Tag: Impact Investing

Above: 2022 Ocean Exchange Winners with Solutions for CO2 and Fisheries Protection: Ocean/Climate Nexus. L-to-R, André Mão de Ferro of C2C-NewCap, Diana Orembe of NovFeed and Jon Asin of BeePlanet Factory

Oceans have continuously regulated our climate in ways beyond our control, from absorbing and storing large amounts of heat that impact weather patterns and water circulation to mitigating dynamic aspects of climate change through various channels. This intersects and impacts our ocean’s ecosystem.

Ocean Exchange, a non-profit organization that accelerates innovation for the blue economy, has continuously supported startups that have direct interests and impacts on our ocean’s ecosystem. Ocean Exchange provides support by re-distributing corporate and family philanthropy to vetted startups via a competitive process. Additionally, Ocean Exchange provides help with network introductions to partners and investors who can help advance the adoption of innovative ocean/climate solutions. Examples of startups that were part of the Ocean Exchange competition include Water Warriors, Ebb Carbon, Ocean Rescue Alliance International (ORAI), Element Resources, Twelve, Coral Vita, and 340 others over its 12-year history. The startups have dedicated themselves to mitigating the impacts of climate change in our oceans by harnessing their solutions directed toward unique focuses. CO2 sequestration, coastal resiliency, emissions reduction, and water management are four of these focuses that have been shown to have a strong connection to oceans and climate.

These approaches are essential in addressing ocean-related climate challenges because they collectively reduce carbon emissions, enhance coastal resilience against sea-level rise, and ensure access to clean freshwater resources. Not only are they imperative for mitigating the impacts of climate change in marine ecosystems and coastal communities, but they also help preserve the delicate equilibrium by addressing the associated challenges. When it comes to oceans and climate, some of the major challenges we are faced with include sea-level rise, extreme weather events, disruption of both human and marine ecosystems, ocean acidification, and more. We will now delve deeper into each of the ocean-climate intersections through the lens of innovative startup companies.

Each of these focuses contributes to the overall mitigation of climate change in our oceans. Organizations with a focus on CO2 sequestration emphasize the ocean’s pivotal role in reducing greenhouse gas emissions created via human activities by absorbing and storing CO2 from the atmosphere. The ocean’s efforts to reduce carbon dioxide emissions help balance global temperature rises, thus, reducing the risk of sea-level rise and unusual weather patterns around coastal regions and marine environments. Organizations like Ebb Carbon, a startup that has pioneered an ocean-based carbon dioxide removal strategy by exploiting the ocean’s natural ability to safely store CO2, is just one example of emerging solutions aimed at mitigating climate change. Ebb Carbon recently completed a Round A of venture capital of $20 million. Similarly, the carbon transformation company known as Twelve engineered a unique way to recycle captured carbon through its proprietary CO2Made® carbon transformation technology. Twelve raised $187 million in its A and B Rounds of venture capital, has significant industrial partnerships, and recently broke ground on its first commercial-scale production facility for aviation fuel. In Ocean Exchange’s eleven completed years, eleven finalists have pitched to our group of investors and subject matter experts about CO2 sequestration. Finalists have presented sequestration solutions based on various types of chemistry, including electrochemistry, and natural solutions like kelp and algae.

Coastal resiliency practices around the globe help reduce the impacts of a changing climate by encouraging the creation of protective coastal infrastructures, natural buffers, and other sustainable safeguarding measures along coastlines. ORAI’s focus on coastal resiliency is apparent from the startup’s 1000 Mermaids Artificial Reef Project initiative, an initiative that seeks to enhance marine resiliency and habitats while providing other benefits to the community. ORAI has installations in Broward County, Florida, and plans to expand its work across other coastal sites throughout Florida. Meanwhile, Coral Vita is developing solutions that encourage the growth of coral reefs up to 50 times faster while boosting their resilience against climate change. This Bahamian company was the inaugural winner of the Duke and Duchess of Cambridge Earthshot award of $1 million. Over a period greater than a decade, Ocean Exchange featured twenty finalist solutions related to coastal resiliency including Econcrete from Israel, the Mangrove Action Project from the U.S.A. (WA), CALTROPe from Hungary, and IntelliReefs from the U.S.A. (UT).

