Of particular interest is EKO's role in the partnership. The investment firm will design opportunities for investors to fund schemes that reward fishermen (and industrial fleets) for implementing changes, and earn shares of the returns that hopefully come about from those changes.
EKO works in the burgeoning field of "impact investing"—also known as socially responsible investing or "philanthrocapitalism." This type of investing has been put to work against social problems—think Kiva, the Acumen Fund, Ashoka—but hasn't been applied to conservation issues with the same fervor. "I think it's still a relatively young, immature market," EKO co-founder Jason Scott said in an interview.
"The most interesting thing to us is how you develop funds and find transactions that cross a range of risk and return and impact spectrums," said Scott. Some investors care most about high impact, and are willing to take higher risks and generate lower returns in exchange. Others "want exactly the same [return] that they'd get out of a commercial or public equity or private equity deal, and then there's a ton of space in between."
I asked him where Bloomberg fits on that spectrum. "We don't know yet," he said, emphasizing that EKO plans to identify a handful of different opportunities for investing in fisheries in Brazil, Chile, and the Philippines.
The first time Scott looked at a graph depicting the recovery of a fishery, he said, out loud, "That looks like a J-curve"—something he recognized from his career in private equity. So he had a classic if-true-then-wow moment: "I said, 'if the science behind that is true, then this is a really attractive investment'."
Unlike gold or oil, according to Scott, "fisheries are a naturally renewing resource that, if properly managed, will provide income, livelihoods, and health benefits to local communities." Given those benefits, Scott figured that it must be possible to design a "really interesting investment vehicle" around this. He's about to find out, thanks to the Bloomberg grant. "We're not committing a thousand percent to saying that it's true, but the data would indicate that you should be able to create a long-term sustainable investment with attractive returns." It's a pilot project—one that Bloomberg Philanthropies is betting big on.
Antha Williams, who leads the foundation's environmental programs, said that's just Bloomberg's style: "Once we're persuaded that a strategy is going to be effective, we go in really big." Another hallmark of the Bloomberg approach is scalability. The Vibrant Oceans Initiative is starting with just three countries, which—while very important on their own, said Williams—are only responsible for 7 percent of global marine catch. But this unique integration of policy reform, on-the-ground community engagement, and impact investing has never been applied to fisheries before. Only after modeling and tweaking the approach in these three countries will we be able to prove that it works, explained Williams. After that, Bloomberg, Oceana, Rare, and EKO can work with other groups and other investors to expand the reform across the ocean.