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Executive Summary

<p>The key drivers behind Asia's faster adoption of technology include underdeveloped infrastructure, especially in retail, banking, and healthcare, as well as high internet penetration, young digital natives, urbanization, a rising middle class, and an entrepreneurial spirit.&nbsp;</p>
<p>Key areas where Asia currently holds an advantage over the West include:</p>
<ul>
<li><span style="font-size: 16px;">Super apps &mdash; mobile apps that integrate multiple functions under a single umbrella &mdash; are unique to Asia, yet they are ubiquitous across the region. Driven by younger demographics and high digital adoption, Asian users are immersed in super apps and enjoy the convenience, ease of use, and multitude of services they provide.&nbsp;<br /></span><span style="font-size: 16px;"><br /></span></li>
<li><span style="font-size: 16px;">Asia leads the rest of the world in adopting mobile payments both online and offline. According to FIS, in 2021, digital/mobile wallets accounted for nearly 70% of the e-commerce transaction value in Asia, more than double that of North America or Europe. Likewise, for purchases at physical points-of-sale, nearly half, or 44%, of transactions in Asia were done via digital/mobile wallets, a share 4-5x larger than in the West.&nbsp;<br /><br /></span></li>
<li><span style="font-size: 16px;">Social commerce is a subset of e-commerce that offers consumers an integrated platform with social features, providing more immersive and interactive shopping experience. Asia was the first region to introduce several social commerce formats, such as livestreaming e-commerce. According to Insider Intelligence, the U.S. is expected to reach China's 2018 level of social commerce penetration in 2026, indicating that China is roughly eight years ahead in social commerce.<br /><br /></span></li>
<li><span style="font-size: 16px;">Short-form videos have revolutionized the way people consume and creators develop video content. The commercialization of short-term videos took off in China, most notably through TikTok. Taking note of this video format's success, Western tech giants have been racing to create their own products with similar features, as the competition for users and advertising budgets intensifies.&nbsp;<br /><br /></span></li>
<li><span style="font-size: 16px;">While South Korea is widely regarded as the "home of eSports," the eSports boom quickly spread to other Asian countries, making the region central to the world of competitive gaming. Over the past decade, countries in the West have followed in Asia's footsteps by professionalizing eSports, organizing eSports tournaments, devleloping successful eSports teams, attracting sponsorships, and supporting a growing livestreaming market. Meanwhile, Asia continues to explore new frontiers in eSports: refining the eSports value chain, popularizing and scaling the mobile eSports ecosystem, and creating eSports hubs.<br /><br /></span></li>
<li><span style="font-size: 16px;">Webtoons &mdash; digital comics optimized for viewing on mobile devices &mdash; originated in Asia, where the industry continues to dominate, and are now making inroads into Western markets. South Korean companies have launched local-language versions of existing webtoons, venturing outside of Asian markets. They have also acquired local Western players, exporting their respective original webtoon content via acquired platforms. Like anime, manga, and K-pop, webtoons are softly permeating into Western media and entertainment.<br /><br /></span></li>
<li><span style="font-size: 16px;">In Asia, digital healthcare is significant in terms of both scale and penetration. Digital healthcare is reported to have touched the lives of around 1.5 billion people in Asia (in terms of registered users across emerging healthcare platforms), and its user base is continuing to grow. Furthermore, studies suggest the adoption rate of digital healthcare in developing Asia is 2.5 times the rate in the U.S. Moreover, unlike the West, where various scaled players specialize in each vertical of healthcare services, the digital healthcare industry in Asia has evolved from a standalone play to a comprehensive ecosystem of services.&nbsp;</span></li>
</ul>

We estimate Asia adopts new technologies 8-12 years ahead of the West, making it much more like a time machine to the future. While its infrastructure has historically been underdeveloped relative to the West's. Asia's high internet connectivity, young and increasingly affluent and urban demographics, and entrepreneurial spirit have driven the region to adopt many technologies at a faster pace. In doing so, Asia provides a glimpse of what the future could look like in more developed, Western economies.

Seven Areas Where Asia Gives Interesting Insights Into the Future

We estimate Asia adopts new technologies 8-12 years ahead of the West, making it much like a time machine to the future.  While its infrastructure has historically been underdeveloped relative to the West’s, Asia’s high internet connectivity, young and increasingly affluent and urban demographics, and entrepreneurial spirit have driven the region to adopt many technologies at a faster pace. In doing so, Asia provides a glimpse of what the future could look like in more developed, Western economies. 

