The New Business Model Saving Coral Reefs with Nicolas Pascal

Discover how Blue Alliance transforms marine protected areas by blending coral conservation with social enterprise to build a thriving blue economy.

Episode Resources:

• Official Website for Blue Alliance
• Blue Alliance Case Study on Marine Protected Areas
• Turneffe Atoll Marine Reserve Official Site

What if the secret to saving the world's dying coral reefs isn't just better science, but better business? In this episode of the 4Nature Podcast, marine ecologist and former investment banker Nicolas Pascal breaks down how his organization, Blue Alliance, is actively regenerating millions of hectares of ocean ecosystems. Tune in to discover how blending long-term government partnerships with sustainable social enterprises can transform failing conservation zones into thriving marine sanctuaries that also lift local fishing communities out of poverty.

Nicolas shares the harsh reality that over 70% of global marine protected areas (MPAs) are simply "paper parks" lacking the real enforcement and funding needed to survive. To combat this, he reveals Blue Alliance’s pioneering marine co-management model: a system where non-profit conservation efforts are directly funded by profitable, community-integrated businesses in ecotourism and sustainable aquaculture. He explores the fascinating tension of building a blue economy and explains why it’s often easier to teach corporate professionals about coral reef conservation than it is to teach NGOs how to run a profitable business. But can this innovative "IKEA model" of conservation truly scale to protect 70 million hectares of ocean, or will the tragedy of the commons ultimately prevail?

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Transcript

Introduction and Background

David Meyers: Welcome to another episode of 4Nature Podcast. We're thrilled to have Nicolas Pascal on this episode. Nicolas is an expert in finance and marine science. He's led over 15 initiatives related to marine conservation in more than 15 countries. 

Nicolas holds a PhD on coral reef ecology and has been an investment director for private companies for 10 years. He is an executive director right now and founder of Blue Alliance, a social enterprise that's actively managing large marine protected areas across multiple countries. 

The goal is to regenerate coral reefs and grow a thriving blue economy that lifts the surrounding fishing communities out of poverty and supports some of the most biodiverse and resilient regions in the world. Blue Alliance has a team of over 280 professionals, and currently the organization oversees 3.4 million hectares of coral reef ecosystems across Indonesia, Philippines, and Tanzania. 

So, Nico, tell us a bit about your background. How did you end up in this work that you're doing, and how did you get here and how did you decide to do this?

Nicolas Pascal: In a very short way, it is because of passion. There's a strong passion about the ocean and the water. I've been a free diver since I was five years old, so this has been there for all my life guiding and driving. 

I've done my PhD in marine ecology and I've been working also as an investment banker, so I was a bit far from coral reefs and free diving. I wanted to get close to the MPAs and getting a lot of money to manage my own MPAs, but it didn't work. But that's the whole thing; it is about being close to the water. 

Unfortunately, we're not going the right way. We have a lot of pressure on the reefs, on coral reefs. We have a lot of pressure on marine resources, biomass, and so on. So we have to do something. I decided to jump from the scientific point of view and even from the investment world to go directly to be a doer. 

We decided from the very start to run the marine protected areas instead of funding them or instead of monitoring the science behind it. We were directly in the action, and that's part of the passion also, to be directly in managing and having our own impacts underwater.

The Marine Co-management Model

David Meyers: Interesting. The approach that Blue Alliance takes is relatively, not unique, but relatively unusual in the marine space to actually take on co-management in the way that you do. This is a model that has been used in terrestrial protected areas quite often. 

Why is it different? How would you say it's different in the marine space? Why is it more common in terrestrial areas?

Nicolas Pascal: That's a good question. I really don't know why we don't have more Blue Alliances or more NGOs or BINGOs doing a co-management agreement. 

Where do we do it? We have African Parks in Africa. We have WCS doing some work in Africa also, but always, as you mentioned, terrestrial. In the marine side, I don't know why this model has not been more widespread. We have a few of them. We have some co-management in Belize, some in Bonaire, some in the Philippines or Indonesia, but it's very small or it has not been really upscaled. 

