In this month’s newsletter we hear from impact partners on collaborative efforts to protect our oceans, as The Center for the Oceanic Awareness Research and Education (COARE) discusses shark protection and a global plastics treaty, while the directors of impact documentary Sequoias of the Sea detail the importance of California’s kelp forests. We also invite you to our online event on World Oceans Day!

Note: The views and opinions expressed in this newsletter are those of the authors and do not necessarily reflect the official policy or position of Newday Impact. Any content provided by our authors is of their opinion and is not intended to malign any religion, ethnic group, club, organization, company, individual, or anyone or anything.

Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Past performance does not guarantee future performance.

THIS MONTH’S NEWSLETTER:

CEO COMMENTARY

As We Approach World Oceans Day

June 8th marks the 32nd anniversary of World Ocean Day. In keeping with Newday’s mission to leverage the power of the markets to protect our world’s most valuable ecosystems, we have expanded our efforts to raise visibility for the importance of ocean health and the massive shortfall in spending on the blue economy. 

On March 6th Newday hosted a virtual event entitled “How Saving Krill Could Help Save the Planet”. The session included an all-star team of experts from Intentional Futures, Ocean Power Technologies, EarthEcho International, Ocean Exchange, and the US State Department’s Office of Ocean and Polar Affairs.

We were also honored to be a part of the 21st Annual Ocean Film Festival’s panel on “Demystifying Blue Carbon and the Blue Economy”. Moderated by Ted Janulis from Investable Oceans, we were joined by Maria Brown from NOAA and Jayda Guy, the Grammy-nominated Music Producer and Director of the documentary Blue Carbon.

Two days before World Oceans Day, we will be hosting our next virtual educational event entitled, “Blueprints for Coastal Adaptation” with an expanded set of partners including Christopher Chin, Executive Director at COARE, Chris Oakes, CEO of ReefGen, David Randle, Managing Director of the Blue Community Consortium, Carter Henne, managing Biologist from Sea and Shoreline, Natahsa Benjamin, Filmmaker, and Maria Brown, Superintendent of Greater Farallones and Cordell Bank National Marine Sanctuaries at NOAA. The event will be key-noted by Ashlan Cousteau.

Register for the event here.

In partnership with some of the most effective and innovative NGOs, tech firms, foundations and agencies, Newday is building market-based solutions that harness the power of capital to support nature-based strategies to restore and protect our coastal environments. Newdayʼs Coastal Restoration and Resilience Program is one of two programs in our Ocean Health Campaign also tied to the award winning Newday Ocean Health ETF, AHOY. The other component is focused on the deep oceans through the Krill-Free Forever Program discussed in our last publication. The two programs are designed to work together recognizing the vital importance of the health of both the deep oceans, and of the ecosystems and communities where they meet the land. Like the Krill-Free Forever Program, the Coastal Program focuses on key species whose health and sustainability have an outsized impact on the health of the overall ocean ecosystem. For our coastlines—worldwide—those species are seagrass, kelp, and coral.

Our coastlines are bearing the brunt of many of the most damaging effects of climate change. Higher sea levels, warmer oceans and intensifying storms are hitting coastal communities and ecosystems especially hard, causing economic hardship and ecological havoc. Pollution, overfishing and irresponsible development are compounding the damage wrought by climate change, creating an interconnected web of stress on coastal environments and populations.

The challenge is immense, but there are solutions to restore the natural infrastructure to protect communities, foster wildlife, and sequester carbon. With a rigorous focus on the critical pillars of air, water, soil, biodiversity, and carbon,Newday has created the Coastal Restoration and Resilience Program, which will invest in key coastal ecosystems such as mangrove forests, salt marshes, seagrass meadows, shellfish beds, kelp forests and coral reefs. The program will also assist coastal communities in becoming more sustainable.

A key part of this and other ecological solutions is investment. The funding needed for achieving Sustainable Development Goal 14, “Life Below Water, is estimated to be approximately $175 billion per year. Current estimated expenditures are approximately $25 billion, leaving a $150 billion shortfall. 

Newday Impact and our partners are helping bridge the underfunded gap in blue finance, critically important in supporting the blue economy’s massive global significance that amounts to an estimated value of $25 trillion generating $2.5 trillion of annual value from produced goods and services. 

Investing in these solutions is really quite simple: Newday has developed a range of portfolios focused on companies whose businesses have a positive impact on our oceans and coastal health that aim to generate market-rate returns. Investors in Newdayʼs portfolios have the option to direct a portion of their investment returns to the Coastal Restoration and Resilience Program. Newday also donates up to 15% of its management fee to the program.

