The ORRAA News – Q3 2022

11 October 2022

Dear ORRAA members and friends, 

In August, Super Typhoon Hinnamanor hit the Philippines, South Korea and Japan, with winds reaching in excess of 300kmh, and associated storm surge and flooding impacts. In late September, Hurricane Ian devastated parts of Florida in the U.S, with costs estimated to be in excess of $100 billion, of which less than half was insured. As the impacts of climate change intensify, we have to re-double our efforts to build coastal resilience and reduce ocean risk. And we stand ready to do so.

ORRAA is growing and gaining momentum. Since our July bulletin, we’re excited to welcome new ORRAA members: Clyde & Co LLP; Earth Security; Mari Oceans; SeaGreen and Whale Seeker. They are hugely welcome as we are stronger and have more impact together.

As part of our growth, we are recruiting for a policy and advocacy lead. For full details please click this link.  Please do pass on the details to anyone you think might be interested in this vital role.

September saw the launch of the Vessel Viewer pilot to provide insurers with data to help tackle global illegal, unreported and unregulated (IUU) fishing. This is led in conjunction with our partners and friends at Global Fishing Watch and TMT. It was launched at the International Union of Marine Insurance conference in Chicago on the 20 September and looks to set to bring real accountability to the maritime insurance industry.

We’re also excited to have just announced the five Ocean Resilience Innovation Challenge (ORIC) projects that will be further supported to develop their programmes of work.

We are currently getting ready for COP27, (6 – 18 November) in Sharm el Sheikh, Egypt. Please do let us know your plans and if you would like to meet with the ORRAA team that will be on the ground.

This edition of ORRAA News covers some of the highlights from the last quarter – including an update on our Call for Proposals – as we work towards our mission to drive more investment into coastal resilience and the Ocean.

Read on to find out more!

As always, if you have any questions or would like to set up a call to catch up with the team, please do let us know.

Karen & the ORRAA team

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Highlights of the last quarter

1. Outreach and Engagement

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• Caribbean Climate-Smart Accelerator Investor Forum on Blue Economy, 6 September: Karen Sack, ORRAA’s Executive director spoke at the Caribbean Climate-Smart Accelerator Investor Forum, where she discussed the topic of Conservation and Restoration Finance to promote impact investing for blue economy projects and encourage new financial initiatives to address climate challenges

• International Union of Marine Insurance (IUMI) Conference, 18 – 21 September, in Chicago, USA: ORRAA’s Lindsay Getschel presented the new ‘Vessel Viewer’ tool to insurers. See below for a deeper dive into this innovative tool to help end Illegal, Unreported and Unregulated (IUU) fishing  

• New York Climate Week, 19 – 23 September, WTW event with ORRAA, Climate Quantified: Parametrics – From Coral Reefs to Credit Risk: Nature-Related Risks and the Protective Role of Parametric Insurance. The event focused on how insurance enhances the role that each actor plays (from policymaker to financier to service provider) to deploy tools and techniques that can unlock and protect the value of natural capital and associated ecosystem services. It showcased successful projects that demonstrate the added value that the insurance industry can contribute to design innovative yet practical solutions and help create a more resilient planet

• Capital Monitor panel “Spotlight on SDG14: Adjusting Investment Policies to Preserve Life in our Ocean”, 21 September. Karen Sack spoke on a panel with DWS and WWF to approximately 200 participants from the investment sector, discussing what the sustainable blue economy investment opportunity is and how the Ocean can be an ally in mitigating climate change

• Deutsche Bank International Private Bank ORRAA Ocean Conference, private event, 26 – 28 September, in Port de Sóller, Mallorca. Together, Deutsche Bank’s International Private Bank and ORRAA convened clients from the Bank to explore investable opportunities towards a sustainable and equitable blue economy

• Insurance and Risk Finance Facility, report launch, “Insuring nature to reduce risks” – Risk-transfer solutions for coral reefs, 5 October, Geneva, Switzerland.  The event highlighted how to protect reefs in the future, for example by bundling insurance with nature financing for de-risking, using parametric insurance, and creating an integrated risk index.  Please watch the panel discussion here.  You can also download the report here

• OECD Forum on Green Finance and Investment, 5 – 7 October, online event.  This event convened, as it does every year, leading actors across the green finance community to help catalyse and support the transition to a green, low-emissions and climate-resilient global economy

• KFW Development Finance Forum 2022 – Two Crises, One Solution – climate and biodiversity, 6 – 7 October, Frankfurt. Karen Sack spoke on a panel about financing artisanal fisheries management as a climate solution

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Deutsche Bank International Private Bank x Ocean Risk and Resilience Action Alliance Ocean Conference, 26 – 28 September, in Port de Sóller, Mallorca

ORRAA was thrilled to co-host this inaugural event.

The gathering aimed to build an investment community to support the sustainable blue economy, starting with Deutsche Bank’s International Private Bank’s clients.

ORRAA Executive Director Karen Sack said: “This conference was a really important stepping stone in terms of further developing the investment community for the Ocean. It is more important than ever that we bring together the smart thinking of investors, entrepreneurs and scientists and use this to catalyse action and investment into ocean resilience.”

