Sustainability is central to the business success of companies that produce, process, or retail seafood because of the significant risks inherent in the supply chain. Companies engaged in the seafood sector have to manage risk factors, such as:
Risk of supply chain disruption – Wild fisheries can be overexploited, causing a dramatic fall in annual harvests, while fish farms can be ravaged by disease.
Risk to reputation – Companies with public-facing brands face a risk to their reputations if they do not act to source from responsibly managed fisheries and fish farms.
Risks associated with production factors – Fish farming may involve the use of materials or techniques that can lead to wider systemic problems.
Risks associated with using illegal product – Illegal fishing, sometimes called pirate fishing or “IUU” (illegal, unreported, unregulated) fishing, is a major problem in seafood supply chains and is closely associated with environmental damage and labor abuse.
Risk associated with human rights abuses – The seafood industry contains supply chains where human rights abuses are well documented. These risks are particularly severe in developing countries (for instance, Thailand) but can also happen in developed countries.
These risks are significant, however, the companies that catch, farm, process, and retail seafood have significant power to change things for the better and there are already many examples of enlightened corporations that have taken steps to improve fishing and fish farming. Companies that adopt sustainable sourcing policies are demonstrating an effective approach to risk management and sending a powerful message to investors that the business is well run.
Engagement by responsible investors can have an important effect in encouraging companies to adopt progressive policies that reduce environmental and human rights abuses and enhance the sustainability of fishing and fish farming. SFP and Aviva Investors have produced a briefing that will guide investors seeking to improve the sustainability performance of companies through asking the right questions and promoting measures that will deliver real benefits.
SFP and Aviva Investors are also working closely with the United Nations Principles for Responsible Investment to directly engage seafood businesses and promote sustainable sourcing. Further information about this initiative will be published on the SFP website during the rest of the year.