The Blue Economy: an emerging investment frontier hiding beneath the surface

In the latest article in my Sustainability Blueprint series, I explore the emergence of the blue economy as an investable asset class, grounded in a belief that investment will follow clarity of opportunity in an area of investment that is still somewhat ‘concealed’ beneath the water’s surface.

At the Milken Institute’s Global Conference last week, I had the pleasure of moderating a panel dedicated to water security. As global water demand rises and supply becomes less predictable, it is increasingly being priced as a core economic risk. But public funding alone is not enough to deliver the infrastructure upgrades, watershed protection, and resilience investments needed to provide water reliably to households, industry, and agriculture.

This is a recurring theme in sustainable investment. That once investors can clearly see the opportunity, private capital can be mobilised to plug the public financing gap. Might we be starting to observe this trend within an economic system that takes up more than 70% of the world’s surface?

Connecting the dots, underwater

Let’s start with some headline stats. The “blue economy”, which describes the vast network of economic activity tied to oceans and seas, could be worth up to US$3 trillion by 2030. It underpins global trade, food systems, and infrastructure, while low-lying coastal regions alone are home to around 10% of the world’s population.

There is also a deeper, often overlooked dynamic at play: a symbiotic relationship between ocean health and human health, absorbing carbon, heat, and the by-products of industrial activity. But that relationship is becoming increasingly circular. Chemicals, plastics, runoff and pollution do not simply disappear into the ocean; they find their way back into our food systems, our water, and can affect our health. Ocean degradation is no longer just an environmental issue; it’s a financial and systemic risk too.

Rising ocean temperatures are contributing to more extreme weather events, while sea-level rise is increasing the exposure of coastal infrastructure to flooding and erosion. An estimated 95% of global coastal areas could be affected by sea-level rise by the end of the century, with profound implications for insurance, asset values and economic stability. Coral reefs, which support the livelihoods of around 500 million people, are under threat, with knock-on effects for food security and local economies.

The investment opportunity starting to take shape

We see the blue economy as part of a broader shift towards nature-based investing, yet it remains firmly in its infancy. In our Nature Market Research study, gathering responses from 70 asset managers covering 89 private nature strategies, we found that the vast majority of capital today is still being directed towards land-based solutions such as forestry and agriculture, accounting for 71% of strategies surveyed. By contrast, ocean-focused investments remain a small and underdeveloped segment.

There are some plausible reasons for this. Oceans are inherently more complex to invest in. Governance is fragmented, measurement is challenging, and revenue models are less established. Unlike forestry, where carbon credits provide a relatively clear monetisation pathway, the financial value of healthier oceans is harder to quantify. Despite this, we are starting to see the building blocks of an investable market.

One of the most important developments has been the growth of carbon and biodiversity markets. More than 63% of nature-focused funds now consider carbon or biodiversity credits as a source of revenue, helping to underpin baseline returns. While these credits are often treated as upside rather than the primary driver, they are playing an important role in making early-stage projects financially viable.

Beyond that, a broader set of revenue streams is emerging, from sustainable aquaculture and regenerative ocean farming to ecosystem restoration and circular economy solutions targeting marine waste. Innovation is also accelerating, driven in part by universities, start-ups and new forms of capital willing to take early risk.

However, we should also recognize the challenges. Nature-based investments are still often perceived as high-risk and low-return, particularly by institutional investors. Part of this is a perception issue. Too often, these opportunities are framed primarily in terms of environmental or social impact, which can deter investors focused on financial performance. In reality, the investment case is evolving. Some investment strategies offer diversified revenue streams — from carbon credits and product sales to land or asset appreciation — and have provided historically low correlation to traditional asset classes, supporting portfolio diversification.

The other challenge is time horizon. Nature does not operate on quarterly earnings cycles. Most nature-focused funds have investment horizons of 10 to 15 years, reflecting the time required for ecosystems to recover and value to be realized.

This leaves us at an interesting juncture, where we believe the blue economy represents a frontier opportunity, sitting at the intersection of climate, biodiversity and economic resilience. It is not yet a mature asset class, and it will take time for standards, measurement frameworks and scalable models to develop. But the direction of travel is clear.

More than half of global GDP depends on nature, and the financial system is only just beginning to price that reality. As that shift accelerates, the oceans could increasingly be recognized as a core part of the investment landscape, not simply an externality. The question is not whether capital will flow into the blue economy, but how quickly and who is positioned to lead.

This article is also published on LinkedIn. illuminem Voices is a democratic space presenting the opinions of leading Sustainability Thought Leaders, their views do not necessarily represent those of illuminem.

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