Investment guide launched to bolster blue economy and counter ‘mistaken perceptions’

White paper includes recommendations for commercial investors into marine aquaculture

A report has today been published to help investors find business opportunities in sustainable aquaculture, in a bid to raise awareness of the social and environmental value of allocating capital to the sector.

‘Towards a Blue Revolution: Catalyzing Private Capital in Sustainable Aquaculture Production Systems’ is co-authored by environmental NGO The Nature Conservancy and impact investment house Encourage Capital, and seeks to be an open-source ‘best-practice’ guide for investors, philanthropists and other stakeholders interested in the blue economy.

Aquaculture is a controversial area, particularly from an environmental perspective, where it has been seen to have negative impacts on water quality, habitats and wild fish stocks. But, the report argues, if done responsibly, it can provide viable long-term solutions to food challenges, and offers an alternative to livestock farming on land.

“As the fastest-growing form of food production on the planet, expanding at an annual rate of almost 6% globally, it is worth noting that aquaculture is already a $243.5bn global industry, bigger than beef, pork and chicken,” the report says. “If we can successfully guide the private sector towards investing in the right types of aquaculture innovations with proper governance and performance standards in place, we believe that the future of aquaculture can be far brighter than it would be under a business as usual scenario. We need to act now to ensure it grows sustainably.”The report looks at impact investing in areas that will make aquaculture more sustainable. However, it warns that “there are no silver bullets”, and that governance will continue to play a major role – laying out key sustainability principles for different types of production system, to help investors. The document also offers analytical and assessment tools, case studies and recommendations for structuring investments to minimise risk and bolster environmental impacts. The latter includes recommendations to seek equity upside for debt investments, and participate in blended finance models.

“We believe there is a mistaken perception among investors that novel, more sustainable production systems are riskier than they are, but in fact these models bear significant potential to deliver market-rate risk-adjusted financial returns. We argue that by framing aquaculture projects as a hybrid of a real asset and an operating company, investors can better manage their risks and returns,” the report says.

“By providing concrete recommendations for how investors might best structure investments into sustainable aquaculture systems, the report aims to accelerate successful deployment of capital into these opportunities.”

The full report can be found here.