The Aquatic Ecosystem Biodiversity Opportunity

Mazarine has recently become very bullish on opportunities at the intersection of freshwater and marine ecosystems, and the growing biodiversity indsutry.

Protecting native endangered aquatic species and controlling aquatic invasives is part of SDG 13 (Climate Action) and SDG 14 (Life Below Water)

As an impact investor entirely focused on water-related risks, Mazarine is bullish on the biodiversity vertical. . While everyone in 'water' would naturally agree that protecting native endangered aquatic species and controlling aquatic invasives is important, it's traditionally not been included in the so-called 'water industry". For this reason, we are even more bullish.

Technology verticals that fill our deal-flow pipeline

Remote Sensing and AI: Innovations in remote sensing and artificial intelligence (AI) are revolutionizing how we monitor biodiversity in freshwater and coastal ecosystems. AI-driven models, combined with satellite data, are used to track changes in water quality, aquatic species populations, and habitat conditions. For example, Earth observation technologies can monitor the health of coral reefs and wetlands in real time, allowing for faster responses to environmental degradation.

eDNA (Environmental DNA) and eRNA (Environmental RNA): These methods allows scientists to collect DNA and RNA traces left by organisms in the water, making it easier to detect the presence and activity of rare or endangered species in lakes, rivers, and coastal areas without invasive methods. It’s a powerful tool for biodiversity monitoring.

Hydroacoustic Technologies: These innovations help in tracking fish populations and marine life in freshwater and coastal environments by using sound waves. These are especially useful in large water bodies where traditional sampling is challenging.

Keeping an eye on policy and governance

Integrated Water Resources Management (IWRM): Many governments are adopting IWRM frameworks, which promote the sustainable management of water, land, and ecosystems. These policies encourage stakeholder participation and balance economic, social, and environmental needs to maintain biodiversity in freshwater ecosystems.

Marine Spatial Planning (MSP): Coastal areas are seeing an increase in MSP initiatives, where regions are zoned for specific uses like conservation, fishing, or recreation. These plans aim to protect biodiversity while allowing sustainable use of marine resources.

Biodiversity Targets and Protected Areas: Policies supporting the expansion of Marine Protected Areas (MPAs) and freshwater conservation zones are critical. The UN’s Post-2020 Global Biodiversity Framework advocates for protecting 30% of the world’s freshwater and marine ecosystems by 2030 to reverse biodiversity loss.

The role of biodiversity credits and offsets

Biodiversity Offsetting: This approach allows for compensation for habitat loss due to development by creating, restoring, or preserving biodiversity elsewhere. In coastal marine ecosystems, biodiversity offsets are often used to mitigate damage from infrastructure projects like ports or urban development along coasts.

Blue Carbon Credits: Mangroves, seagrasses, and tidal marshes, which are crucial for both biodiversity and carbon sequestration, are receiving attention through blue carbon initiatives. These ecosystems store carbon more efficiently than terrestrial forests, and selling carbon credits from these areas provides an incentive for conservation.

Freshwater Ecosystem Services Credits: Similar to carbon credits, freshwater ecosystems are being considered for biodiversity credits, where ecosystem services such as water purification, flood control, and habitat provision are quantified and traded. This incentivizes the protection of wetlands and other freshwater bodies.

Where the ocean meets the land

Reef Restoration Technologies: In response to the degradation of coral reefs, advanced restoration technologies like 3D-printed reefs and coral gardening have emerged. These innovations aim to accelerate reef recovery, crucial for maintaining biodiversity in marine ecosystems.

Living Shorelines: Instead of traditional seawalls, living shorelines use natural elements like plants, sand, and rock to stabilize coastal areas while promoting biodiversity. These solutions not only protect against erosion but also create habitats for marine species.

Conclusion

This realm has often been overlooked by the so-called 'water industry', yet as a water risk investor, this fits neatly into Mazarine's thesis. We are increasingly bullish on the opportunity to generate social and environmental impact, as well as financial return in backing early-stage companies with innovations that are competitive in freshwater and marine biodiversity.

For questions about the this realm, please contact Mazarine here