Investable solutions with a focus on emissions reduction help support sustainable practices, mitigate global temperature rises, reduce ocean acidification, and create innovative technological advancements with economic opportunities. Solutions like Element Resources have been promoting its solution to reduce emissions and mitigate climate change through its development of zero-carbon energy supply infrastructures. This energy storage solution facilitates the use of renewable energy by smoothing out energy availability due to the intermittency of renewable energy production, if from solar or wind for example. Various renewable energy paths are thought to be essential to reducing emissions such as CO2. This in turn reduces the impacts on marine ecosystems and can lead to climate stability. In the period exceeding a decade, Ocean Exchange featured over fifty startup solutions for emissions mitigation and reduction, many reducing emissions at the source or by use of renewable energy. Three winners applied to our process from incubators based in the U.S. Department of Energy National Labs.

Other solutions such as Water Warriors utilize a versatile approach to remove phosphate and other harmful nutrients from water, thereby reducing waste and ocean pollution. Solutions with a water management focus help address the consequences of a changing climate on freshwater resource protection. Effective and sustainable water management practices help safeguard water quality for coastal communities, as well as encourage the reduction of polluting weather runoff. There is a current movement to better integrate the activities of ocean stakeholders and those with land-based water management roles in the search for climate solutions; Ocean Exchange plays an important role in that integration through our solution recruitment process and our expert network.

In conclusion, ocean solutions, such as those in the focuses mentioned above, are imperative to addressing some of our most prominent global concerns. The complex relationship between our oceans and climate demands urgent action. During September 2023 Climate Week in NYC, there were multiple ocean-based climate groups convening to harness the power of different stakeholders for a common mission. The National Oceanographic and Atmospheric Administration (NOAA) recently announced U.S. federal funding to create and amplify existing accelerators for ocean-based climate solutions. As we strive to restore, protect, and maintain our oceans, it is crucial that we also emphasize the need for accessible capital, philanthropy, and other grants to support innovative solutions. The symbiotic ecosystem of financing, science, and sustainable practices is a preeminent requisite to unlocking a brighter, more resilient future. De-risking these investable solutions is not just an operational and financial strategy but more so a pathway towards safeguarding our planet’s most vital resources. The expansive network of those involved in fostering startups, knowledge sharing, and responsible stewardship can ensure that our oceans remain an important resource in the battle against climate change. The focuses and exemplified solutions mentioned above are a testament to our commitment to a sustainable future for generations to come.

Article by Millicent Pitts and Alex Akkaoui, Ocean Exchange

Millicent “Milly” Pitts is the executive director of the international non-profit, Ocean Exchange, that gives non-dilutive funding to innovative start-ups that support healthy oceans and a sustainable Blue Economy. She previously was an executive in the chemical/materials industry for 30 years, living in Houston, Philadelphia, Cleveland and Valencia (Spain). In addition to her role at Ocean Exchange, she is a mentor with Creative Destruction Labs (Oceans) in Halifax, is on the Leadership Team of OceansVisions.org, and has previously mentored or judged in collaboration with other partners such as Clean Tech Open and NREL. She leads the Ocean Exchange efforts to grow and communicate with the community of ocean and blue tech innovators. She holds an MBA from the Wharton School at the University of Pennsylvania.

Alex Akkaoui serves as Ocean Exchange’s Community Manager. Alex is an MBA graduate and current doctoral student at Nova Southeastern University specializing in organizational leadership. He has a strong passion for blue economy startups that seek to advance our learning of the ocean while providing solutions to maintain healthy and diverse marine habitats. Alex anticipates remaining involved in the influential network of organizations that support innovative and sustainable startups as they evolve into scalable solutions. 

