India has set an ambitious target of creating a carbon sink of 2.5-3 billion tonnes by 2030, which requires an estimated commitment of US$ 15 billion per year.  This poses both a formidable challenge and a unique opportunity for the private sector.  India’s 5,000 sq km of mangrove ecosystems support rich biodiversity, extend protection against natural calamities like cyclones, storm surges, tsunamis, floods, etc., and act as a powerful carbon sink. Thus, investing in the preservation of mangroves makes economic, environmental, and ethical sense. Corporate players, especially those present in the vicinity of India’s extensive coastline, should actively participate in strategic initiatives that enhance their own resilience while promoting the livelihoods of local citizens and contributing to India’s net-zero 2070 ambition.

Reinforcing Financial Resources for India’s Coastal Guardians 

As net-zero targets inch closer, private sector players are expanding their horizons to consider non-conventional mechanisms for offsetting carbon. Mangrove conservation can emerge as one versatile element of core corporate resilience. Companies with considerable littoral infrastructure—ports, industrial units, or tourism facilities—can directly invest in large-scale mangrove restoration. This nature-based enhancement reduces their vulnerability to extreme climate events.

Companies with considerable littoral infrastructure—ports, industrial units, or tourism facilities—can directly invest in large-scale mangrove restoration.

Such interventions are quantifiable and time-bound. Here, banks and insurance companies can emerge as natural partners, as such risk reduction projects can translate into higher safety attributes, leading to lower risk exposure of their lending/insured portfolio. They can also help in the creation of various parametric insurance products. By design, such instruments ensure pre-agreed and faster payouts compared to traditional insurance policies. This is because verification of whether the trigger event has passed the threshold intensity specified in the policy is easier. Such robust financial safety nets and payouts for recovery are well-suited for boosting further investments in such locations, improving their business opportunities and sustainable development practices. Such models reframe mangrove conservation as a strategic investment in asset protection rather than an operational expense.

To improve multi-stakeholder engagement with local communities, value-chain partners and governments, recognition of contributions through ‘Blue Carbon Championship’ awards can be considered. This can help crowd-in corporate social responsibility funds, voluntary contributions and philanthropic donations, while contributing to ESG compliance and positive brand positioning. Mangroves are great areas of carbon sequestration. Moreover, as global carbon markets evolve, the ‘blue carbon credits’ accrued can be traded at a premium.

Cultivating Dividends: Mangrove to Market

The socio-economic and environmental value of mangroves extends significantly beyond their protective role. They offer a fertile ground for innovation in sustainable enterprise. Corporations active in pharmaceuticals, biotechnology, agriculture, and food can launch innovative pilot projects that promote the sustainable development of mangroves using circular economy principles. Such pilot projects can involve the strategic participation of global experts in research and technology to identify, harvest, and introduce novel products sourced from these ecosystems to markets.

Corporations active in pharmaceuticals, biotechnology, agriculture, and food can launch innovative pilot projects that promote the sustainable development of mangroves using circular economy principles.

From novel, high-salt-tolerant plant varieties capable of boosting coastal agriculture, to crafting sustainable artisanal goods and developing nature-based formulas for medicinal and cosmetic use cases, several commercially viable livelihood opportunities can be explored. Creating mutually acceptable benefit-sharing models with local communities, who have traditionally preserved these natural ecosystems, can unlock significant private capital for mangrove development. Such a ‘mangrove to market’ approach can link corporates with sustainable and ethical supply chains while promoting a symbiotic ecosystem that upholds shared prosperity.

Spearheading Innovation for Mangrove Regeneration

India’s technological prowess can push the frontiers of mangrove regeneration and preservation outcomes. Its capabilities in satellite-based weather monitoring and remote sensing, drone technologies, and artificial intelligence/machine learning based IT platforms can be leveraged for suitably and precisely identifying locations in India’s mainland and islands for mangrove regeneration efforts. Starting with coastal site preparation, seeding, and providing necessary growth ingredients, supporting sustainable and managed growth phases, harvesting, and tracing the source of products to accounting and certifying the quantity and quality of blue carbon, India can create new paradigms for the world. It can provide platforms for corporations, start-ups, academia, and research laboratories to collaborate on technology development, source finances, and provide inputs for policy creation in this vital domain.

Starting with coastal site preparation, seeding, and providing necessary growth ingredients, supporting sustainable and managed growth phases, harvesting, and tracing the source of products to accounting and certifying the quantity and quality of blue carbon, India can create new paradigms for the world.

Along with government initiatives like Integrated Mangrove Fishery Farming System (IMFFS), Mangrove Afforestation Projects, MISHTI (Mangrove Initiative for Shoreline Habitats & Tangible Incomes), blended finance instruments can be crafted with the participation of multilateral institutions and India’s highly evolved and hugely popular JAM trinity-based fintech ecosystems. First-loss guarantees, debt-for-nature swaps, and impact bonds can help de-risk potential investments and attract increasingly larger pools of entrepreneurial capital for creating sustainable mangrove-based local economies. Such financing instruments can have built-in agility to meet the unique needs of a particular geography, time and community.

A WWF Vision case study suggests that in the Sundarbans eco-region alone, relatively minor investments towards mangrove regeneration, skill development, sustainable housing, etc., done now can yield disproportionately high benefits by the end of this century. The government create platforms that connect potential financiers, such as corporations, investors, and development finance institutions, with community-led mangrove restoration projects. These platforms can facilitate direct investment in projects, fostering partnerships and ensuring sustainable funding streams for mangrove conservation efforts. These efforts not only contribute to climate change mitigation but also promote sustainable development and resilience in coastal regions.

Labanya Prakash Jena is Director, Climate and Sustainability Initiative, and Visiting Senior Fellow, London School of Economics and Political Science; Prasad Ashok Thakur is an alumnus of IIT Bombay and IIM Ahmedabad. Views expressed are personal. 

Originally published in Observer Research Foundation (ORF) Online.