The Role of the Financial Sector in Fostering Sustainable Blue Economy

By: Nyerhovwo Kingsley Erakpotobor, Peter Akpoyomare Ekurume

Pages: 206–229, Volume: 2, Number: 2

Published by: AEFUNAI Journal of Economics, Finance and Development Studies, Alex Ekwueme Federal University, Ndufu-Alike, 9/1/2025, 2025

ISSN (Electronic): 2536-6742

DOI: 10.48028/iiprds/aefunaijefds.v2.i2.11

The Role of the Financial Sector in Fostering Sustainable Blue Economy

Abstract:

This study examines the financial sector’s role in fostering a sustainable blue economy through the integration of Environmental, Social, and Governance (ESG) principles into investment and credit decisions. Anchored in Sustainable Finance Theory, it explains how financial institutions promote sustainability by deploying instruments such as blue bonds, impact investing, sustainable insurance, and ESG-aligned credit mechanisms. A library-based qualitative methodology is adopted, relying on secondary data from academic journals, policy reports, books, and financial sector publications. In total, 77 research papers were thematically analyzed to identify recurring patterns, theoretical insights, and policy implications. Although secondary data may limit contextual evidence, triangulating information across reputable sources strengthened validity. Findings reveal that financial institutions are central to advancing blue finance through innovations such as blue bonds for marine conservation, catastrophe bonds for climate resilience, and sustainability-linked loans for maritime industries. Financial centers also facilitate low-carbon shipping, biodiversity conservation, and aquaculture development. However, the study identifies a persistent gap in how developing economies engage with blue finance compared to developed countries. Constraints such as limited access to capital, weak regulatory systems, and high investment risks hinder effective participation. The study concludes that closing this gap requires enhanced regulatory incentives, institutional capacity-building, and stronger international cooperation. By synthesizing existing knowledge, the research contributes both academic value and policy relevance, providing guidance for aligning blue economy growth with ocean sustainability through effective financial frameworks.

Keywords: Sustainable Blue Economy, Financial sector, Marine resources, Sustainable development, Ocean governance