Maybe it's just a question of time. Terrestrial is always 20 or 30 years before the blue. Maybe it's just a question of time to realize that we have 30% by 2030, but we won't have it. We have 15% by 2030 and this 15% is on paper. It's totally useless. 

We need now to implement and manage it. Governments are always asking for help in this kind of management. So this is where we are. We don't really push anything; governments just ask us to work with them. This is what is happening in Indonesia, Philippines, and Tanzania, the countries where we work.

Delegated Management Agreements with Governments

David Meyers: That's amazing that you're being asked by government to come in and support them. Can you just give us a background of how the system works? What is your approach? What's been the approach up till now, and why do governments ask you to come in and help out?

Nicolas Pascal: The approach is quite straightforward. Basically today you have more than 20,000 MPAs in the world. We are aiming maybe to 8-10% cover of the coastal areas and the sea. But we know that 70% or more of these MPAs are paper parks. 

They have been designated, then they have few or no management at all. They are designated on paper, not really effectively managed. So that's the starting point. We identify large MPAs. When we say large, we are talking about hundreds of thousands of hectares. For example, in Indonesia, we signed recently for 1.4 million hectares, which is more or less 90 times the Galapagos.

And we say, "Okay, government, this has been designated more than five years ago—in this case was Maluku—and unfortunately you only have one boat and two guys to patrol in 1.4 million hectares. How can we help?" 

From there, we can start. There's a clear delegated management agreement, which is signed for long term. Depending on the country, it can be for 10 years or for five years, depending also on the political term of elections and things like this. And it's renewable. 

Normally we tell them we are not here as a program or project, and we're not here to give you money. We are here to be your technical partner and to work on your behalf. We become a second hand of government, obviously an independent hand. We're not political, but we are a technical partner for government. 

We are here for the long term, for 50 years, 70 years, 100 years. So they know that for this large MPA, they can count on Blue Alliance budget and Blue Alliance resources and Blue Alliance staff. They do it perfectly. The work plan is very clear. 

There's more than 70 activities that we have listed. We have two columns: government and Blue Alliance. Believe me, the government column is very reduced. It's key points like prosecution or regulations. But most of the day-to-day activities and field operation activities are on Blue Alliance. That's a perfect deal because government can free some resources to other MPAs or to other topics depending on its priorities.

Core Pillars: Enforcement, Science, and Livelihoods

Kim Bonine: That model is really fascinating. I'm curious, you mentioned working in a lot of different parts of the world, probably really different political, cultural, social, and economic contexts. But are there common themes in terms of what the governments need? 

Is it almost always help with the monitoring with more boats and more hands on deck? If so, how do you work with governments to help address what's driving those challenges in the first place, like people who are trying to go into the protected areas or illegal activities? 

If this is really for the long term, if those underlying drivers aren't addressed, it becomes difficult to think about durable, sustained protected area management.

Nicolas Pascal: Each government is different. We have a different deal with each government, but more or less, we have three main activities that we implement in each of the MPAs. We implement it with governments in closer collaboration, but most of the time we implement it alone and report to them every three months or every six months. 

These activities are basically in compliance. We need to patrol with authorities. We're not private police. Today we have more than 250 rangers. Our rangers are not carrying arms. They can do some light arrests, but they are not armed and they don't go into any fight or armed situation. 

We have a strong role with patrolling and monitoring illegal fishing and destructive fishing. Some of the rangers are deputized or things like this. At the same time, the same rangers or another team is going with the community to empower them. 

With the communities, it's really for them to become stewards of their own resources. We give them tools to manage their fishing ground by themselves and to have the proper tools to monitor the catches and if it is sustainable. Obviously, the two have to be together. 

You cannot do only community empowerment if you don't do the enforcement. Unfortunately, all humans are not the same. We have the good, the bad, and the ugly everywhere. We have always the free rider, the illegal fisher, who thinks that he can go beyond the laws. They will go poaching where all the other fishers are trying to respect sustainable rules. 

So you need the enforcement. Government has to do it; it is a role of government, totally. But unfortunately, it takes a lot of money to patrol because you need boats, people, fuel, and informers. You're not always in the water, and that's a lot of fuel. You need to structure things behind that. 

