The blue (ocean) economy offers many opportunities for private finance to lend and invest in a sustainable and nature-positive way. Here we look at some of the leading examples of best practice in social and environmental sustainability across the coastal and marine tourism sector which banks, insurers and investors can seek out. Tourism is a substantial contributor to the global economy, representing approximately 10.3% of global GDP in 2019 from direct, indirect and induced impact[1], and providing one in ten jobs (World Travel and Tourism Council [WTTC] 2020).
Tourism has grown steadily for more than half a century, and was expected to continue to expand to 1.8 billion tourist arrivals by 2030 (up from 1.4 billion in 2018) (OECD 2020). In 2019 alone, tourism accounted for USD 948bn in capital investment, 4.3% of total investment worldwide that year. Pre-Covid-19, in 2019 tourism growth exceeded annual GDP growth by 40% and represented 25% of all new net jobs over the previous five years (WTTC 2020). It is clear from these global figures that tourism is of enormous significance to the global economy and development.
Despite the scale of the challenges facing tourism such as pollution, habitat destruction, flooding and biodiversity losses, there are opportunities for positive impact. However, unlocking these opportunities often requires innovation and risk financing to surface approaches to sustainability in tourism that are effective and scalable.
To support sustainable development in coastal and marine tourism, we have listed 8 examples of innovative best practice in coastal and marine tourism that you might not know about.
Check out Turning the Tide, UNEP FI’s detailed guidance on financing for the sustainable blue economy for more examples and how they may be material to your institution. The guide also includes an overview of activities to challenge or to avoid financing altogether, based on their sustainability credentials and overall risk. The recommendation may be to challenge certain activities, even where best practice is present in other areas.
Cruise industry
1. Fuel
The cruise industry is estimated to emit between 24 and 30 million tonnes of CO2 per year through transportation, though lower-emission fuels including liquified natural gas and fuel alternatives such as hydrogen are being explored for the industry. Seek out cruise ship operators employing best practice in utilising lower-emission fuels, including liquified natural gas.
2. Pollution and emissions
Cruise ships emit pollution beyond carbon, including sulphur and nitrogen oxides, in addition to noise and light pollution above and below the water. Seek out companies implementing best practice mitigating measures against noise pollution, including noise-reducing technologies, and behavioural changes such as quiet hours, speed reduction and avoidance behaviour in sensitive areas and critical habitat. Also seek out cruise ship companies maintaining emission thresholds at tighter ECA levels at all times, and that ensure waste from scrubbers used to limit emissions is not discharged into the ocean, but handled in port.
3. Routing
Where cruise shops go, and how they interact with their environment and surrounding wildlife has a substantial bearing on their impact, and rules and best practice exist for avoiding wildlife collisions and maintaining safe minimum distances from vulnerable and protected areas. Seek out cruise ship companies following best practice on routing for animal welfare and biodiversity considerations, as well as operators in full compliance with best practice on maintaining a minimum distance from areas of high biodiversity, ecological value or protected areas.
Coastal tourism
4. Location
Where a development is sited is critical to consider in terms of its potential social and environmental impact. Seek out opportunities in already-established tourism areas or brownfield sites with infrastructure that can readily absorb additional capacity and avoids conversion of habitat to new built environment. Also seek out opportunities earmarked by governments away from protected areas that have been selected based on a robust SEA and EIA process to determine impact on habitats.
For example, in 2015 the European Bank for Reconstruction and Development (EBRD) provided a senior loan of up to USD 60 million to support the development and operation of ‘Ayla village’. This marks an initial step in the regeneration of the Ayla Oasis in Jordan, a tourism destination on the Jordanian coast of the Red Sea, across the border from Eilat in Israel and near the city of Aqaba and world heritage sites of Petra and Wadi Rum.
Formerly the site of heavily polluted land featuring hundreds of mines on the Israel-Jordan border, the project sits within a wider context of regeneration in the Aqaba region. It aims to develop a mix of commercial and residential infrastructure that serves tourists as well as the local population. The overall goal of the investment is to support the development of Aqaba into a major tourist destination in the region, while offering support and training for career development in the hospitality sector for local youth, particularly women.
5. Conservation contribution
Hotels and tourism destinations can offer new funding and in-kind opportunities for local conservation efforts. Seek out companies actively working to contribute to the conservation of local wildlife, either through funding or in-kind support.
6. Sourcing and waste
How tourism operations source products and deal with waste can present great opportunities for reducing impact, especially where focus is placed on fostering locally-sourced options for sustainable seafood. Seek out companies actively sourcing seafood from sustainable fisheries and fish farms with full chain-of-custody certification.
7. Community impact
Tourism can create opportunities and share economic benefits with local communities, in a way that integrates local culture and respects customs and traditions, for example through the promotion and development of local products and handicrafts. Early stakeholder engagement is key to lasting impact. Seek out developments that have emerged in the context of robust and participatory stakeholder engagement, as well as developers integrating local culture and respecting customs and traditions to the extent possible.
8. Managing access
In many places, what makes a destination attractive to tourism also makes it vulnerable, and for some locations managing visitor access is crucial to sustaining the natural environment of a destination. Seek out companies offering limited access by visitors to protected areas or critical habitat as well as guidance on visitor best practice and monitoring of impact.
DISCLAIMER: this list does not represent investment advice nor is it an endorsement of any specific investment opportunities. Due diligence should continue to apply in addition to consideration of opportunities enabled by applying the Turning the Tide guidance.