The world’s oceans, lakes, and waterways play a vital role in the health of the global economy and the Earth. As greater regulatory funding and focus turns to preserving the health of the ocean economy, investors find themselves with an opportunity to capture climate transition in an often overlooked arena.
The ocean generates about half of all oxygen for Earth, and currently absorbs roughly a third of all carbon dioxide. It’s also the home of global trading routes, the source of millions of jobs, and contributes billions in GDP.
The National Oceanic and Atmospheric Administration estimates that just 14% of coastal-adjacent counties in the U.S. generate 45% of the country’s GDP. Collectively, these coastal counties made up the third largest GDP in the world as of 2020, lagging only China and the broader U.S. economy.
Tackling the climate crisis includes ensuring the health of the world’s oceans and supporting a sustainable blue economy. That’s because “the ocean and climate change are inextricably linked,” explained Peter Thomson, UN Secretary-General’s Special Envoy for the Ocean, in TIME last November.
“The good news is that recently there’s been a surge of engagement in ocean conservation and the development of a truly sustainable ocean economy that recognizes this reality,” Thomson said.
The Department of Commerce recently awarded $3.9 million to the NOAA to encourage emerging climate technology growth. The funding targets small businesses developing new technologies for climate resilience through the Ocean-based Climate Resilience Accelerator program. The funding comes from the Inflation Reduction Act and is one part of the global regulatory response to the urgency of the blue economy’s health.
KSEA Invests in the Ocean Economy Sustainability Transition
As further pressure and urgency grows, so too will funding as the world’s economies shift to sustainability. Given the outsized role that coastal communities play in economic global health, the impetus for change is great. For investors, this presents opportunity to capture the transition happening in the blue economy.
The KraneShares Rockefeller Ocean Engagement ETF (KSEA) seeks to invest in companies that have significant impacts on oceans and ocean resources, known as the “blue economy.” Investing in these companies allows Rockefeller Asset Management, the fund’s subadvisor, to deploy its proactive engagement strategy. Active engagement with companies provides the dual benefit of risk reduction and increased sustainability.
Rockefeller Asset Management brings more than 30 years of ESG investing experience to the table. Additionally, the firm holds more than a decade of experience investing in the ocean economic system, and partners with The Ocean Foundation.
KSEA invests across commercial fishing, waste management, aquaculture, renewable energy, and other industries. The strategy focuses primarily on companies dubbed “ocean improvers.” These companies offer the most significant potential positive impacts for sustainability via engagement. The fund also invests in companies categorized as “ocean leaders” and “ocean solutions.”
The strategy avoids companies that endanger ocean health, such as deep-sea mining companies or offshore oil. KSEA has a management fee of 0.86%.
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