In June, Deutsche Bank pledged its support to the development of ORRAA’s Sea Change Impact Financing Facility (SCIFF), which aims to drive at least USD$ 1 billion of investment into coastal and ocean ecosystems by 2030.

The conference brought together ocean experts, academics, NGOs, investors and ocean impact start-ups to accelerate investment into a sustainable blue economy and nature-based solutions that benefit the ocean ecosystem. Ocean impact start-ups attending the conference included EcoSubsea, Ocean Bottle, Matter, Avant Meats, Biofeyn, Coral Vita, ECOncrete and Bound4Blue.

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2. Financial Innovation

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Call for Proposals update

In Lisbon, at the UN Ocean Conference, on 27 June 2022, ORRAA and the Government of Canada launched a global search for the next generation of projects which will build resilience in coastal communities and the Ocean with a particular focus on projects in the Global South. The deadline for applications closed on 31 August 2022.

ORRAA received over 80 applications – a truly excellent response. The team is now busy reviewing and assessing each application in detail.

Successful applicants will receive between USD$5,000 to USD$400k over the next three years to deliver projects focused on finance / insurance innovations that build coastal and ocean resilience.

Keep a lookout for announcements on the final selected projects before the end of this year.

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Project Showcase – a glimpse at some of the innovations driving change

The Stimson Center’s Climate and Ocean Risk Vulnerability Index CORVI is a decision support tool designed to help leaders make smart climate investments to improve the safety and security of coastal citizens using 96 economic, environmental, social, and political indicators. Coastal cities are vital to the economic security and wellbeing of billions. The climate crisis poses an existential threat. Lives, infrastructure, trade, blue economies and the natural world are at risk. Currently operating in eleven coastal cities around the world, CORVI organises data and information across the land and seascape to provide decision makers with the complete risk picture they need to act.

With ORRAA’s support (from the Blue Planet Fund and ORRAA core funds), the Stimson Center and the Commonwealth Secretariat developed and piloted a Rapid Assessment (RA) protocol for Kiribati, Barbados and Sri Lanka. These new coastal city climate risk assessments were released last month as part of ongoing efforts to help understand the threat posed by climate change and identify opportunities to increase resilience. Three quick take-homes from the reports show that:

• The southwestern urban corridor of Barbados faces significant vulnerabilities from flooding, heatwaves, coastal erosion, and other climate and ocean risks
• Sri Lanka’s Western Province faces significant vulnerabilities from flooding, urbanisation, and economic instability
• Kiribati’s island of Tarawa faces significant vulnerabilities from coastal flooding, shortcomings in solid waste and sewage management, and marine ecosystem degradation

Find the full reports and read more here.

Coastal Risk Index Update

Working with AXA XL, ORRAA has recently upgraded coastal flood data on the Coastal Risk Index (CRI) website.

The CRI is an innovative, interactive web-based tool that allows users to assess coastal flood hazard and quantify the potential risk reduction benefits of marine ecosystems for coastal communities, national, regional and city planners, investors, risk managers, insurers and more. The next set of data will overlay a sub-national data assessment of social vulnerability, combined with global population distribution data; showing where vulnerable people are most exposed to flood risk and where coastal ecosystems provide the greatest flood risk reduction benefits. It enables the design of nature-based risk mitigation solutions and the targeting of risk transfer products.

To explore the updated web interface and learn about ocean risk in your area, visit the CRI here.

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Vessel Viewer: Insuring Against IUU Fishing

At the International Union of Marine Insurance (IUMI) conference in Chicago (18 to 21 September 2022), an innovative new tech tool was launched to tackle Illegal, unreported and unregulated (IUU) fishing through the engagement of the insurance sector. IUU fishing undercuts effective fisheries management, harms ocean ecosystems and undermines food security. It is also associated with human rights abuses, slave labour and human trafficking.

The initiative has brought together global expertise in insurance, marine ecology and technology under the ORRAA banner.  This group of key stakeholders has developed a new tool which harnesses data to enable insurers to quickly assess whether vessels may have engaged in IUU fishing. Cutting off access to insurance makes it more costly for IUU vessels to operate and disincentivises operators from engaging in this illicit activity. It can also help insurers avoid costly claims and exposure to potential legal and reputational liabilities, making the business case for this initiative clear.

More than 16 global insurers have now committed to joining the pilot testing. The first fixed premium protection and indemnity facilities to join are Norwegian based Hydor AS, and Gard (key players in the marine insurance market).

The Financial Times covered the release of the tool, an indication of interest in “closing the net” on IUU fishing.

Vessel Viewer, is a collaboration between Global Fishing Watch and TM-Tracking who are developing the tool, in partnership with ORRAA, ocean conservation group Oceana.

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Final five projects to be supported by Ocean Resilience Innovation Challenge (ORIC 2) announced

• These projects are building resilience in coastal communities vulnerable to climate change, reducing ocean risk through financial innovation
• Incubator support provided to the companies spanning Africa, eastern India, Mexico, Peru and the Maldives
• Challenge backed by the UK’s Blue Planet Fund and Swiss Re Foundation

On Monday 3 October we announced the final five Ocean Resilience Innovation Challenge (ORIC) projects to be supported.