Asia as a Time Machine to the Future

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<p>While we all intuitively recognize that oceans are important, the fact is we grossly underestimate how utterly critical they are to our survival as a species. Oceans, the world&rsquo;s largest ecosystem, cover over 70% of the Earth&rsquo;s surface, are home to 80% of all life, and produce 50% of the oxygen we breathe. While society devotes increasing time and energy to terrestrial drivers and impacts of climate change, more often than not we fail to recognize the critical part oceans play in this dynamic &mdash; absorbing 30% of the CO<sub>2</sub> produced by humans and capturing 90% of the heat generated from those emissions.</p>
<p>Given their extraordinary importance and our dependence on oceans, why the utter disdain? The simple fact is that around two-thirds (61%) of the oceans are outside national jurisdictions, meaning responsibility and oversight becomes an issue, and their sheer scale and depth enables an &ldquo;out of sight, out of mind&rdquo; attitude to prevail for many, leaving the ocean underfunded, unrecognized, and undervalued. Despite having their own UN Sustainable Development Goal (SDG 14), oceans received the least funding, and is the least-cited of all of the SDGs, with a funding gap of some $149 billion per year to the estimated required annual spend of $175 billion.</p>
<p>However, there are reasons for optimism, albeit tentative. Recognition of and attention to the ocean crisis is growing rapidly, including the recent Kunming-Montreal Global Biodiversity framework targeting protection for 30% of the world&rsquo;s oceans by 2030, the recent International Treaty on Protection of the High Seas, potential treaties on plastic pollution, and the impending introduction of the Taskforce on Nature-related Financial Disclosure, which features oceans as one of its four realms.</p>
<p>New forms of finance such as debt for nature swaps and blue bonds, to name but two, offer enormous potential to harness vast pools of capital. New technologies offer the potential to understand the oceans in ways we never have before. New industries and economies offer enormous economic potential. And all of this before we consider the environmental benefits of building a sustainable ocean economy.</p>
<p>Given the importance of oceans to the planet, we examined why all businesses and financial institutions should care about ocean sustainability, and how we should address the mismatch between the significance of ocean sustainability and the lack of attention and investment towards the issue.To do this, we first identify the key drivers of ocean health decline, grouped into three areas: over-exploitation and seascape change, climate change, and pollution.</p>
<p>Importantly, we carried out a new and granular assessment of impact materiality and revenue exposure for industries. Within the universe of 48,000 public companies that were assessed, we found that $4.3 trillion dollars (11.7% of total revenue mapped) are potentially at risk based on the impact materiality mapping by ENCORE for marine ecosystem use. If we also consider indirect revenue exposure, based on impact materiality ratings for greenhouse gas (GHG) emissions and pollution stressors, $27 trillion (63% of total revenue considered) could be indirectly at risk due to potentially negative impacts on the ocean.</p>
<p>We also completed geospatial analysis to identify potential hotspots of marine natural capital loss and finds that 67% of national waters Key Biodiversity Areas (KBAs) and 55% of high seas KBAs may be impacted by multiple economic activities and are at risk of disruption or depletion.</p>
<p>Combined, we believe that the analysis helps to demonstrate why a broader view of the ocean economy is needed to address all the drivers of ocean health decline and, through the lens of double materiality, why ocean health matters for all marine-and land-based businesses. It also demonstrates the need for more integrated ocean management and governance that considers the need to balance multiple ocean users and stressors along with ocean conservation, which the current fragmented sectoral approach to ocean governance fails to accomplish.</p>

Why Oceans Are Important <div>It is difficult to overstate the importance of a healthy ocean for our planet, society, and global economy.&nbsp;Covering 70% of the Earth&rsquo;s surface, oceans play a fundamental role in regulating the climate, the air we breathe, and the water we drink and use.</div> 

<div>It is difficult to overstate the importance of a healthy ocean for our planet, society, and global economy.&nbsp;Covering 70% of the Earth&rsquo;s surface, oceans play a fundamental role in regulating the climate, the air we breathe, and the water we drink and use.</div>

Why Oceans Are Important

UN Sustainable Development Goal (SDG) 14: Life Below Water <div>Despite the United Nations declaring 2021-30 as the Ocean Decade, UN SDG 14 is reported to be the least funded&nbsp;global goal. SDG 14 received 0.01% of all SDG funding from official development assistance up to 2019, less than&nbsp;2% of support from the Green Climate Fund (GCF), and only 3.3% of use of proceeds from sustainable bonds went&nbsp;to SDG 14 in 2021. Only 7% of global marine conservation funding in 2019 came from private finance.</div> 

<div>Despite the United Nations declaring 2021-30 as the Ocean Decade, UN SDG 14 is reported to be the least funded&nbsp;global goal. SDG 14 received 0.01% of all SDG funding from official development assistance up to 2019, less than&nbsp;2% of support from the Green Climate Fund (GCF), and only 3.3% of use of proceeds from sustainable bonds went&nbsp;to SDG 14 in 2021. Only 7% of global marine conservation funding in 2019 came from private finance.</div>

