New Report: Banks Can Play a Key Role in Improving Sustainability in SE Asia’s Seafood Industry

Banks operating in South East Asia and parts of Latin America stand to benefit from improving policies to manage the negative environmental and social impacts of seafood production, according to new research from Global Canopy developed in partnership with WWF. This partnership has valued goods and services from the ocean economy at around $2.5 trillion each year, with SE Asia set to produce a quarter of the world’s seafood by 2030, a core sector of the blue economy.

Despite some safeguards against labor rights issues, however, none of the 24 banks assessed in the SE Asia region have a seafood-specific lending policy.  This contrasts with the eight large global banks that have operations in SE Asia, including Deutsche Bank and Standard Chartered, that have all adopted some form of sustainability policy on seafood.

Based on the report’s findings, Global Canopy has added new tools and guidance to SCRIPT that will help banks take a more active approach to engaging companies about the sustainability and impact of their seafood-related practices. Launched in April 2018, Global Canopy’s SCRIPT (soft commodity risk platform) aims to help South East Asian and Latin American banks analyze their soft commodity exposure and minimize the environmental and social impacts of their loan books. Financial support for the project has come from the Gordon and Betty Moore Foundation.

“Essentially, these tools give banks a set of questions to prioritize when engaging with companies on key issues. These are the questions that we think are important enough for banks to ask companies. We have worked with 15 banks to develop the platform itself to understand their needs and so far we have had 40 banks and investors sign up to use it. It’s a significant number that we may not have seen a few years back,” Tom Bregman, senior sustainable finance associate at Global Canopy, told AgFunderNews.

“For us, what we see is growing consumer and government attention on the impacts of soft commodities, but we are also seeing a number of companies not doing enough to manage the business risks that are becoming apparent associated with producing things like seafood, palm oil, and soy,” Bregman says. “Banks have a fundamental role to play and through what we launched today we can help them understand these risks better.”


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Some of the risks that the report highlights for banks with seafood-focused policies include the over-exploitation of fish stocks and the use of fishing gear that damages marine habitats, the increase in regulations governing illegal and unreported fishing activities, and the reputational damage that comes with being associated with unsustainable and unjust practices. It also flagged market risks associated with consumers’ clear preference for sustainably sourced seafood, with a recent study indicating that consumers rank sustainability above price and brand.

The updated platform will be released for banks to use later this month. This includes an updated policy benchmarking tool to help banks assess the strength of their seafood policies against 60 peers globally and regionally, as well as materiality guidance to demonstrate the business risks facing companies operating unsustainably in seafood supply chains.

The platform will also feature corporate guidance and a briefing paper to set expectations for the boards of companies operating in seafood supply chains. The expectations are intended to foster more effective financial institution-to-company engagement around environmental and social impacts associated with aquaculture and fisheries.

Developed with a number of partner organizations, SCRIPT also contains tools allowing financial institutions to benchmark their policies on deforestation against their peers and to assess how they may be exposed to deforestation risk in their investment portfolios. The tools are free to use and provide practical, customized advice on how to move towards greater sustainability.

Seafood Startups Aim for Sustainability

Fortunately for financial institutions, there are a growing number of startups, accelerators, and competitions dedicated to the aquaculture and seafood space. A few major categories of innovation include traceability, feed efficiency, and fish health.

Until roughly 2011, traceability in the seafood industry was virtually non-existent. Now, several companies are working on science-based ways to trace seafood from sea to table. A few early players in the seafood traceability space include Pelagic Data Systems, Norpac Fisheries Export, ThisFish, and Sea-to-Table.

The seafood tech ecosystem now features its own dedicated investment funds and accelerators. One of the busiest seafood investment funds is Dutch outfit Aqua-Spark, which has invested in a number of companies including several in the feed efficiency space like Norwegian startup CageEye that uses echo-sounder technology to pinpoint how much feed fish are consuming.

Sustainable seafood business competition Fish 2.0 aims to help build knowledge and connections in the global industry after founder Monica Jain noticed a large, fish-shaped hole in investor portfolios. Hatch, an aquaculture startup accelerator launched by Carsten Krome of Alimentos Ventures, offers startups in the aquaculture space with fish-focused support in Bergen, Norway, which is home to big names in seafood like Marine Harvest, Cargill, Leroy, and Grieg Seafood.

The connection between human rights and seafood has also garnered the tech community’s attention, with San Francisco-based Humanity United running a contest encouraging startups to apply technology to labor trafficking, something that is a major issue in the seafood industry. In 2016, Trace Register claimed the contest price for its software that allows buyers to differentiate between the many products they may source and to connect the supplier at the point of purchase and consumption.

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