Adapting to and combating climate change through aquaculture investment

Maine, with nearly 3,400 miles of coastline and over 2,000 coastal islands, is inextricably tied to the sea. The Gulf of Maine has long supplied Mainers with both livelihoods and food but is one of the fastest warming bodies of water on the globe, with the average temperature rising by four degrees Fahrenheit over last four decades¹.   

At three and a half times faster than the global average, the change is enough to materially affect people’s dinner plates and paychecks. 

And it’s not just the changing climate: Maine’s working waterfront is seemingly being squeezed on all sides, with high costs for bait and fuel, loss of working waterfront access to development, ongoing uncertainty regarding regulatory demands for ropeless gear, and worries about the impact of offshore wind on already vulnerable fisheries. 

The overall annual impact of Maine’s fisheries (or Maine’s “Blue Economy”) is an estimated $3.2 billion and 33,300 jobs.² That’s economic input and jobs Maine can’t afford to lose – particularly in Downeast Maine, where the sector accounts for 45% of all direct jobs.³ 

For Coastal Enterprises, Inc. (CEI), a community development financial institution (CDFI) based in Brunswick, Maine, investing in aquaculture supports community economic development by diversifying income streams along the rural coastline. It builds climate resilience while helping to ensure that families that have worked Maine’s waters for generations can have opportunities to do so for generations to come, while also welcoming a new crop of sea farmers to the coast. 

This interview took place in July 2023. In this interview, Cameron Barner discusses his path to small business ownership, along with Love Point Oyster’s story and where CEI fits into the picture.

The Small Business: Love Point Oysters 

Try telling a banker that your first crop will take three years to harvest, that their collateral will literally be in or underwater, and sales profitability is several years away. That’s the challenge many oyster farmers face when trying to get startup capital. 

It was one faced by Cameron Barner of Love Point Oysters, when he realized that the company had outgrown their small skiff and would need to purchase an additional boat. “Aquaculture is a risky business, so traditional banks don’t always take you seriously; they have hard lines where they won’t lend.” Barner turned instead to CEI’s Sea Farm Loan. “We didn’t have the capital to go buy a new boat outright, so we reached out to CEI.” 

CEI has over 45 years of experience working with marine-based businesses, with full time fisheries and aquaculture experts providing technical assistance and business advisors who have developed accurate and detailed financial forecasting models for the industry. From experience they understood the risks and potential of these businesses and provide not only a loan, but one designed specifically to meet the needs of Maine’s working waterfront, with a low-interest rate and seasonal payment schedules that help marine businesses thrive and reduce the burden of carrying debt. This kind of tailored product is made possible through long-term, flexible low and no-cost philanthropic and government funding raised by CEI, which then passes along those reduced costs and flexibility to the borrower. 

Working with a community development financial institution has additional benefits beyond access to capital, as CEI was able to connect Barner with a business advisor and sector experts at no-cost. “That relationship was just so positive, we worked with our loan officer and after that we got connected with the Maine Small Business Development Center at CEI. It just really helped us kick start our business into the next phase and thinking about different opportunities.” 

“Oyster is a virtuous protein.” says Barnes. “It’s a creature that gives so much and takes nothing in return. It really has little to no negative impact on the environment and it’s pretty much only positive in terms of water quality. Growing oysters is good.”

Thanks to the investment in equipment, plus advising, Love Point is growing, with goals to increase distribution beyond southern Maine, which is good for business and the environment.

Working Waterfront Access for the Industry: Sea Meadow Marine Foundation

Currently, only 20 miles of Maine’s coast remain as commercial working waterfronts, particularly as residential developments displace traditional uses. Many fishermen and aquaculturists have limited access to vital wharf infrastructure, including tidal access, commercial hoists, forklifts, and room to load and maneuver trucks⁴ – making it all the harder and more expensive to maintain a business. 

