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A World Ocean Fund For Responsible Investment

Source: World Ocean Radio/Peter Neill - March 8, 2018 in Radio

A World Ocean Fund For Responsible Investment
Photo: Jamie Morrison/Unsplash

Early in 2018, BlackRock asset management chair Larry Fink issued a statement declaring growing public demand for companies to serve a social purpose. He asserted that, increasingly, both public and private companies must be able to explain their social and environmental impacts and be able to demonstrate leadership to drive prosperity and security–not just for their own investment returns–but for all. In this episode of World Ocean Radio, host Peter Neill hails this paradigm shift suggested by Mr. Fink and proposes a World Ocean Fund for investment-based forward-looking technologies, sustainability and responsibility in markets to shape the 21st century and beyond.

Transcript:

Welcome to World Ocean Radio…

I’m Peter Neill, Director of the World Ocean Observatory.

One of the most powerful and hypnotic things about the ocean is the relentless succession of wave after wave, originated from some faraway place, stimulated by earth tremors, currents and tides, as a repetitive reminder of things powerful and changing beyond our control. We may not ever fully understand the ocean, but we are fully vested in its force and foment.

Now please forgive me an unexpected metaphoric shift from a natural phenomenon to an economic one – the vicissitudes of the equally diverse investment conditions and capital markets by equally changing, often inexplicable sources and conditions difficult to anticipate, much less harness as a power than affects us all, whether or not we are investors.

The power of one does, however, relate to the other. As the ocean is the prevalent scape for human connection, it facilitate the markets through trade, transport, resource harvest, resource extraction, energy production, climate impacts on global agriculture, communications, and destructive storms—all of which can devastate the stability of capital exchange and determine the rise and fall of workers, corporations, nation states, and international relations. It is not so far-fetched to suggest the ocean and global financial conditions are integrated perhaps beyond even the ways we understand.

In January, Larry Fink, the Chairman and CEO of BlackRock, a $6.3 trillion asset manager issued the following statement: “Society is demanding that companies, both private and public, serve a social purpose.” Fink insisted that they must be able to describe their strategy for long-term growth, preparation for changing conditions, review by directors, communication with shareholders that “reveal understanding of the societal impacts of your business as well as the ways that broad, structural trends—from slow wage growth to rising automation to climate change—affect your potential for growth.” He continued, “Today, our clients, who are your company owners, are asking you to demonstrate the leadership and clarity that will drive not only their own investment returns, but also the prosperity and security of their fellow citizens.”

This is an astonishing statement, coming from one the world’s most influential asset managers and indicating that his company’s investment strategies and recommendations will focus on those companies who meet the challenge, and on those who do not. A cynic might suggest that Mr. Fink is engaged in a clever, timely marketing ploy, but I doubt that very much. My conclusion is that as someone with an almost cosmic overview of the world economy, he sees beyond the predictability of investment assumptions to see the storm forming beyond the horizon that demands preparedness and response.

My point here is that this statement requires notice and change within companies with concretized organization and purpose that has brought serious consequence on our planet in the form of pollution of air, land, and sea, resource appropriation and exhaustion, uncertainty and volatility in production and exchange, and debilitating, perhaps irredeemable damage on communities at home and abroad, distribution of wealth, health and social justice. Add to that the financial cost of adapting and mitigating the destruction and you have a global balance sheet in critical deficit.

There is much similar talk these days of social impact and responsible investing. There are a growing number of investment options that abandon the vertical strategy of single stock ownership in favor of mutual funds for all sectors and investment returns, funds that spread risk, apply certain standards to shape the portfolio, and include multiple companies usually in a single sector: energy, health, financial services, etc.

But what if we created an investment fund based on the reality of the ocean—a broad, inclusive, cross-sectorial horizontal fund that includes progressive companies engaged in inventive, forward-looking technologies and their applications that would spread the investment globally to all areas of enterprise, companies meeting and exceeding the BlackRock challenge? How that might emulate the dynamic return of the ocean; how that might integrate sustainability and responsibility in the markets; how that might foment and shape change in the 21st century!

You heard it here first. The World Ocean Observatory announces the first World Ocean Fund. Prescient individuals are lining up. Mr. Fink, call me.

We will discuss these issues and more in future editions of World Ocean Radio.

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World Ocean Radio is brought to you in collaboration with the World Ocean Observatory. The World Ocean Observatory advocates for the ocean through independent, responsible, apolitical science, and is dedicated to advancing public understanding of ocean issues through institutional collaboration and partnerships, pro-active programs, and connection with individual subscribers around the world.

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