Anchored by the Newday Ocean Health Portfolios, the structure creates a virtuous circle of impact. Revenues generated from the investment portfolio support the Coastal Restoration and Resilience Program, as well as providing returns to investors, which can also be reinvested in the Coastal Program. 

Newday doesnʼt just invest for impact, we create it. Through our work with our impact partners we have access to a unique network of domain experts who help us ensure our investorsʼ capital is deployed in areas where it can have the greatest impact outcomes.

More than that, though, our most influential impact partners help amplify our efforts to promote positive change in behavior by companies and individuals. 

Please join us for our World Oceans Day event on June 6th and more information about our award winning AHOY ETF can be found at www.newdayimpactetfs.com

Leading the Charge: COARE’s Fight for Shark Protection and a Global Plastics Treaty

Written by: The Center for the Oceanic Awareness Research and Education (COARE)

From the moment he locked eyes with a shark, he was never the same. Christopher Chin had been an avid scuba instructor and technical diver for years, but this powerful interaction inspired him to become an advocate for shark protection and ocean conservation. With its initial focus and central mission on Shark Protection and Conservation, Christopher established The Center for Oceanic Awareness, Research, and Education in 2006. Since then, he continues to serve as its Executive Director, and has remained committed to affect change across communities, regions, and nations.

How does a scuba diver end up addressing the United Nations? Soon after establishment, COARE became one of North America’s foremost experts in shark fin policy, having authored, supported, and defended a multitude of laws affecting ocean health and resources. COARE applied its skills to the ever-increasing epidemic of plastic pollution, working on local, State, and Federal policies, and was among the first organizations to call for global collaboration to address the issue. As an internationally recognized leader in ocean policy and conservation issues, COARE has addressed the United Nations on several occasions.

COARE’s focus in recent years has been the development of a global plastics treaty that will protect human, animal, and environmental health. COARE has worked diligently for many years to persuade other organizational and governmental leaders of the need for a global treaty to address plastic pollution; and the first significant hurdle was for the world’s nations to agree on the need for such an instrument.

In March 2022, COARE was a key leader at the fifth United Nations Environment Assembly (UNEA-5.2) in Nairobi, headquarters of the United Nations Environment Programme (UNEP). UNEA is the world’s highest-level decision-making body on the environment and made history with a unanimous vote to develop a new global plastics treaty. Inger Andersen, Executive Director of the UN Environment Program, called the endorsement by representatives of 175 member counties “the most significant global environmental governance decision since the Paris (Climate) Agreement in 2015.”

The resolution received global media coverage in  The New York Times, The Guardian, Reuters, and Forbes, among others.

Christopher delivered the closing statement on behalf of all Civil Society at the High-Level Closing Ceremony of the Special Session to commemorate the 50th Anniversary of the UN Environment Programme. In his statement, Christopher remarked, “We can no longer continue to put profit before the planet. We can no longer continue to put profit before people. No one’s convenience and no one’s paycheck is more important than the health and resilience of our environment.” 

In 2023, Christopher, as COARE’s Executive Director, was elected to the position of co-facilitator of the UN Environment NGO Major Group by more than 2,000 Non-Governmental Organizations around the world.  COARE continues to represent NGOs everywhere in the fight against plastic pollution, and Conflict of Interest and obstruction in the negotiation process.

At the most recent meeting of the Plastics Treaty Intergovernmental Negotiating Committee (INC), Christopher delivered an opening statement on behalf of all NGOs not only emphasizing the urgency of the committee’s work, but calling for everyone to move past intentional and deliberate attempts to block progress by parties who have vested interest in maintaining the status quo.  His statement was so well received, that its delivery was interrupted by applause.

COARE is a tiny but mighty organization that runs leanly.  We pride ourselves on our thought leadership and action. Poised for growth, we’re ready and capable to make an even greater impact. With funding for general and operational support and capacity building, we welcome your generosity in supporting our shared mission to protect the health of our people and planet.  Please visit coare.org/give to join us with your contribution.

The Disappearing Sequoias of the Sea: A Fight to Save California’s Kelp Forests

Written by: Natasha Benjamin and Ana Blanco, Co-directors of Sequoias of the Sea

California’s kelp forests, once vibrant underwater landscapes teeming with life, have vanished along much of the Northern California coast. These underwater giants, likened to the sequoias of the sea, are succumbing to a warming climate. Kelp forests cover almost a quarter of the world’s coastlines and are capable of drawing more carbon from our atmosphere than terrestrial forests and act as a major climate mitigator. 

