Josephine Graf: Unlocking nature-positive outcomes under water

Coral reefs are called the “rainforests of the sea” because of their astonishing richness of life. Whilst they cover less than 0.1% of the Earth’s surface, they provide a home for more than a quarter of marine life.

Reefs are probably the most biologically diverse ecosystem and the largest carbon sink on our planet, and they contribute to climate resilience through breaking waves and protecting coastlines.

Putting a price on coral reefs and on nature in general is challenging because of the complexity of their benefits. Coral reefs provide homes, food, and coastal protection for animals and humans. They support fisheries and generate income from tourism. The UN estimates that the services of coral reefs are worth hundreds of billions of dollars annually. We are regularly monitoring our reefs, which allow us to measure their impact on biodiversity developments.

Our goal for this year is to develop a first prototype of a transparently measured biodiversity unit for coral reefs that unlocks financial investment into nature-positive outcomes.

We have lost half of our coral reefs since 1950 and this number is expected to rise to over 90% by 2050. Climate change is certainly the biggest threat. Ocean heatwaves cause coral bleaching—a phenomenon where corals expel the algae living in their tissues, causing them to turn white, and, eventually, die. Or ocean acidification—due to it absorbing excess CO₂—which hinders corals from forming their calcium carbonate skeletons. Additionally, overfishing, pollution, and coastline construction pose great risks to coral reefs.

One of the most effective solutions are so-called Marine Protected Areas, designated areas which are protected and managed for the long-term conservation of marine life.

It starts with educating ourselves and being more mindful about out actions. We are not separate from nature but highly dependent on healthy ecosystems. An easy step to protect coral reefs when in the ocean is to use physical UV-filter sunscreens as opposed to the chemical ones. It has been proven that chemicals such as oxybenzone are detrimental to coral health and cause coral bleaching. Another example is being mindful when eating fish, considering that overfishing is one of the biggest threats to coral reefs.

We conduct assessments to evaluate the health status of coral reefs. Our main goal is to build our reefs where reef habitat has been lost (see pictures). We consider the topography of the seabed and make sure that living coral exist nearby, because we focus on natural recruitment of coral offspring carried by currents.

Our hypothesis is that today’s coral offspring is better adapted to current climatic conditions since their parents have most likely survived heatwaves—natural selection in action.

We scientifically monitor our reefs usually every six months. This includes fish counts, coral recruit counts, other visual data, as well as genetic data, so-called environmental DNA. This allows us to get a thorough understanding of the biodiversity development from day one. Our pilot reef in San Andrés is now three years old. After three months, the fish diversity was already at a similar level to natural reefs close by. After eight months, we had the first coral recruits settling and that number has more than tripled between the first and second year.

Currently, we are analyzing the latest monitoring data after the recent devastating heatwave in the Caribbean. We luckily already know that most baby corals on our reef survived.

We also focus on the social impact of our restoration projects by engaging with local communities, such as fisher families, ensuring their involvement. We monitor how our initiatives benefit their livelihoods and well-being. This not only helps to protect the reefs, but also contributes to the resilience and development of coastal communities.

We are a for-profit company and I often say our business is similar to planting trees in a forest but doing this underwater. Our business model centers around offering reef regeneration projects tailored to the needs of our clients. We monetize our projects by selling the modular reef systems and ongoing service subscriptions, providing data analysis, reporting about the reef’s biodiversity, and storytelling assets. We are currently focusing on companies that are looking to invest in nature. So far, we have customers from very different industries such as insurance, tourism, and food. By speaking to these companies, we are noticing that the topic of biodiversity and ESG reporting in general is becoming more important.

Impact investing was crucial to raise our first financing round in early 2024. Our investors are mainly impact-driven angel investors, and many of them have supported us for a long time. The fact that the metrics applied by the financial industry still primarily reflect financial gains and not the importance of positive social and environmental impact makes it harder for larger investors. Hopefully, more attention will come with innovative financing approaches such as the Global Fund for Coral Reefs—a blended finance mechanism leveraging grants and other instruments that ensure return-based investments into coral reef conservation.

One of our biggest challenge lies in demonstrating that our business model works. This entails generating enough sales and accelerating our sales pipeline. We are currently in the go-to-market phase where we bring our service to the market and figure out how to drive demand. We have first pilot customers paying for our reef regeneration packages, and we have implemented four projects this year alone.

To reach our mission to regenerate 1% of coral reefs protecting coastlines in the next ten years, we must triple our impact every year.

Our founding team consists of four women with very different backgrounds. Among us are two biologists, an artist, and me with a business degree. This interdisciplinary team dynamic allows us to approach challenges from multiple perspectives. For example, Marie, the artist is such a creative problem-solver. Ulrike and Hanna are very rigorous; everything we do has to be supported by science. I often provide the “reality check,” reminding our team to focus on our business model. This diverse skillset, coupled with our passion for the ocean, has certainly been pivotal for driving our mission forward.

The interviewee is external to UBS and the answers provided do not necessarily reflect UBS’s view.

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