To fix the climate, these 10 investors are betting the house on the ocean

Climate change is a problem Important and urgent enough that investors are starting to seize the opportunities that arise when trying to solve it. Now, they are starting to expand their nets for other nearby opportunities.

Technology that preserves the oceans while using them to replace older and more harmful means of generating energy and food appears to be one such opportunity. In fact, when we asked 10 investors in the sector to share their thoughts on space, we quickly learned that ocean conservation tech startups are seeing increased interest from niche investors now that climate change is heating up and people are seeking more ways to mitigate it. excitement.

Climate change has been more focused on terrestrial operations. It’s now “warming up” to preserve the ocean, Daniela Fernandez, managing partner of Seabird Ventures, told TechCrunch.

The world’s oceans and climate have always been closely linked. Winds generate ocean currents, which in turn influence weather patterns over open water and deep within the continents.

“Our planet is made up of 70% of the oceans, so the urgency of confronting and resolving climate change can only be properly addressed if we include the ocean in the equation,” said Rita Souza, partner at Faber Ventures.

The open ocean also contains huge amounts of energy. Previously, accessing it meant drilling into the ocean floor to tap hard-to-reach oil and gas deposits. But today, that increasingly means harnessing the enormous power that the ocean’s winds and waves represent. Offshore wind alone has the potential to meet global electricity demand by 2040, according to the International Energy Agency, which is far more than total offshore oil and gas production today.

Stefan Wellhauer, managing director of clean energy at S2G Ventures, emphasized the viability of technologies such as offshore wind as commercial alternatives to fossil fuels: “Offshore wind has established supply chains around the world. Today it is possible to manufacture, install and operate gigawatts of offshore wind power using well-established technology and equipment. And it has years of operational data to help us understand its performance. Offshore wind is the only ocean-based renewable technology that meets these criteria today.”

The oceans are constantly exchanging gases with the atmosphere and, more importantly, take in and store about 30% of all carbon dioxide pollution. The ocean’s ability as a carbon sink has created problems for countless marine life, which relied on historically stable acidity levels and are now creeping up to higher levels. However, this very ability also creates opportunities to run key nutrient cycles and capture humanity’s excess emissions.

“A healthy ocean will continue to provide critical opportunities for carbon sequestration,” said Peter Bryant, program manager (oceans) at the Builders Initiative. There are a number of opportunities to increase the ocean’s capacity to store carbon. We have biological approaches that include ecosystem restoration, seaweed cultivation, and iron fertilization; chemical solutions where minerals are used to lock dissolved carbon dioxide into bicarbonate; and electromagnetic methods that store carbon by running electric currents through seawater.”

Founders and investors have a growing appreciation for the ocean’s potential as a renewable energy resource and its ability to fend off and even solve some climate problems. “We’re confident in the ocean’s resilience here. It’s simply one of the best resources we have in the fight against climate, and that means opportunity,” said Reese Pacheco, partner at Propeller. “We’re not going to meet our climate goals without the ocean. That’s a point.”

Christian Lim, managing director at SWEN Capital Partners, agreed: “It has taken a long time, but the ocean is finally being recognized as an important part of our fight against climate change.”

We spoke with:

  • Daniela V. Fernandez, Founder and CEO of Sustainable Ocean Alliance and Managing Partner at Seabird Ventures
  • Tim Agnew, General Partner, Bold Ocean Ventures
  • Peter Bryant, Program Director (Oceans), Builders Initiative
  • Kate Danaher, Managing Director (Oceans & Seafood), S2G Ventures
  • Frances O’Sullivan, Managing Director (Oceans & Seafood), S2G Ventures
  • Stefan Wellhauer, Managing Director (Clean Energy), S2G Ventures
  • Sanjeev Krishnan, Senior Managing Director and Chief Investment Officer, S2G Ventures
  • Rita Souza, Partner, Faber Ventures
  • Christian Lim, Managing Director, SWEN Blue Ocean Partners
  • Reese Pacheco, Partner, Propeller

Daniela V. Fernandez, Founder and CEO, Sustainable Ocean Alliance (Seabird Ventures)

Climate change is the elephant in the room. Did the rising profile of the case suck the air out of the room or did it draw attention to the preservation of the perimeter that would otherwise not be there? How have things changed in the past five years?

Climate change has been a topic for decades. It was “good to have” about a decade ago: “If you had extra money to do a climate risk assessment, we’d allocate it to climate change.”

Now, it’s more of a “must have”. If we don’t tackle climate change, we will see more extreme weather events. Over the past five years, we’ve seen more focus on ocean conservation, but there is still a $149 billion annual funding gap for the oceans. Climate change used to be more focused on terrestrial processes. It is now “warming” to preserve the oceans.

We are just now beginning to see a clear shift in tone. It used to be thought that “the ocean is a victim of climate change,” but now the idea is that “the ocean can become a climate champion” and play a huge role in reducing our carbon footprint. However, this transformation is still in its infancy. In particular, the philanthropic community is just beginning to recognize that there is an urgent need to support efforts to develop ocean-based climate solutions.

To date, most climate funders have focused on terrestrial or atmospheric issues, and ocean funders have focused on important, but only tangentially, climate-related ocean issues such as ending unsustainable fishing practices and creating marine protected areas. The ocean is already the largest carbon sink on the planet, and we need a better understanding of what absorbing all that carbon does to ocean ecosystems, and how much it can contribute without disturbing its other vital functions in the ecosystem.

It is also encouraging to see governments taking action to truly prioritize and create financial incentives to invest in climate/ocean innovations, such as the bipartisan infrastructure bill passed in the US in 2022. There is also a surge in talent that recognizes that work is a “typical” job. It’s no longer an option if we don’t have a livable planet in the next seven years.We’re seeing society reset its priorities and climate is one of the highest priorities right now.

Climate change has been called “recession-proof” because governments and investors have come to understand the scope, scale and urgency of the problem. Do you think this also applies to ocean conservation technology?

Yes. Climate change and ocean restoration are closely linked. The ocean is humanity’s greatest protection against climate change, producing more than half of the air we breathe and absorbing 93% of the excess heat from global warming.

Ocean technology companies, climate change companies, and investors have the same goal. The urgency of the climate crisis has meant that passionate financiers and entrepreneurs remain engaged in developing solutions, regardless of the state of the economy.

Climate change has affected the oceans in a big way, causing everything from warmer water temperatures to more acidification. How do you deal with the issue of climate change in your investments?

Seabird Ventures internally tracks the impact and reports on social and/or environmental factors in our investments. We have externally reported the following major ocean impact areas:

  • Remove or avoid blue carbon and carbon dioxide: Initiatives in this category are critical to 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 the carbon dioxide emissions reduced or sequestered as a result of this solution.
  • Waste reduction and circular use: We focus on companies that reduce the amount of solid waste and plastic polluting our surroundings. Two common methods used to prevent plastics from entering waterways are plastic cleaning solutions. Plastic pollutants are responsible for suffocating marine life and destroying marine and coastal ecosystems. Impact in this category is tracked by measuring the mass of plastic that is reduced, avoided, or recycled. Companies offering fully biodegradable plastic alternatives are also being considered in this area for their potential to replace the use of conventional plastics.

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