But this species is in trouble. Along the 350 mile stretch of coastline from San Francisco to the Oregon Border we have lost a striking 95% of these kelp forests. Due to a perfect storm of warming ocean temperatures, the loss of keystone predators and the explosion of purple urchins, we are witnessing an ecological disaster in real time in one of the most highly managed and protected waters in the world. This is having impacts on coastal communities, divers, tribes and many others that depend on this resource for their livelihood, recreation and tradition.

The culprit? A 2014 marine heat wave that disrupted the delicate ocean balance. This “blob” of warm water weakens the kelp, which thrives in cool, nutrient-rich conditions. Warmer waters also fueled a disease that devastated sea stars along the entire west coast and now the sunflower sea star, the main predator of the purple urchins, is critically endangered. The disease, known as sea star wasting syndrome, melts the bodies of what we used to call starfish, including the many-armed sunflower sea star. This sea star had become the principal urchin predator, replacing sea otters, whose numbers plummeted over the last two centuries, victims of the fur trade and the depletion of their habitat. With these predators gone, purple urchins feast on the kelp, leaving behind barren seascapes.

Kelp forests are underwater havens, teeming with life from tiny fish to majestic sharks. These underwater forests provide critical habitat for over 1,000 species, absorb more carbon than land-based forests, and shield coastlines from storms. The loss is devastating. Their disappearance threatens not just the ecosystem, but also coastal communities that rely on fishing, tourism, and traditional harvesting practices.

The epicenter of this collapse is along the Mendocino coast in Northern California. Fort Bragg, the small coastal city has a history of loss, with the boom and bust of the timber industry and the shutdown of the Georgia Pacific Mill, the town’s largest employer, in 2002. This was followed by the decline of wild salmon and now the kelp dependent commercial urchin fishery and recreational abalone diving that, alone, pumped $40 million a year into the local economy. With the last remaining dive shop in Fort Bragg now closed, this community has been among the hardest hit by environmental degradation, loss of marine habitat and climate change.

The warming climate has set in motion this disaster and it is unclear whether it can be reversed as greenhouse gas emissions continue to flood the atmosphere. Energy-related carbon dioxide emissions rose by 6 percent globally in 2021, the biggest increase ever, as the world began bouncing back from the pandemic. These kelp forests are yet another ocean casualty of fossil-fueled climate disruption, along with habitats ruined by coral bleaching, rising sea levels, warming ocean waters and the pronounced loss of Arctic Sea ice.

Scientists, fishermen, and conservationists are collaborating on solutions. Divers are removing urchins and planting new kelp. However, the future is uncertain. Even with restoration efforts, the ocean needs to cool down for kelp to thrive. As global warming intensifies, these efforts might be outpaced by a changing climate.

The future of these underwater forests hangs in the balance. The kelp’s rapid growth offers a glimmer of hope, but it’s a race against time. Unless we slow global warming, these underwater redwoods may vanish forever, leaving behind a stark reminder of the interconnectedness of our planet and the consequences of our inaction.

Recognizing the powerful impact of visual storytelling, filmmaker and marine biologist Natasha Benjamin and International Ocean Film Festival executive director Ana Blanco, teamed up to co-produce and co-direct a documentary film to tell the story of kelp. With a focus on Fort Bragg and key members of the community, the film – aptly named Sequoias of the Sea – raises awareness around the devastating impact the disappearing kelp and the climate collapse has had on the economic livelihood of local commercial urchin divers, abalone divers as well as the native tribes. The film also presents innovative, long-term solutions to mitigate the losses and to bring back the kelp. In addition to nature-based solutions, will the proposed idea of reintroducing sea otters be the solution? The documentary is scheduled for completion in December 2024.

To learn more about this climate emergency, visit the Sequoias of the Sea page.

COUNTRY GOVERNANCE RESEARCH COMMENTARY

Market Commentary

Global markets have begun to recover in May following a downturn in April.  The direction of markets this year has largely been driven by investors expectations about how soon and by how much the Federal Reserve will dial back its aggressive series of interest rate hikes.  Following a steady decline in inflation at the end of last year there was a widespread belief that starting early in 2024 the Fed would be able to rapidly cut interest rates.  Confidence that a soft landing was in sight helped push the S&P 500 to its best first quarter since 2019.  