I think governments are improving, but we are very far from an effective management compliance. That will improve with time, but it's not something which can happen in the next 20 or 30 years. I'm a bit afraid that in 30 years, we will have even less coral reefs and even less fish underwater. 

The priority is really this compliance and community empowerment which makes a big difference between a paper park and an actively managed park. The second thing we do is the scientific monitoring. What are we doing? Is it working? Do we have more fish? Are we losing coral reefs? Do we have some bleaching event? 

If we have some emblematic species like turtles or dugong, how do we protect them? How do we make a better fishery management plan? There's a whole scientific team working with government to improve the regulations or to implement basic conservation activities, like night patrolling for turtles or doing a nursery for turtle eggs. 

The third one is really key: the link between nature and people. Basically, you cannot tell a hungry fisher to be a good conservationist. That's a basic point everywhere in the world. You need to develop a proper livelihood and a proper economic solution for the fisher. 

You cannot tell him not to fish if they're hungry and they are fishing for their family. If they have been used to using bombing for 20 years and suddenly you tell them not to do it, you need to find the right incentive behind it. You can't have only the stick; you need a carrot. 

That's the basic of our motto. We do conservation, but we do economy development at the same time. We have both divisions: a division doing science and conservation and enforcement, and a division doing business. That's another particularity of Blue Alliance. 

We don't trust the livelihood aspect as much. There have been a lot of livelihood programs in the last 30 years done by many people and NGOs with good intentions, but I would say the success rate is very low. As soon as the program leaves, the livelihood is not really sustainable. 

The reason is that you do it too much small scale. If you're selling $20,000 of honey to a market, as soon as the program disappears, this is not really enough to sustain a lot of people in an economy. You need to think at scale. You need to think at a blue economy level. 

Not too big, because we don't want to create a corporate company just oriented to profit, but not too small. You need the "missing middle" that we always talk about. The missing middle is approximately $2 to $3 million revenue per year for a social business with a community center. 

This creates a lot of jobs for our fishers, creates livelihood for the household of a fisher, and creates positive impact on the reef. If they are profitable, the profits will be reinvested into conservation. The model is really that we cannot dissociate blue economy development, alleviating poverty, and creating livelihood from the conservation side. 

That's why we have these two divisions in Blue Alliance. We're not a big NGO, so we're still on the sweet side where we can test things quite easily. Today we have more than 280 permanent staff. 80% is still conservation—rangers, community workers, people on the field. The rest is the business side, implementing a blue economy in aquaculture, fishery, and tourism around the large MPAs.

Financing Conservation Through Social Enterprise

David Meyers: Let's dive into that blue economy piece and its relation to how you're thinking about long-term finance for these areas. Marine protected areas need grant money, they need public funding where you can get it, and you need recurring revenue. 

But you're taking a really interesting approach, blending these business ideas with long-term funding. Can you explain how you hope that works? It's quite rare to have a business that produces profit where that profit goes back into conservation. Can you explain your thinking on that?

Nicolas Pascal: Our model is quite innovative, but it is linked to our long-term agreement with government. As I mentioned, we're not a project or program running for five years and leaving. No, we are here for the long-term—50, 60, even more years. 

We needed to find a sustainable solution. Philanthropy is always good, but by nature, they need to change every three or four years. They need to help more people to do new things. Philanthropy was never the long-term sustainable solution for managing a park for 80 years. 

The sustainable solution exists already. For example, you look at the IKEA model, where you have the IKEA Foundation owning all the stores and the businesses. Every time you buy your furniture in IKEA, the profits go back to the foundation and the foundation goes to impact. It's exactly the same. 

In Blue Alliance, you have a non-profit entity, the holding company, that is owning today six businesses in aquaculture, tourism, and fishery. These businesses are helping the conservation because they're creating jobs. They are very centered to the communities we have around the large MPAs. 

At the same time, they have a strong financial model and a strong market. There's a development of profit, which is expected after a break-even. A break-even should happen in year five or six. After this, the profits will start going into the conservation. Progressively, we will become independent from the philanthropists. 

Is it possible? I would say yes. We did it already in 2021 in Belize. There's a large MPA there called Turneffe Atoll. We were not the co-manager; the co-manager was there already and was working properly. They had their own staff. 

