For over three decades, the world’s marine fish stocks have come under increasing pressure from fishing, loss of habitats and pollution. Rising sea temperatures and the increasing acidity of the oceans are placing further stress on already stressed ecosystems. Illegal fishing and unreported catches undermine fisheries management, while subsidies continue to support unsustainable fishing practices. Around 85 per cent of global fish stocks are overexploited, depleted, fully exploited or in recovery from exploitation.
At stake is a multibillion dollar global industry, one of the oldest in the world. And the mismanagement of this crucial source of food and income comes at a time when we need it most – the global population grows relentlessly and is predicted to swell to 9.3 billion people.
According to the World Bank’s Sunken Billions report published in 2009, improved governance of marine fisheries could capture a substantial part of the $50 billion lost annually through poor fisheries management. Through comprehensive reform, the fisheries sector could become a basis for economic growth and the creation of alternative livelihoods in many countries. At the same time, a nation’s natural capital in the form of fish stocks could be greatly increased and the negative impacts of the fisheries activity on the marine environment reduced.
The seafood industry – companies that catch, process and retail seafood – has a vital role to play in pushing for better management of fishing and fish farms. These companies have the influence necessary to persuade governments to effectively regulate and they also have a huge vested interest in sustainable supplies.
Companies that work with seafood are subject to numerous risks in the supply chain; supplies of fish can dwindle through overfishing, human rights abuses on fishing boats can ruin corporate reputations and fish farms can be ravaged by diseases that spread with lightning speed.
For instance, declines in Peruvian anchovy stocks recently led to a significant reduction in the supply of raw material for Hong Kong-based seafood group Pacific Andes’ fishmeal operations.Pacific Andes suffered substantial losses, with the company reporting that quarterly net profits were nearly 90 percent lower in the three months to June 2015 relative to the same period in 2014. In its disclosure, the company indicated that the reduced availability of anchovy was a major factor in the losses – the company simply did not have the fish needed for processing.
The Thai fishing industry is plagued with human rights abuses and fuelled by trafficked labour from neighbouring Myanmar and Cambodia. In 2014, the US State Department’s trafficking in persons report downgraded Thailand to tier three, the lowest ranking. The reputation of the Thai industry has been severely damaged. Consumer-facing brands in the US and Europe that buy Thai seafood have had to work hard to retain the confidence of customers that their products are not associated with slavery. It is not possible to assess the overall financial damage to the supply chain at this stage, but both businesses and consumers will be wary of seafood products from Thailand for some time to come. The Thai seafood industry, and its supply chain constituents, would have avoided much human suffering and significantly increased the value of the industry if it had adopted labour practices in line with international norms.
Fish farming also faces severe risks. Rapid, unchecked expansion and a lack of disease control measures proved disastrous for the Chilean farmed salmon industry early in the century. The fish disease Infectious Salmon Anemia (ISA) spread quickly across the Chilean industry, in part due to large concentrations of salmon pens facilitating the transfer of disease. First gaining public attention in June 2007, the ISA crisis has cost companies billions of dollars in lost revenue due to infected stocks. Despite new farming practices and legislation, disease outbreaks and industry concerns are still rife.
It’s self-evident that a business that works towards securing sustainable supplies of seafood is going to be substantially reducing business risk while also delivering wider benefits for the oceans. Unfortunately, that doesn’t always mean that companies take the kind of actions required and encouragement by those outside the business is often important in provoking change.
Responsible investors have a crucial role to play in supporting companies that want to source sustainably. Through asking the right questions and catalyzing debate, investors can nudge businesses towards doing the right thing for both the planet and their bottom line. Aviva Investors and Sustainable Fisheries Partnership have collaborated on a short guide – Sustainable Seafood and Responsible Investment – that provides investors with the information they need to ask the right questions.
If the responsible investment community engages the seafood industry around sustainability it will certainly yield positive change.The industry already receives clear signals from NGOs and consumers that sustainability should be high up their agenda but similar messages from the investment community would add a whole new dimension to the debate. And Sustainable Fisheries Partnership is available to support investors in these conversations through explaining technical issues and helping to formulate follow-up queries.
Abigail Herron is Head of Responsible Investment Engagement at Aviva Investors and Blake Lee-Harwood heads the Sustainable Fisheries Partnership’s Strategy, Communications and Analysis Division.