Sustainability is central to the business success of companies that produce, process, or sell seafood. Companies engaged in the seafood sector have to manage significant risk factors inherent in the supply chain, including:
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 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.
Risks associated with human rights abuses – Human rights abuses are well-documented within the seafood industry supply chain. These risks are particularly severe in developing countries (for instance, Thailand), but can also occur in developed countries.
While the potential impact of these risks is significant, companies that catch, farm, process, and sell seafood have the power to influence the supply chain for the better. There are already many examples of enlightened corporations that have taken steps to improve fishing and fish farming. Companies that adopt sustainable sourcing policies demonstrate an effective approach to risk management and send 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. In 2016, SFP, Aviva Investors, and the United Nations Principles for Responsible Investment program produced a report, Sustainable Seafood and Responsible Investment, to guide investors seeking to improve the sustainability performance of companies in asking the right questions and promoting measures that will deliver real benefits.
In April 2017, SPF and Aviva Investors co-hosted a “teach-in” for investors, along with Responsibleinvestment.com. The event reviewed the risks of business as usual and the importance of sustainability for seafood investors, and why it should matter to investors. A report on the event can be found here. SFP continues to work closely with our partners to directly engage seafood businesses on promoting sustainable sourcing.