However, the hoped-for immaculate disinflation was not to be with three consecutive above forecast CPI readings reviving concerns about sticky inflation.  With fears that inflation was settling closer to 3% instead of the Fed’s target of 2% market participants expectations moved in the opposite direction with some forecasters predicting the Fed’s next move could be further hikes.  Interest rates subsequently climbed in April with the 10-year Treasury yield briefly hitting 4.7%, the highest level since November 2023.  After rising over 10% in the first quarter, the S&P 500 fell 4.2% in April, and the Russell 2000 index of interest sensitive small cap stocks did even worse falling over 7% for the month.  

As we enter May the pendulum appears to be swinging back towards at least a start to the Fed easing before the end of the year.  The most recent print of the PCE price index came in line with expectations, which while still showing inflation above 2% at least did not provide another shock on the upside.  The statement at the conclusion of the May 1st FOMC meeting noted a lack of further progress on inflation, but Chairman Powell in his press conference said he believed additional interest rate hikes were unlikely, and he reiterated his belief that they will be able to lower rates this year.  

Further confirming the shift back towards expectations for easing, the Labor Department reported that nonfarm payrolls increased less than forecast and that the unemployment rate had ticked up slightly.  This has led to hopes for a September start to rate reductions.  However, with the market hanging on every piece of data we can expect more turns as everyone tries to discern if inflation has been quelled or if it will continue to linger.

US overcomes deadlock to approve long-stalled aid package

President Biden recently signed a $95.3 billion package of aid to Ukraine, Israel, and Taiwan after six months of congressional deadlock.  In order to overcome far right Republican opposition in the House of Representatives, Speaker Johnson broke the aid into four pieces: a measure for each of the three U.S. allies, including $60.8 billion for Ukraine, over $26 billion for Israel and humanitarian aid, and $8 billion for the Indo-Pacific region.  The fourth piece among other provisions included a requirement for TikTok owner, ByteDance, to sell the platform or face a ban in the United States.  After equivocating for months, Speaker Johnson, who had as a rank-and-file member voted against all prior aid to Ukraine, was reportedly persuaded to move forward after hearing in classified briefings that Ukraine could lose the war without the desperately needed aid.  In anticipation of the bill passing the Pentagon prepositioned supplies to begin moving immediately, rushing the first $1 billion in aid to Ukraine within hours following the President’s signature.  Importantly, the US will now provide long-range ATACMS missiles with a range of around 300 kilometers.  Ukraine has repeatedly asked for this capability but the Biden administration had so far refused citing fears of escalation.  The US will still prohibit their use on targets within Russia, but the new missiles allow Ukraine to reach anywhere within occupied Ukraine.

Implications:  The six-month delay without has led to a deterioration of Ukraine’s position on the battlefield and allowed the Russian army to slowly advance. The Russian’s are pushing to take advantage of Ukraine’s depleted forces and air defenses with renewed aerial bombardments across Ukraine.  The hope is that the resumption of aid will allow Ukraine to stabilize the situation and prevent Russia from breaking through their defenses.

Save the Date: June 6, 2024 — 12:30pm PT

Blueprints for Coastal Adaptation – World Oceans Day Roundtable Discussion

For Oceans Day 2024 we invite you to join us for our online event “Blueprints for Coastal Adaptation” on June 6 at 12:30 PM PT. Discover how we’re addressing climate change impacts on coastlines working alongside key partner Organizations with our Coastal Restoration and Resilience Program, and learn about market-based solutions that protect and restore vital ecosystems.

Hear from:
Ashlan Cousteau, Ocean Restorationist (Keynote Speaker)
Christopher Chin, Executive Director, COARE
Chris Oakes, CEO, ReefGen
Dave Randle, Managing Director, Blue Community Consortium
Carter Henne, Managing Biologist, Sea and Shoreline, LLC
Doug Heske, CEO, Newday Impact
Brian Fairhurst, Head of Business Development, Newday Impact

Agenda:
Opening Remarks by Doug Heske
Keynote Address by Ashlan Cousteau: The Importance of Coastal Restoration
Panel Discussion 1: West Coast Initiatives
Panel Discussion 2: Coastal Restoration in Florida
Closing Discussion: Investing in Nature-Based Solutions

FROM OUR SOCIAL

WATCH | World Water Day Virtual Event

In case you missed our online World Water Day event with Georgie Badiel Liberty and Intentional Futures, you can catch the recording below. We discuss how building water wells supports peace-building efforts in Burkina Faso, and how market-based clean water solutions represent a key opportunity to investors focused on making a direct impact on water conservation and sanitation programs.

Watch the recording here.