Turning the Tide A Financier's Guide to Investing in Blue Carbon Ecosystems 2026

Executive summary Mangroves, tidal salt marshes and seagrass meadows – together called blue carbon ecosystems – span over 51 million hectares of land and water.1 Blue carbon ecosystems can store up to five times more carbon per acre than tropical rainforests,2 support biodiversity, underpin coastal communities’ livelihoods and protect climate-exposed coastal communities from floods and storms.3 It is estimated that these ecosystems provide services valued at $190 billion annually to the global economy.4 Yet, despite this strong economic contribution, blue carbon ecosystems are currently significantly underfunded. It is estimated that coastal nature-based solutions receive less than 1% of international climate finance.5 Unfortunately, without adequate financing, these habitats decline – approximately 30% of mangroves around the world have been lost over the last 45 years6 and 7% of seagrass is being lost every year.7 Efforts are afoot from governments, public institutions, corporates, philanthropy and some private financial institutions to direct finance into addressing this trajectory of decline, and to leverage the significant financial opportunity presented by innovations in the blue economy. As demonstrated by the World Economic Forum’s publication “Investing in Mangroves: The Corporate Playbook”, investment in mangrove ecosystems can offer compelling commercial and reputational benefits to companies.8 Nevertheless, private finance is not currently moving at the pace and scale required to support the conservation and restoration of these highly valuable ecosystems. The team behind this paper identified five common barriers for private finance flows, including (i) a long development timeline; (ii) regulatory complexity; (iii) high transaction costs; (iv) demand uncertainties; and (v) lack of scale. Across these financing avenues, financial institutions can make eight key interventions to allocate or unlock private finance flows into the projects and enterprises that support the conservation and restoration of blue carbon ecosystems. 1. Through blended finance structures, participate alongside concessional or philanthropic capital providers to fund early-stage project/enterprise development and strengthen the pipeline for later-stage investment. 2. Establish relationships with commercial, concessional and philanthropic capital providers to coordinate financing and ensure funding availability across project and enterprise life cycles.3. Partner with buyers’ clubs or other alliances to aggregate demand and create stable revenue streams for blue carbon credits and other sustainable products derived from blue carbon ecosystems. 4. Develop structured finance products or platforms to aggregate small-scale projects and enterprises, diversify risk and deliver finance at scale. 5. Utilize blended finance structures to improve the risk-return profile of blue carbon ecosystem transactions and catalyse greater private participation. 6. Create insurance and risk-sharing products to de-risk projects from market and political exposure. 7. Integrate blue carbon ecosystem risks and benefits into investment strategies, credit risk assessment and asset valuation models. 8. Deploy established financial instruments with conservative assumptions on emerging revenue streams, and refine models as markets mature and data availability improves. Importantly, underpinning these recommendations is an acute awareness that coastal communities rely heavily on blue carbon ecosystems but have limited access to finance, social services and healthcare, as well as alternative non-extractive income sources. The recommendations and interventions outlined in this paper have been developed with a fundamental understanding that projects and enterprises will only deliver durable conservation and restoration outcomes for blue carbon ecosystems when designed to also improve the livelihoods of blue carbon communities. This paper presents immediate opportunities for financiers to source deals and structure investments in blue carbon ecosystems, so that the projects and enterprises that support the conservation and restoration of blue carbon ecosystems become a bankable and scalable institutional investment theme. By engaging with these opportunities, financiers stand to access new growth markets and generate returns, while delivering significant impact for coastal communities and economies that rely on these important ecosystems. Turning the Tide: A Financier’s Guide to Investing in Blue Carbon Ecosystems 4