How nature is more than a carbon sink

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Anderson Tanoto, Managing Director, RGE

• Ocean industry practices are under scrutiny due to advances in surveillance technology.
• The industry has a responsibility to be more transparent about how their activities affect the health of the ocean.
• With collaborative action and data sharing the industry has an opportunity to build a sustainable blue economy.

For centuries, many ocean industries have operated far from land – out of sight and often out of mind. High resolution satellite imagery, drones, tracking systems, and a global push for accountability are starting to pull back the curtain on industrial ocean practices.

While ocean industries do not have much control over surveillance technologies, they can participate directly in the movement towards more transparency by taking an active role in data sharing. Doing so not only increases operational accountability, but will increase public trust, profitability, and even operating efficiency and sustainability.

Why be transparent?

Human wellbeing and the global economy depend on the sustainable use of the ocean. To ensure such utilisation, it is necessary that the companies engaged in ocean based economic activities do so with transparency in its operations to both owners, customers, and society as a whole. The demand for this transparency comes from four directions:

1. Push from owners and finance

The top-down push from owners and finance. They require direct insight into sustainable ocean operations to reduce their financial risk, and to comply with both investment policy and their own environmental profiles. Continuous access to information will make it easier for owners to exercise responsible ownership.

We already see examples of owners and financing institutions that are starting to demand this. For example, Norges Bank Investment Management (NBIM) who, as an owner, has expressed clear expectations towards the companies in which they have invested to share both sustainability strategies and the effect of their operations on the oceans. Another example is the “Poseidon Principles” that several banks involved in ship financing have agreed to follow, creating a framework for integrating climate considerations into lending decisions to promote international shipping’s decarbonization.

2. Push from customers

The bottom-up push from customers. The customers’ own operational and market risks tie closely to how they source their products and services and hence to their environmental profile and future earnings. An example of this will be demonstrated by the Vanora – C4IR Ocean cargo chartering solution, where a charterer will be able to compare the vessel efficiency and CO2 emission estimates from various vessel and route options, and thus directly address the environmental impact of the operations.

Data sharing thus directly enables market forces to come into play to drive change. In this light we can draw parallels to John Maynard Keynes’ concept of user cost. Originally, Keynes saw this as the situation where entrepreneurs sacrifice future profits by using capital equipment today. In our case, customers instead recognize ocean resources as the capital equipment, and where the opportunity costs relate to sacrificing future profits by unsustainably depleting the ocean today.

3. Push through competition

The lateral push from competition. A typical argument against operational transparency is that the sharing of information provides valuable data to the competition and hence is of detriment to business. This, however, is a short-sighted argument in that ultimately operational transparency will be a commercial asset that customers will demand.

The ocean industry increasingly competes on green operations, customer trust, and non-financial costs. Companies should therefore use data sharing to their competitive advantage. The very fact a company is transparent will drive change and increase efficiency. If a captain or operator knows that he or she is monitored and evaluated there is automatically an incentive to improve. No one wants to end up at the bottom end of a list, whether ranked against colleagues within the company or benchmarked across the industry. Rather, the positive consequences of making the right choices will indirectly increase market share and thus financial gain for the company and its owners.

4. Pull from society and authorities

The lateral pull from society and authorities. We are currently at the stage where ocean sustainability policy has been created and implemented, for example in the IMO Sulphur Cap, the Ballast Water Management Convention BWM, and the EU Common Fisheries Policy, but where the adherence and reporting to said policies are the responsibilities of the involved companies themselves.

By openly sharing data and being transparent about their operations, the industry will, to a greater extent, be able to truly adapt to policy, see a larger degree of self-regulation, and also open up for better interaction and higher trust between industry and society

What’s the World Economic Forum doing about the ocean?

Our ocean covers 70% of the world’s surface and accounts for 80% of the planet’s biodiversity. We can’t have a healthy future without a healthy ocean – but it’s more vulnerable than ever because of climate change and pollution.

Tackling the grave threats to our ocean means working with leaders across sectors, from business to government to academia.

The World Economic Forum, in collaboration with the World Resources Institute, convenes the Friends of Ocean Action, a coalition of leaders working together to protect the seas. From a programme with the Indonesian government to cut plastic waste entering the sea to a global plan to track illegal fishing, the Friends are pushing for new solutions.

Climate change is an inextricable part of the threat to our oceans, with rising temperatures and acidification disrupting fragile ecosystems. The Forum runs a number of initiatives to support the shift to a low-carbon economy, including hosting the Alliance of CEO Climate Leaders, who have cut emissions in their companies by 9%.

Is your organization interested in working with the World Economic Forum? Find out more here.

Sharing ocean data is the key to transparency

To ensure both sustainable and correct reporting are linked to the actual conditions of the economic activity, reporting should be as quantitative and standardized as possible, based on recognized metrics, tools, and policies. Access to such quantified data on ocean use and impact is central to a larger movement known as thedemocratization of data.

Companies’ management, owners, authorities, and society in general should be able to receive regular (ideally daily) updates on how operations are conducted. All data that can provide information on the extent to which economic activities affect the ocean should in principle be made available for use in reporting. Only then will one be able to understand the actual effect on the sea from individual companies, both by examining the data directly and by also enabling broader scientific research and deeper understanding of the operational effect that companies have on ocean health.

To achieve a transparent and sustainable blue economy, we need to:

• Develop tools, policies, and legal frameworks to standardize data sharing for ocean industries.
• Link this data with other relevant ocean data for deeper insight and understanding of impact.
• Develop automated reporting tools that permit the collection and analysis of this operational data in a concise and consistent way enabling owners, customers, and society to influence a sustainable exploitation of the ocean.

The C4IR Ocean is taking an active role in all of these three actions, and we hereby invite the ocean community to join us as partners for working towards ocean sustainability. We are building the Ocean Data Platform as an open platform to share, visualize, and use ocean data. We are also together with Microsoft leading the Ocean Data Action Coalition of the High Level Panel for a Sustainable Ocean Economy and developing legal guidelines for how to share ocean data with our partner BAHR.

Though we all rely on the ocean we cannot drive change in an information vacuum.