Blue Economy Financing: Sustainable Aquaculture in Indonesia

Dhoya Safira Tresna Lestari; Setiyo Purwanto

doi:10.35877/454RI.qems3991

Dhoya Safira Tresna Lestari Faculty of Economy Business, Universitas Paramadina, Jakarta, Indonesia (ID)
Setiyo Purwanto Faculty of Business and Social Science, Universitas Dian Nusantara, Jakarta, Indonesia (ID)

https://doi.org/10.35877/454RI.qems3991

Keywords: Blue Economy Financing, ESG, Sustainable Aquaculture, Aquaculture, Sustainable Financing.

Viewed = 0 time(s)

Abstract

The aquaculture sector is a strategic component in Indonesia's marine development, but its sustainability faces serious challenges such as environmental degradation, limited access to finance, and low adoption of environmentally friendly practices. This study aims to analyze the influence of Blue Economy Financing (BEF) on Sustainable Aquaculture (SA), considering the mediating role of environmental, social and governance (ESG) factors. The study uses an explanatory quantitative approach using the Partial Least Squares–Structural Equation Modelling (PLS-SEM) method, based on sample data of 120 seaweed farmers in the coastal area of South Sulawesi. The results of this study show that BEF strongly supports the sustainability of sustainable aquaculture. However, ESG mediation has no effect on increasing the role of BEP in the development of SA. Although the model has adequate predictive capabilities for sustainability, the influence of BEF on ESG is not strong enough to explain and convince the public, investors and the government for the development of SA. To optimize the role of ESG as a catalyst for sustainability, supporting strategies such as institutional strengthening, technological innovation, and integrated policy interventions are needed. This research confirms that BEF is an important instrument in encouraging sustainability transformation in the aquaculture sector. These findings provide practical implications for the development of a more adaptive blue financing scheme in supporting Indonesia's sustainable marine development agenda.

References

Avramov, D., Cheng, S., Lioui, A., & Tarelli, A. (n.d.). Sustainable Investing with ESG Rating Uncertainty * Sustainable Investing with ESG Rating Uncertainty.
Brundtland Report. (1987). Report of the World Commission on Environment and Development: Our Common Future Towards Sustainable Development 2. Part II. Common Challenges Population and Human Resources 4.
Choudhary, P., G, V. S., Khade, M., Savant, S., Musale, A., G, R. K. K., Chelliah, M. S., & Dasgupta, S. (2021). Empowering blue economy: From underrated ecosystem to sustainable industry. In Journal of Environmental Management (Vol. 291). Academic Press. https://doi.org/10.1016/j.jenvman.2021.112697
Coleton, A., Font Brucart, M., Gutierrez, P., Le Tennier, F., & Moor, C. (2020). SUSTAINABLE FINANCE MARKET PRACTICES. https://ssrn.com/abstract=3749454
Cunha, F. A. F. de S., Meira, E., & Orsato, R. J. (2021). Sustainable finance and investment: Review and research agenda. Business Strategy and the Environment, 30(8), 3821–3838. https://doi.org/10.1002/bse.2842
Food and Agriculture Organization. (2024). Aquaculture growth potential in Indonesia WAPI factsheet to facilitate evidence-based policy-making and sector management in aquaculture.
Food and Agriculture Organization of the United Nations Rome (FAO, 2024). (2024). The State of World Fisheries and Aquaculture 2024. In The State of World Fisheries and Aquaculture 2024. FAO. https://doi.org/10.4060/cd0683en
Hair, J. F. ., Hult, G. T. M. ., Ringle, C. M. ., & Sarstedt, Marko. (2017). A primer on partial least squares structural equation modeling (PLS-SEM). Sage.
Irawan, et. al. (2024). Henky Irawan. https://www.researchgate.net/publication/386080460
Katharine Thoday, et. al. (2023). Bonds to Finance the Sustainable Blue Economy. https://doi.org/10.22617/TCS230328-2
KKP. (2024). 2024-akuntabilitas-kinerja-67dbca8145e712025.02.28 LKJ KKP TAHUN 2024 Final.
Klerk, E. (2023). Special Report-Sustainability & ESG. https://research.sc.com
Kusumawardhani et al. (2023). Peluang dan Tantangan Blue Economy Indonesia. www.puskajianggaran.dpr.go.id
Riany, C. F., Partelow, S., & Nagel, B. (2023). Governance challenges for Indonesian pond aquaculture: a case study of milkfish production in Gresik. Frontiers in Aquaculture, 2. https://doi.org/10.3389/faquc.2023.1254593
Shiiba, N., Wu, H. H., Huang, M. C., & Tanaka, H. (2022). How blue financing can sustain ocean conservation and development: A proposed conceptual framework for blue financing mechanism. Marine Policy, 139. https://doi.org/10.1016/j.marpol.2021.104575
Sri Yanti, S. J., Yusuf, G., Wagey, T., Rodrigues Aquino, A., Brennier Authors Christy Desta Pratama, A., Wanta, D., Inamdar, N., Adeyemi Aromokeye, D., Ekaputra, E., Hari Putra, J., Marie Jean Joseph Gosselin, B., & Bar, R. (2022). 2 Indonesia Blue Finance Policy Note INDONESIA BLUE FINANCE POLICY NOTE © 2022 Indonesia Climate Change Trust Fund (ICCTF) & Ministry of National Development Planning/ National Development Planning Agency (Bappenas) with support of The World Bank.
Sumaila, U. R., Walsh, M., Hoareau, K., Cox, A., Teh, L., Abdallah, P., Akpalu, W., Anna, Z., Benzaken, D., Crona, B., Fitzgerald, T., Heaps, L., Issifu, I., Karousakis, K., Lange, G. M., Leland, A., Miller, D., Sack, K., Shahnaz, D., … Zhang, J. (2021). Financing a sustainable ocean economy. In Nature Communications (Vol. 12, Issue 1). Nature Research. https://doi.org/10.1038/s41467-021-23168-y
Walsh, M. (2018). Finance for Pacific Ocean Governance. www.pacificoceanfinance.org
Wenhai, L., Cusack, C., Baker, M., Tao, W., Mingbao, C., Paige, K., Xiaofan, Z., Levin, L., Escobar, E., Amon, D., Yue, Y., Reitz, A., Sepp Neves, A. A., O’Rourke, E., Mannarini, G., Pearlman, J., Tinker, J., Horsburgh, K. J., Lehodey, P., … Yufeng, Y. (2019). Successful blue economy examples with an emphasis on international perspectives. In Frontiers in Marine Science (Vol. 6, Issue JUN). Frontiers Media S.A. https://doi.org/10.3389/fmars.2019.00261
World Bank. (2023). World Bank.