The final five projects are:

1) Abalobi, South Africa – A social enterprise seeking to develop thriving small-scale fishing communities in Africa and beyond. Through its technology, Abalobi can connect small-scale fishers directly with consumers ensuring a fair, transparent income for the fisher, and fully traceable “Fish With A Story” for the consumer. They are based in South Africa, but their projects are located across Africa. The envisaged financial product will allow fishers to save towards pre-defined targets, such as repairing or replacing fishing equipment. They can contribute as much or as little as they like and at various times. Fishers will be able to elect to divert a portion of their income into a savings account through the Abalobi Fisher app. http://abalobi.org/

2) Aqua-Farms Organization (AFO) / Sea PoWer, Tanzania – Aqua-Farms Organization (AFO) is a youth-led, non-governmental organization (NGO) based in Tanzania. Founded in 2017, AFO aims to create resilient coastal communities by supporting sustainable use of ocean resources. Sea PoWer promotes women seaweed farmers’ empowerment by building their capacity to adopt tubular nets, (a deep-water seaweed farming innovation resilient to climate change and improving women’s work conditions), learn new skills, add value to their crops and grow both economically and personally. Through the ORIC 2 grant, ORRAA is supporting the Sustainable Blue Shop in, Zanzibar, through Aqua-Farms Organization and Sea PoWer to scale deep-water tubular net seaweed farming technology through microcredit and saving schemes. The initiative will also train women on financial literacy and how to produce seaweed value added products soap, shampoo and lotions and food (juice, jam, seaweed sticks, salads, cakes and noodles) from seaweed. https://afo.or.tz/

3) INVERSA Leathers, Mexico – INVERSA Leathers makes the world’s first ecosystem and community reviving leather. Made from the invasive lionfish, which destroy coral reefs across the Atlantic, INVERSA’s materials help fashion to heal the planet, by solving an environmental crisis.  INVERSA Leathers is based in Florida, USA, and their project will build well-equipped fishing cooperatives in Quintana Roo, Mexico, through underwriting fishers’ risk with a 100 per cent catch-to-cash guarantee, financing the upfront re-tooling expenses for fishers to hunt and catch lionfish and offering premium incentives and prompt payment timelines. www.inversaleathers.com

4) SatSense Solutions, India – A start-up that uses satellite remote sensing and geospatial analytics to address the challenges of sustainable development and climate change. Its project de-risks sustainable tourism and supports the economic development of the Sundarbans region in eastern India. As an example, insurance products can be offered exclusively (or at a lower premium) to properties that have reduced risk, such as those with mangrove cover or similar natural barriers in place. The Sundarbans is an area of extreme poverty that is climate vulnerable.  Sustainable economic development in this region could lift tens of thousands of people out of extreme poverty, while also ensuring the natural capital is conserved. https://satsense.co/

5) Save The Waves Coalition, California – An international non-profit dedicated to protecting surf ecosystems across the globe through a unique combination of protected area creation, stewardship and grassroots mobilisation. Save The Waves will work with local surfing communities and economies – particularly in Mexico, Peru, and the Maldives – to incentivise the protection and conservation of surf ecosystems, while creating an innovative insurance model. This insurance model would financially sustain communities for loss of revenue due to coastal development or climate disaster that affects the ecosystem and its ability to produce surf breaks.  https://www.savethewaves.org/

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3. Policy and Governance

The COPs are nearly upon us. With NY Climate Week in the rear-view mirror, it is full speed ahead towards the UNFCCC COP 27 in Sharm El Sheikh, Egypt, where the focus will be on implementation, finance and adaptation. Discussions on debt and loss and damage will be high on the agenda. Hot on its heels is the Convention on Biodiversity’s COP 15 in Montreal, Canada – originally scheduled for 2020 in China. The CBD COP is where a decision will be taken as to whether to protect 30 per cent of the world’s land and sea by 2030; and there will be a focus on how to finance this commitment. Find out more about the global campaign for nature here.

Speaking of big international policy fora, ORRAA is hiring a policy and advocacy lead to help shape and deliver our strategy. You are the best network we have, so if interested, please take a look, share or apply!

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Timeline

Key upcoming events include (not least the COPs of course!):  

• Sustainable Ocean Summit and Blue Finance Summit, 17 – 18 October, in Barcelona, Spain
• Second Climate Observation Conference, 17 – 19 October, in Darmstadt, Germany
• ORRAA Solution Lab, 20 October, with ORRAA member the University of California Santa Barbara’s Environmental Markets Lab (emLab) re developing fisheries parametric insurance playbook, virtual event
• UN Framework Convention on Climate Change Conference (COP 27), 6 – 18 November, in Sharm el-Sheikh, Egypt
• G20 Leaders’ Summit, 15 – 16 November, in Bali, Indonesia
• UN Biodiversity Conference, (COP 15), 7 – 19 December 2022, Montreal, Canada