On a statewide basis, the Maine Working Waterfront Access Protection Program provides a channel for preserving working waterfront properties. Established by the Maine legislature in 2005, with significant advocacy from CEI, this bond-funded program allows the state to buy development rights on a piece of working waterfront to ensure future development will not limit commercial marine use. The program has preserved 34 properties to date, but ongoing funding is dependent on passing new bonds every 2-3 years, and the application process is competitive – meaning that while it’s an incredibly important tool, it doesn’t work in all situations. 

The Even Keel Boatyard and Marina in Yarmouth, Maine is a notable exception to the trend of lost access. In 2020, the 12-acre boatyard, with 7 acres of salt marsh and 4 acres of land, went up for sale for $1.26 million. The owners didn’t want to sell to developers, but none of the businesses currently using the boatyard had the funds to make the purchase. Led by local dock builder Chad Strater, a group of marine professionals banded together to form the nonprofit Sea Meadow Marine Foundation, with the goal of preserving the Even Keel boatyard and other working waterfront properties. 

“The working waterfront is a critical aspect of Maine’s economy and environmental health,” affirms Strater, “It’s part of our economy and part of our lifestyle. If the working waterfront goes away, it’s not coming back.”

Sea Meadow was able to purchase the Even Keel property in December 2021. Again, a combination of government and philanthropic dollars made the enterprise possible, including a U.S. Department of Agriculture Community Facilities loan from Coastal Enterprises Inc. and an operating grant from the Elmina B. Sewall Foundation in Maine. 

Now Sea Meadow Marine, as the property was renamed, host a variety of marine-based businesses including a business hub for early-stage fisheries and sustainable aquaculture businesses alongside marina services, heritage boat builders, and recreational marine organizations, including Love Point Oysters; the US Northeast division of Net Your Problem, a nonprofit that recycles used fishing gear; and the Boatyard, a boat equipment retailer/service provider co-owned by Statler and Sea Meadow’s Board Secretary Nick Planson, that has a goal to help to convert local aquaculture, harvesting and fishing operations to 100% electric power.

Financing a More Resilient Future

The financing packages for Love Point Oysters and Sea Meadow both required funding from impact investors, public, and philanthropic sources to make them workable. Even while motivated entrepreneurs like Barner and Strater look ways to build more resilient and climate-friendly businesses, new equipment, particularly more ocean-friendly equipment like electric engines are expensive and pressure from developers remains high. Fisheries, at their core, are a commodity-based industry, with fluctuating dock prices that make traditional debt at market rates hard to plan for and to bear. Grants combined with low-cost climate-motivated investments from individuals and foundations allow CEI, and other mission-based funders, the ability to make capital accessible and affordable to those entrepreneurs shifting the tide to a more resilient and sustainable working waterfront – a model that is working for Maine and can be replicated in communities along every coast. 

Article by Nick Branchina, Director of Fisheries and Aquaculture at CEI; and Hugh Cowperthwaite, Senior Program Director of Fisheries and Aquaculture at CEI

^{1 Ocean warming is ‘off the charts’ this summer. But not in the Gulf of Maine. Why? | WBUR News
2 FINAL-SEAMaine-Economic-Impact-Analysis-Report-2.pdf
3  ibid
4 WWF-Report_web.pdf (islandinstitute.org)} 

Above: Seal on iceberg photo courtesy of Philippe Cousteau Jr., SeaVoir Wellness

For three generations, our family has pioneered the protection and restoration of our ocean. Usually, that meant working in education, producing documentaries, or writing books. But over the past decade, we have come to realize that unless society builds financial systems that incentivize positive social and environmental outcomes and the corresponding economic opportunities for people, we will never solve the mounting environmental crisis facing our planet. 

With that in mind, we have expanded our work into entrepreneurship by founding a company called SeaVoir Wellness that is designed to actively restore the ocean and help solve the biggest climate catastrophe that no one knows about.

