Every 8th of June people are invited to stop what they’re doing and think about the Ocean, what it means to us, and what we can do to help protect it.
Ocean Unite and the AXA XL Ocean Risk Initiative’s work is centred on the Ocean every day, so we don't need to stop. Instead we wanted to celebrate and share the story of our work together to help regenerate ocean health.
Ocean Unite and an insurance company may seem unlikely partners, but in fact we have a lot in common. We are both future-focused, data and science-led, and alarmed by the unprecedented changes happening in the ocean and what they mean for the future. We also both know that dealing with challenges of this scale will take multidisciplinary action and alliances.
Human activity is now changing the ocean faster than at any time in the past 65 million years resulting in major threats to communities, economies, and ecosystems and the resulting vulnerabilities and risks will have significant consequences over time. The ocean has absorbed about 30 per cent of our C02 emissions and around 90 per cent of the heat from those emissions.
New research shows that the rate of ocean warming has quadrupled since the late 20th century, with increasingly more heat finding its way down into the deep ocean. The knock-on effects of these changes are huge, particularly given that the ocean is home to some 80 per cent of all of Earth’s biodiversity. Fish stocks are moving, habitats and ecosystems are being degraded, storms are increasing in intensity and sea levels are rising – in fact, it is projected that by 2050, 800 million people will be at risk of coastal flooding and storm surges. This will have lasting impacts on food security and population stability.
These emerging and intensifying ocean-based threats have created a whole new category of risk: Ocean Risk. Coastal communities in small island developing states, developing countries and other low-lying areas are especially vulnerable. And these changes also are not gender neutral. They have disproportionate impacts on women and girls, so gender-based solutions are critical. We need to identify where and how the impacts of these hazards can be reduced by taking pre-emptive action that reduces exposure and vulnerability and builds resilience to these changes.
Insurance is by definition an investment to guard against potential future risk. The insurance industry is constantly seeking out data and knowledge to model forward and price emerging risk. AXA XL launched its Ocean Risk Initiative in 2017 to generate research, communicate the impacts of the changes we’re seeing in the ocean and to identify and develop effective solutions.
With just 30 per cent of economic losses caused by natural disasters currently covered by insurance – and as little as 5 per cent or less in emerging economies– closing the so-called protection gap is a priority for governments and the insurance industry in order to prevent catastrophic levels of loss that can wipe out decades of development and are impossible for vulnerable communities to recover from.
Ocean Unite and AXA XL (XL Catlin at the time) alongside other partners, including the IUCN convened the world’s first Ocean Risk Summit in Bermuda in May 2018, bringing together leaders in politics, finance, academia, science, the ocean community and insurance to deepen our understanding of the challenges we will face from ocean derived hazards and cultivate collaborative solutions. We explored issues from national security and migration to food security and global health, and what was absolutely clear was how important it would be for these different sectors to come together, and to develop a common understanding and language to combat ocean risk.
Since the Summit, AXA XL and Ocean Unite have deepened our partnership. A new Ocean Risk and Resilience Action Alliance or ORRAA, is being built, together with partners including the Government of Canada, The Nature Conservancy, Bank of America, the UNDP, InterAmerican Development Bank (IDB), Willis Towers Watson, Global Resilience Partnership, Stockholm Resilience Center, and the conservation organisation Rare.
The Alliance will bring multiple players together to pioneer breakthrough insurance and finance instruments that drive investment into coastal natural capital, green infrastructure, rebuilding marine biodiversity and growing resilience to ocean change. It is focused on addressing ocean risk and building resilience in the communities that need it most, particularly in vulnerable coastal areas and small island developing states. It also links well with the Sustainable Blue Finance Principles that have been developed by the European Union and WWF.
We were delighted when, with leadership from Canada and France, the Alliance was welcomed by the G7 Environment Ministers meeting this past May in France. The ministers noted the under-utilization of economic instruments and supported ORRAA to expand knowledge, build resilience and drive investment, innovation, finance, insurance, expertise and – crucially – political will. All 7 countries as well as the European Union, Fiji, Mexico, Norway and India agreed to become part of the Alliance.
We are excited about the ability for ORRAA to pilot and scale solutions. Examples of projects include working to promote resilient and sustainable small-scale fishing practices through the development of micro-insurance products and micro-finance loans. Also, life insurance policies for small-scale fishers, benefiting the financial resilience of families, particularly women. AXA XL and The Nature Conservancy (TNC) are developing a Blue Carbon Resilience Credit, giving both a carbon and resilience value to mangroves, ecosystems which are under particular threat.
The Alliance will also use insurance and finance tools to incentivise environmental stewardship for biodiversity, and the development of sovereign and individual parametric insurance measures for coral reefs and mangroves which will ensure swift payouts enabling faster restoration, which is known to reduce harm to both the environment and increase community resilience.
We are looking forward to working with our partners as we build the Alliance over the coming months and years
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This post is part of a series produced by Virgin Unite in partnership with Ocean Unite, an initiative to unite and activate powerful voices for ocean-conservation action