15 October 2021
Sustainable Seafood can be one piece of the puzzle in ensuring food security in a low-carbon future. Global leaders are meeting at the Tokyo Sustainable Seafood Summit this week discussing innovations in the space. The blue (ocean) economy offers many opportunities for private finance to lend and invest in a sustainable and nature-positive way. Here we look at some of the leading examples of best practice in social and environmental sustainability across the seafood sector which banks, insurers and investors can seek out.
There is a pressing need to move the remainder of the world’s fisheries from an unsustainable to a sustainable status. Currently, 21.3% of the world’s fisheries remain over-exploited, which means the SDG target 14.4 to end overfishing by 2020 has not been achieved (FAO, 2020). From a financing perspective, it is vital for mechanisms and institutions to pivot away from providing capital or insurance to companies active in over-exploited fisheries.
In aquaculture, key concerns relate to reducing aquaculture’s negative impact on the environment while scaling up globally to meet the demand for animal protein, particularly among the world’s emerging middle classes. Improvements in profitability and efficiency— notably through sustainable intensification and improvements in feed conversion and new commercially available species—are additional factors for the sustained growth of aquaculture.
How financial institutions can capitalise on a sustainable approach to the seafood sector, while mitigating key risks arising from social and environmental impacts is a key question. To build understanding of the developments in the sector, we have listed 8 examples of innovative best practice in seafood that you might not know about.
Check out Turning the Tide, UNEP FI’s detailed guidance on financing for the sustainable blue economy for more examples and how they may be material to your institution. The guide also includes an overview of activities to challenge or to avoid financing altogether, based on their sustainability credentials and overall risk. The recommendation may be to challenge certain activities, even where best practice is present in other areas.
Aquaculture can play a role in reforestation and remediation of nature. Companies actively restoring and replacing natural capital can enhance both their own business model’s viability as well as the surrounding environment. Opportunities for businesses providing ecosystem services for profit are emerging, as highlighted by the Seaweed for Europe coalition, which focuses on the ecological co-benefits provided by seaweed cultivation.
Opportunities exist for safer and low-impact aquaculture development, for example in recirculating aquaculture systems and other closed loop technologies that prevent disease outbreaks or escapes. Look for opportunities that meet globally benchmarked aquaculture standards such as the Aquaculture Stewardship Council’s species-specific standards, which offer benchmarks on biosecurity.
Feed links aquaculture to a number of other sectors, including agriculture and wild-capture fishing. Standards for feed conversion, sourcing and waste, as well as alternatives to existing feedstocks are driving innovation. Seek out companies that are meeting feed best practice standards and those producing or sourcing from low-impact and innovative alternatives, such as algae- or insect-based feed.
Wild capture fisheries
Transparency and traceability are essential to sustainable fishing, and products and services that increase these are under continuous development. Seek out companies that, through their products and services enable alignment with global best practice guidance and standards for traceability, such as the Global Dialogue on Seafood Traceability framework.
How we fish matters as much as what we fish for – some gear types are less impactful on the environment, and low-impact fishing gear is being actively developed. Seek out companies that are providing the fishing sector with low-impact fishing gear or technologies or enabling significant reduction in accidental catch of non-target species – such as the use of lights in nets.
The sustainability of the fish itself is paramount to the sustainability of the fishery. While the majority of the world’s fish are fully or over-fished, fortunately many opportunities exist for financing companies that only source from certified sustainable sources or those in time-bound fishery improvement or recovery projects. Seek out opportunities that are financially enabling the transition to sustainable fisheries at scale, such as those listed on www.fisheryprogress.org towards a leading – and where possible – benchmarked fisheries standard.
Investors are beginning to take note of the importance of sustainability in fisheries. In September 2020 Credit Suisse – in collaboration with Rockefeller Asset Management – launched a novel investment fund called the Ocean Engagement Fund. Together with the Ocean Foundation, the equity fund will focus on SDG 14 (Life Below Water) with a goal of helping to restore global ocean health, including through the seafood sector, while generating positive returns for investors. Fund managers will actively engage with investee companies and encourage them to take steps to mitigate harmful impacts and move towards sustainable practices.
Across seafood supply chains, minimising waste represents best practice. Seek out companies that are providing products or services that help reduce or eliminate waste and food loss, for example through cold-chain storage, quality control or by-product development. The Icelandic Ocean Cluster’s 100% Fish project, for example, fosters innovation across the seafood value chain to develop new commercial by-products.
Climate change impacts on the seafood sector are varied, and include severe weather events that may disrupt businesses and livelihoods. Fortunately, there are products and services supporting both aquaculture and fisheries in increasing their resilience to extreme weather events and provide financial cover or innovative solutions to increase adaptive capacity. Seek out companies that provide the sector with these products and services (such as risk financing and more resilient physical assets), as well as the businesses already taking advantage of existing products – like the Caribbean Ocean and Aquaculture Sustainability Facility.
DISCLAIMER: this list does not represent investment advice nor is it an endorsement of any specific investment opportunities. Due diligence should continue to apply in addition to consideration of opportunities enabled by applying the Turning the Tide guidance.