But we’re getting ahead of ourselves, so let’s start at the beginning. Two years ago, on an unseasonably warm day in Antarctica we jumped into our zodiacs to head out and conduct water quality testing near a glacier. It was the first day of our expedition and though we were warned about the changes we would encounter but we were shocked to see the impacts of climate change all around us. Not only the obvious changes, like retreating glaciers, but also the less obvious ones, like reduced salinity and warm water temperatures. Changes that are wreaking havoc on the Antarctic ecosystem. 

Our trip was part of a multi-year campaign to establish three new marine protected areas (MPAs) in the Southern Ocean. As members of Antarctica 2020, a global group that is tasked with advocating for these MPA’s we were excited to witness the beauty of the white continent with our own eyes and gather media to support the campaign. Covering a total of 7 million square kilometers in the Weddell Sea, the East Antarctic and the Antarctic Peninsula, these three MPAs are some of the richest and most important ocean areas in the world and would result in the single largest act of conservation in human history. 

Specifically, these three areas would focus on protecting key habitats for krill. And while most people have no idea what krill are, from their impact on global climate systems to ocean biodiversity, it is no understatement to say that krill are the superheroes of the ocean.

To put into context just how important they are, we must go back in time a few centuries. Most people believe that humanity’s large-scale disruption of the global carbon cycle started with our utilization of coal and then oil and gas as drivers of economic growth. That is not true. Our disruption of the global carbon cycle happened nearly 200 years earlier, during the late 17th century, when whaling really started to become a major industry in North America. The primary use of whales was for their oil to power lights, though baleen was also prized for being used to make corsets and hoop skirts. For hundreds of years, North American and, to a lesser extent, European and Scandinavian whalers crisscrossed the ocean killing millions of whales. But what does this have to do with the carbon cycle? Whales are an enormous carbon sink; in other words, they absorb and store carbon in their bodies. It is estimated that one whale stores carbon equivalent to 1500 trees in its tissue over its lifetime. When they die, they sink carrying that carbon with them to be sequestered in the deep ocean for millennia. But whales also have an even more important climate role, they are critical to an ecological system that is arguably the single largest carbon sink on Earth, a system that centers around a creature that measures less than two inches in length – krill.  

Krill are tiny crustaceans that live throughout the ocean, but which are most abundant in the Southern Ocean around Antarctica. They are the central characters in the world’s largest carbon cycle, and it all comes down to poop. You see, krill eat phytoplankton, tiny plant-like creatures that live at the surface of the open ocean. Phytoplankton create energy through photosynthesis, and part of that process is (like trees) absorbing carbon out of the atmosphere and emitting oxygen back into it. Side note: phytoplankton are responsible for generating 50 percent of the oxygen on Earth through photosynthesis, which means they absorb carbon and emit oxygen (much more than the rainforest). 

Phytoplankton hold that carbon in their tissue until they are eaten by their main predator, krill. When krill eat phytoplankton, their poop carries that carbon with it as it sinks to the ocean floor. Simple as that…krill inadvertently sequester 13 billion tons of carbon a year in the deep ocean by doing something as natural and fundamental as pooping.

In addition, krill are a key food source for whales, which then sequester the carbon they consume in their bodies for up to 100 years until they die. But it doesn’t stop there; whale poop (who would have thought it all came down to poop?) is rich in iron. That iron, in turn, is a critical compound needed by the phytoplankton to grow, and the process keeps going on and on. 

So, when whalers killed millions of whales, scientists initially assumed krill populations would explode. As our understanding of the systems became more sophisticated and our use of ice, coral, and sediment cores became more widespread, scientists discovered that the decline in whale populations also corresponded with a crash in krill and phytoplankton populations. Deprived of iron-rich feces to nurture them, phytoplankton populations crashed, reducing their function as carbon sequestering machines (remember, they sequester billions of tons of carbon a year). Then, without enough phytoplankton, krill populations crashed, which in turn hurt not just whale populations but all the other creatures like penguins, seals, and countless fish populations as well. Almost everything in the Southern Ocean either eats krill or eats something that eats krill. So, in addition to disrupting the global carbon cycle centuries before most people think, humanity started destroying the ocean food web on a large scale a lot sooner too. 