We decided not to jump too much in the management of the MPA, but to structure a sustainable financing mechanism for the large MPA. They were looking for $300,000 to $400,000 per year. So we structured a business in ecotourism. The U.S. and Belize are very close, so it was obvious we needed to do something with ecotourism. 

We invested in the ecotourism business. We developed and even sank a big vessel there to create a new attraction for divers. We structured different attractions and created this specific business. It's run as a business doing ecotourism where all the profits are reinvested into the MPA. 

Last year, the business generated 60% of the annual budget of the MPA. That's only two or three years after the investment, and there was a COVID in between. That's quite positive. Obviously Belize and the U.S. is a very specific market. You can't compare it to the Philippines and Indonesia. 

But at least we proved with one example and one impact investment in ecotourism that the business was able to generate these revenues for the MPA. An MPA with a business division can run the business. We proved it.

Scaling Impact to a Global Level

David Meyers: That's amazing. It's great to have concrete examples of it working. As you point out, IKEA or Patagonia—which is now owned by a foundation—are other models like that. I've also heard of other large companies that are subsidiaries of foundations. 

I think it's a fascinating model. I'd like to see more of it, as well as just revenue generating enterprises owned by nonprofits. There was this great example in the Caribbean where an NGO set up a rum distillery. They're funneling the profits back into the nonprofit. I really love that. 

Before we start thinking really big, one more piece to the puzzle I'd love to understand more is the investment fund and how that works. I know you've been working on trying to raise a fund to support some of these businesses. Do you see this as a viable path, and how is that working so far?

Nicolas Pascal: I can't say no. We don't have a silver bullet and there's not one solution for everything. We look at it really deeply now for coral reefs. Our solution today is working for 3 million hectares of coral reefs. 3 million hectares is approximately 2.5% of the world's coral reefs that we are protecting, which is massive. 

We're going to grow by 2030 to 9 million hectares. This model will regenerate more than 5% of the world's coral reefs. 5% is a magic number. This is like having impact at scale. You feel you have impact on one ecosystem at a planet scale. 

The model can be replicated not only by Blue Alliance, but by other Blue Alliances or incubations of this kind of project to 70 million hectares. 70 million hectares will regenerate a quarter of the world's coral reefs. We have not started yet in the incubation and how we can scale it with other partners. 

We have a donor very interested in this approach in scaling even more than 9 million hectares. They're pushing us to work on this model and how we can incubate or create more Blue Alliances around existing entities. 

The model today is working at scale already. We will scale it even more by 2030. This is a plan we have already and we are in touch with governments in Indonesia and Philippines. We have more than 4 million hectares additional that have been offered that we have said no to because we don't have all the resources yet. We don't want to grow too fast. 

Is it going to be an issue of the businesses? For 9 million hectares, the financial needs that we are looking for are more or less $5 to $6 million per year. The businesses that we have structured have the capacities to generate this as a profit per year. 

Not now, obviously, but in maybe six to eight years. The market for aquaculture that we are working on is big. The market for the fishery and the species we are working on is big. The market for ecotourism is big. These three markets have a huge potential to scale. 

We have blue carbon credits coming in these countries. If we focus only on these three sectors, we have a capacity to scale. At least to 9 million hectares, we think the companies can still keep a right size. For the growth to 70 million hectares, I scratch my head because I don't have a solution. 

The idea would be to create more companies like Blue Alliance. The market is big. We're not afraid of more competition; the model is really working. You need the large MPA management to improve the ecosystem services that can create the basis for these enterprises. 

For example, aquaculture of sea cucumber will only work if you have the management of a large MPA. One, because you are improving the health of seagrass and the nutrients that the sea cucumber will feed on. 

At the same time, with your Blue Alliance rangers and your community work, you are creating a lot of trust with local communities. When you seek a corner, you need a lot of hectares of grow-out farms in the wild. We're talking about 200 or 300 hectares of farms in front of the villages. 

If you come as a for-profit business, they will see you as an enemy or as a danger. They say, "Who is that guy? They're going to make short-term profit and leave." When you act as Blue Alliance, they know us and they trust us. 

