight becomes an issue, and their sheer scale and depth enables an “out of sight, out of mind” attitude to prevail for many, leaving the ocean underfunded, unrecognized, and undervalued. Despite having their own UN Sustainable Development Goal (SDG 14), oceans received the least funding, and is the least-cited of all of the SDGs, with a funding gap of some $149 billion per year to the estimated required annual spend of $175 billion. However, there are reasons for optimism, albeit tentative. Recognition of and attention to the ocean crisis is growing rapidly, including the recent Kunming-Montreal Global Biodiversity framework targeting protection for 30% of the world’s oceans by 2030, the recent International Treaty on Protection of the High Seas, potential treaties on plastic pollution, and the impending introduction of the Taskforce on Nature-related Financial Disclosure, which features oceans as one of its four realms. New forms of finance such as debt for nature swaps and blue bonds, to name but two, offer enormous potential to harness vast pools of capital. New technologies offer the potential to understand the oceans in ways we never have before. New industries and economies offer enormous economic potential. And all of this before we consider the environmental benefits of building a sustainable ocean economy. Given the importance of oceans to the planet, we examined why all businesses and financial institutions should care about ocean sustainability, and how we should address the mismatch between the significance of ocean sustainability and the lack of attention and investment towards the issue.To do this, we first identify the key drivers of ocean health decline, grouped into three areas: over-exploitation and seascape change, climate change, and pollution. Importantly, we carried out a new and granular assessment of impact materiality and revenue exposure for industries. Within the universe of 48,000 public companies that were assessed, we found that $4.3 trillion dollars (11.7% of total revenue mapped) are potentially at risk based on the impact materiality mapping by ENCORE for marine ecosystem use. If we also consider indirect revenue exposure, based on impact materiality ratings for greenhouse gas (GHG) emissions and pollution stressors, $27 trillion (63% of total revenue considered) could be indirectly at risk due to potentially negative impacts on the ocean. We also completed geospatial analysis to identify potential hotspots of marine natural capital loss and finds that 67% of national waters Key Biodiversity Areas (KBAs) and 55% of high seas KBAs may be impacted by multiple economic activities and are at risk of disruption or depletion. Combined, we believe that the analysis helps to demonstrate why a broader view of the ocean economy is needed to address all the drivers of ocean health decline and, through the lens of double materiality, why ocean health matters for all marine-and land-based businesses. It also demonstrates the need for more integrated ocean management and governance that considers the need to balance multiple ocean users and stressors along with ocean conservation, which the current fragmented sectoral approach to ocean governance fails to accomplish. Why Oceans Are Important <div>It is difficult to overstate the importance of a healthy ocean for our planet, society, and global economy.&nbsp;Covering 70% of the Earth&rsquo;s surface, oceans play a fundamental role in regulating the climate, the air we breathe, and the water we drink and use.</div>  UN Sustainable Development Goal (SDG) 14: Life Below Water <div>Despite the United Nations declaring 2021-30 as the Ocean Decade, UN SDG 14 is reported to be the least funded&nbsp;global goal. SDG 14 received 0.01% of all SDG funding from official development assistance up to 2019, less than&nbsp;2% of support from the Green Climate Fund (GCF), and only 3.3% of use of proceeds from sustainable bonds went&nbsp;to SDG 14 in 2021. Only 7% of global marine conservation funding in 2019 came from private finance.</div>  The Key Stressors of Ocean Health <div>The key drivers of ocean health decline include include over-exploitation and seascape change, climate change, and&nbsp;pollution. Fishing has had the largest impact on marine biodiversity over the past 50 years, while climate change is&nbsp;causing ocean warming, acidification, and de-oxygenation.</div>
<div>&nbsp;</div>
<div>Pollution, particularly plastics, is widely considered to be harmful to ocean biodiversity and ecosystems. Our analysis&nbsp;finds that $4.3 trillion could be at risk due to direct impact on the marine environment and $23 trillion could be&nbsp;indirectly at risk due to indirect drivers of impact such as land-based pollution and greenhouse gas (GHG) emissions.</div>  Opportunities for Businesses and Financial Institutions <div>Building ocean literacy across the broader public, private, and finance communities can help break down the many siloes&nbsp;when it comes to ocean action and build innovative partnerships, and strategies to support a healthy and productive ocean.&nbsp;Non-profits and research institutions are underutilized partners in ocean action. All organizations can consider how ocean&nbsp;health can be integrated into strategies and action for climate change and biodiversity loss.</div>  Watch: Charting a Prosperous Blue Future from Risk to Resilience... 

Combined, we believe that the analysis helps to demonstrate why a broader view of the ocean economy is needed to address all the drivers of ocean health decline and, through the lens of double materiality, why ocean health matters for all marine-and land-based businesses. It also demonstrates the need for more integrated ocean management and governance that considers the need to balance multiple ocean users and stressors along with ocean conservation, which the current fragmented sectoral approach to ocean governance fails to accomplish.

Charting a Prosperous Blue Future from Risk to Resilience

Healthy oceans are important for our planet, society, and the global economy. As such, ocean sustainability requires increased attention and action from businesses and financial institutions and a more integrated approach across climate change, biodiversity and ocean health. Almost all industries contribute to ocean health decline through stressors including climate change, pollution, and land/sea use change and direct exploitation. The report serves as a primer on the business case for ocean action and engagement. 

Sustainable Ocean Economy

For the launch of this series, Suzanne Ferlic Johnson, Senior Advisor to UN Global Compact joins Ying Qin, Global Thematic Analyst at Citi Global Insights, to discuss the importance of ocean sustainability and ocean-related risks and opportunities for business and finance.