That’s where the three MPA’s come in. They are being proposed in areas which are critically important habitats for not only krill but many other species, from adélie and chinstrap penguins that get almost all of their calories from krill; to crabeater seals, fur seals, gentoo penguins, and whales, like humpback and fin whales whose populations are recovering after centuries of exploitation. Large, protected areas that lack the stressors that come from industrial fishing are more resilient to the effects of climate change, which is critical in the face of rapid environmental changes in Antarctica.  

So, establishing three areas to protect a species central to the functioning of the world’s largest single carbon sink, the biodiversity of the ocean and oxygen production would seem like a no-brainer. However, progress towards establishing those protected areas has been stymied precisely BECAUSE of the presence of krill. Far from protecting them, over the last few decades a new threat has emerged: the krill fishery. Of the 26 countries that make up the governing body of Antarctica’s waters CAMLRR, 24 countries support the establishment of the MPA’s. Only Russia and China are blocking them, and they are doing it for the krill fishery. But why fish for krill? It doesn’t make sense. Why would humans target a creature that is so pivotal to the world’s single largest carbon sink (the equivalent of taking 23 internal combustion cars off the road each year), is critical to the generation of over 50 percent of the earth’s oxygen, and provides the basis for one of the ocean’s most important food webs? 

When we asked that question, the answer shocked us. 

70 percent of the market value of the krill fishery is for the Omega-3 supplement market in North America (with the leftover going to pet food and aquaculture feed). Another source of Omega-3’s – fish oil – is also terribly destructive to the ocean. 

We realized that this was a classic case of the market incentivizing bad behavior. Thanks to the inertia of fish oil becoming shorthand for Omega-3s over decades, aggressive greenwashing by fish and krill oil companies, and a lack of efforts to raise consumer awareness about the issue, the fish and krill industry has become a multi-billion dollar market. And the kicker is that fish and krill don’t even make their own Omega-3s; they get them by eating algae! Over the past few years, technology to extract Omega-3’s from algae has matured and is at price parity with krill and fish oil. The problem is that consumers don’t know. What is even more interesting is that algae oil is a superior Omega-3. It’s more bioavailable to our bodies than fish or krill, it is free of the common toxins found in the ocean (heavy metals, PCBs, microplastics, and more), it is farmed on land creating clean, local jobs, and it won’t give you the dreaded fish burps! 

Governments around the world are investing billions to advance technologies to sequester carbon that up until now have returned very little success. Yet, at the same time we are ignoring and even degrading the systems which ALREADY sequester billions of tons of carbon. 

As storytellers for the ocean, we realized that we had to take action. So, we founded SeaVoir Wellness and our first product is algae-based Omega-3s designed to provide a better alternative to krill or fish oil. Too often the solution to environmental problems is to stop buying, stop consuming etc. But for people who want the benefits of Omega 3s that isn’t an option. SeaVoir is a way for us to advance a conservation agenda AND provide people with a better product. Going forward, our company is dedicated to building not a sustainable brand, but a restorative brand and driving market solutions to the dual crisis of climate change and biodiversity collapse while helping people improve their health and wellness. 

Just by switching your daily Omega-3 away from fish or krill, and to the primary source of algae, you can make a positive difference in the ocean. Every. Single. Day. 

SeaVoir is one example of how a company can build a restorative Blue Economy that benefits people and the planet and in the case of Omega 3s, safeguards Antarctica and the Southern Ocean. 

As Philippe’s grandfather Jacques once said about Antarctica, “may the last continent explored by man, be the first continent not plundered by man.” 

Article by Ashlan Cousteau and Philippe Cousteau Jr, Co-Founders of Seavoir Wellness. 

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