UN Sustainable Development Goal (SDG) 14: Life Below Water

The Key Stressors of Ocean Health <div>The key drivers of ocean health decline include include over-exploitation and seascape change, climate change, and&nbsp;pollution. Fishing has had the largest impact on marine biodiversity over the past 50 years, while climate change is&nbsp;causing ocean warming, acidification, and de-oxygenation.</div>
<div>&nbsp;</div>
<div>Pollution, particularly plastics, is widely considered to be harmful to ocean biodiversity and ecosystems. Our analysis&nbsp;finds that $4.3 trillion could be at risk due to direct impact on the marine environment and $23 trillion could be&nbsp;indirectly at risk due to indirect drivers of impact such as land-based pollution and greenhouse gas (GHG) emissions.</div> 

<div>The key drivers of ocean health decline include include over-exploitation and seascape change, climate change, and&nbsp;pollution. Fishing has had the largest impact on marine biodiversity over the past 50 years, while climate change is&nbsp;causing ocean warming, acidification, and de-oxygenation.</div>
<div>&nbsp;</div>
<div>Pollution, particularly plastics, is widely considered to be harmful to ocean biodiversity and ecosystems. Our analysis&nbsp;finds that $4.3 trillion could be at risk due to direct impact on the marine environment and $23 trillion could be&nbsp;indirectly at risk due to indirect drivers of impact such as land-based pollution and greenhouse gas (GHG) emissions.</div>

The Key Stressors of Ocean Health

Opportunities for Businesses and Financial Institutions <div>Building ocean literacy across the broader public, private, and finance communities can help break down the many siloes&nbsp;when it comes to ocean action and build innovative partnerships, and strategies to support a healthy and productive ocean.&nbsp;Non-profits and research institutions are underutilized partners in ocean action. All organizations can consider how ocean&nbsp;health can be integrated into strategies and action for climate change and biodiversity loss.</div> 

<div>Building ocean literacy across the broader public, private, and finance communities can help break down the many siloes&nbsp;when it comes to ocean action and build innovative partnerships, and strategies to support a healthy and productive ocean.&nbsp;Non-profits and research institutions are underutilized partners in ocean action. All organizations can consider how ocean&nbsp;health can be integrated into strategies and action for climate change and biodiversity loss.</div>

Opportunities for Businesses and Financial Institutions

Why Oceans Are Important <div>It is difficult to overstate the importance of a healthy ocean for our planet, society, and global economy.&nbsp;Covering 70% of the Earth&rsquo;s surface, oceans play a fundamental role in regulating the climate, the air we breathe, and the water we drink and use.</div>  UN Sustainable Development Goal (SDG) 14: Life Below Water <div>Despite the United Nations declaring 2021-30 as the Ocean Decade, UN SDG 14 is reported to be the least funded&nbsp;global goal. SDG 14 received 0.01% of all SDG funding from official development assistance up to 2019, less than&nbsp;2% of support from the Green Climate Fund (GCF), and only 3.3% of use of proceeds from sustainable bonds went&nbsp;to SDG 14 in 2021. Only 7% of global marine conservation funding in 2019 came from private finance.</div>  The Key Stressors of Ocean Health <div>The key drivers of ocean health decline include include over-exploitation and seascape change, climate change, and&nbsp;pollution. Fishing has had the largest impact on marine biodiversity over the past 50 years, while climate change is&nbsp;causing ocean warming, acidification, and de-oxygenation.</div>
<div>&nbsp;</div>
<div>Pollution, particularly plastics, is widely considered to be harmful to ocean biodiversity and ecosystems. Our analysis&nbsp;finds that $4.3 trillion could be at risk due to direct impact on the marine environment and $23 trillion could be&nbsp;indirectly at risk due to indirect drivers of impact such as land-based pollution and greenhouse gas (GHG) emissions.</div>  Opportunities for Businesses and Financial Institutions <div>Building ocean literacy across the broader public, private, and finance communities can help break down the many siloes&nbsp;when it comes to ocean action and build innovative partnerships, and strategies to support a healthy and productive ocean.&nbsp;Non-profits and research institutions are underutilized partners in ocean action. All organizations can consider how ocean&nbsp;health can be integrated into strategies and action for climate change and biodiversity loss.</div> 

Combined, we believe that the analysis helps to demonstrate why a broader view of the ocean economy is needed to address all the drivers of ocean health decline and, through the lens of double materiality, why ocean health matters for all marine-and land-based businesses. It also demonstrates the need for more integrated ocean management and governance that considers the need to balance multiple ocean users and stressors along with ocean conservation, which the current fragmented sectoral approach to ocean governance fails to accomplish.

Charting a Prosperous Blue Future from Risk to Resilience

Healthy oceans are important for our planet, society, and the global economy. As such, ocean sustainability requires increased attention and action from businesses and financial institutions and a more integrated approach across climate change, biodiversity and ocean health. Almost all industries contribute to ocean health decline through stressors including climate change, pollution, and land/sea use change and direct exploitation. The report serves as a primer on the business case for ocean action and engagement. 

Sustainable Ocean Economy

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