The business we own can easily have more than 50 hectares of concession farms. We don't have any issue of poaching and enforcement because there's a lot of trust and we are working with the communities. There's a lot of synergy in the model. 

We're going one step beyond your rum company in the Caribbean. The businesses are linked to the community and to the management of a large MPA. There's a conservation aspect which is important for the business.

Challenges in Replicating the Model

Kim Bonine: That's so fascinating. This model seems so impactful because we hear so much about the potential and opportunity to bring the private sector into conservation. I feel like what you're doing is generating private sector activity and businesses in this very integrated way. 

It seems successful around building that trust because there's often this disconnect of timescales. You're talking timescales of a decade—generating a profit in seven or eight years. That works within this model. 

It solves so many issues at once because governments are also under tons of pressure to demonstrate the economic and social benefits of protected areas. Disconnected from businesses and livelihoods, that's really challenging. 

If you have communities as adversaries of marine protected areas and they feel shut out, it's very difficult to demonstrate those economic benefits. I find this model really fascinating and inspiring—the trust building and the recognition of the long timescales that are needed.

David Meyers: I agree totally with Kim. I think what you're doing is inspirational. It sounds like you've figured out a lot of things. We go back quite some time, Nico, so I know that you've been developing this over time and really improving it as you go. 

It's a very necessary approach for any kind of entrepreneurial activity to be dynamic, flexible, and respond to the opportunity and challenges. It's great to see where you've come from your initial vision. You've been able to adapt and grow. Congratulations.

Nicolas Pascal: You saw it from the start, almost. When we started in Barbados, you were already there. I remember the first incubation from CFA.

David Meyers: You have this vision and you want to scale up and bring other partners and have more Blue Alliances. How do we do that? How do you incubate other Blue Alliances? What do you think—why haven't more organizations done this and how do we get them to do it more? What is the secret sauce we need to build so they can do this?

Nicolas Pascal: I don't know the secret sauce. I know at least some of the ingredients. We have not really put a lot of thought and strategy onto this replication of a model. I think we're still learning. There's still a learning curve. 

Five years ago, we used to have the businesses directly run or managed by the non-profit. We realized that was not easy. It's two different worlds. An NGO cannot make business; let's be clear. People coming from the NGO world or from the conservation world don't really understand how a business works. 

People in businesses have been doing a lot of segways regarding conservation and marketing and greenwashing, so sometimes it's too easy. You have to find the right people. I found it much easier to start from business people doing conservation than conservation people doing business. 

That's a bit of a conclusion of what we learned. It's much easier, and you have much more people in businesses that want to do good, especially since we're not doing something radically different from what they were doing before. 

They're doing a business with a marketing plan, a financial plan, an investor, and a loan. There's a community aspect, a social aspect, and an environmental aspect, but it's a new twist in their career and they love it. 

That's one ingredient: to find the right people for the right job. There's a lot of people dreaming of saving the planet, but not dreaming of working 45 hours a week and not sleeping on weekends. Let's be clear. You can't save the planet and the coral reef in the "French way"—a strike and 35 hours a week. It doesn't work. 

You need a real commitment and a real implication. The first filter you need to do is remove this dream of just "saving the planet" and that's it. This is much more. You need to work. There's real work behind this. This is a lot of work. At least we have grown up and we're not doing multitasking like we were five years ago, but there's still a lot of work. 

NGOs and BINGOs are not equipped to do business. They have tried. What they have today is incubation, where they give money to do something with technical assistance, or they have a fund to give to some consultants to do work. But they don't run their businesses. 

If you look at Patagonia and IKEA, the model was run before by the for-profit company, and after they changed to the non-profit. From the NGO side, they might see the opportunity, but most BINGOs and NGOs are not equipped or don't have a business division. 

I don't understand why they're not looking for the long-term co-management agreement. That's a mystery. But for the business side, they are definitively not equipped. You need to create a whole business division, thinking as a business with business people and having their own accountancy, fundraising, and funding. 

If you look at the private sector now—not the NGO side—these people are struggling for profit. They have competition and regulations to fulfill. Now we're putting more environmental safeguards on them. It's already hard for a business to make money and survive. 

If you tell them their business has to make a triple bottom line and have social and environmental impact beside the profit, that creates a lot of complications. If they are not obliged, this is not going to happen very fast. 

But we are seeing more people wanting to do good and wanting to do business for good. The social enterprise and the B Corp movement are growing. Maybe what we need is to drive this growth into a proper impact. 

In our case, the companies we own are impactful. They can subscribe to B Corp and that's it. Because they are owned by a non-profit, they basically double the impact. They don't have only impacts on jobs and reducing illegal fishing, but they will have a huge impact on an MPA and a large seascape. 

You're multiplying your impacts on nature, people, and climate by two or three. This model is what we think should be replicated. That's part of the ingredients we need to put in the sauce. We will work with some specialized entities to work on this. 

We can be good at developing and implementing the model. I don't think we will be good also at replicating the model. I think some people have these specific skills to take a model and see what is needed to replicate it. This is a work that has to be done in the next five years.

Balancing Profit and Social Impact

David Meyers: There's so many countries that want to develop their blue economy in a sustainable way and are looking for these kinds of solutions. Hopefully, in the years to come, there'll be people willing to invest in that replication and knowledge sharing. 

As I'm hearing you talk, I'm realizing that there's actually quite a limited set of businesses that can have a conservation impact from their operations. You're starting from sectors like aquaculture, fisheries, and tourism. We could probably add waste management if it's done well, but that's a low-return business that needs public-private partnerships. 

It's really interesting finding those models and bringing the right people in. I think your emphasis on people has really struck a note with me because people are everything with a startup business. 

Maybe a final reflection on what your next few years are looking like and what you'd like to see partners do. How can our community support you in achieving these goals?

Nicolas Pascal: In terms of conservation and communities, we have strong support. The more we manage, the more communities we're working with. We need that because I can't put a ranger behind each fisher. We need strong community engagement. 

Regarding conservation, I'm not so worried. We still have a lot of illegal fishers using bombing and compressors, and that will always be the game of the cat and the mouse. But that's not a big worry if we put the right people in place. 

In maybe three to five years, the illegal fishing will diminish really a lot and we will have more people responsible for the resources. After this, what we need is obviously to maintain this. As soon as you are not there, the illegal and destructive fishing will come back. 

The tragedy of the commons is there. If you can catch $30 in one hour, why would you not do it if no one tells you not to? A fisher is a fisher. In tourism or ecology, there's no incentive not to pollute; they might even pollute because it's cheaper. 

As soon as we are not here, things are going to be worse. Meanwhile, I'm quite positive that if we are there, things will happen smoothly and even easier over time. What we need to secure now is this funding. We need grant money—catalytic money—because the companies are not going to be profitable immediately. 

We need catalytic money for the next 10 years. We need grant money at scale because 9 million hectares are mostly in the Coral Triangle in Indonesia and the Philippines, where we have the most resilient coral reefs in the world. 

We need grant money for the management of these large MPAs and to develop the initial working capital of the companies. We have impact investors aligned to invest in the companies. They see the companies as profitable. 

The bet we have is: are we going to find the right balance? We need to balance community jobs and environmental impact while being profitable enough. On paper, it's working. So far, we are working. The revenues of the six businesses last year have been above $1.2 million. 

We have revenues. We have a market. We are proving we can do it. Are we going to be able to grow the way we want while having the same impact on the community? That's what we need to prove. 

It's just something we need to keep in mind all the time. I repeat it to the directors of the businesses: this is a social enterprise. Never forget why you're here and what we are doing for the communities. But obviously, keep the profit in mind. Sometimes we talk about profit; sometimes we talk about communities.

David Meyers: It's always the tension in a social enterprise. There's a tension between profit and social environmental impact. That's what you manage. 

Nicolas, thank you so much for this great conversation—really fascinating discussion and amazing work that you're doing. I want to wish you and Blue Alliance the best of luck as you go forward. I look forward to collaborating together in the future.

Nicolas Pascal: Thank you to all of you for the opportunity to share the model. As I mentioned, we need more Blue Alliances, so that may create some new ideas and new projects. Thank you very much.

David Meyers: All right.

Kim Bonine: Excellent. Thank you. Thanks for joining us.