Global demand for protein is old news. Whether we’re talking about the growth in demand for meat by consumers in developing countries, where stable crops have taken up most of the plate for centuries, or we’re talking about the Western search for new, healthier and more sustainable sources of protein, we all know protein-rich food is en vogue.
What you may not realize, however, is that seafood is the fastest-growing protein category, with an annual growth rate surpassing that of all land-based animal meat combined. And within that category, fish farming — or aquaculture as it’s more technically known — contributes more than wild capture operations dubbed fisheries.
The environmental consequences of beef farming are very well known thanks to the wealth of information — some of it misinformed — offered to consumers daily, often by startups creating alternatives. Beyond Meat’s stellar IPO and Impossible Foods’ star-studded investment round are cases in point.
But aquaculture also has an environmental footprint that needs serious attention, according to a new report from FAIRR, the investor network dedicated to highlighting ESG issues in protein supply chains. And the industry is at risk from environmental threats coming from elsewhere.
While it’s worth noting that FAIRR was founded by renowned private equity tycoon Jeremy Coller, a prominent vegetarian keen to promote alternative sources of protein, there are plenty of stark facts in this report that are worth taking note of.
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It’s not all doom and gloom; the report also shares some of the key areas of innovation that can meet these challenges and the opportunities for entrepreneurs.
The Greenhouse Gas Impact
While there is no reliable data estimating aquaculture’s contribution to global greenhouse gas emissions, the report states that shrimp production can be as emission-intensive as beef production and that aquaculture in the top 21 producing countries is responsible for 1.8% of global methane emissions.
Increased greenhouse gas emissions globally put the industry at risk. The report examples an increase in the salinity and temperature of waters, which can propagate disease and parasites. Disease and parasites in aquaculture, such as sea lice on salmon or Early Mortality Syndrome for shrimp, significantly increase production costs, due to the cost of infection control and loss of stock, costing the industry $6 billion in 2014, according to the World Bank.
The increasingly volatile weather associated with climate change is also a major concern for the industry.
“Southeast Asia, one of the world’s most productive aquaculture regions, is expected to experience a 10% to 30% drop in marine fish production by 2050,” largely due to poor weather conditions, reads the report.
Habitat Destruction and Biodiversity Loss
Weather can also impact the surrounding environment when storms damage fish farms, resulting in fish escaping. This negatively impacts native species that the farmed fish either threaten or mix with, modifying the gene pool. In 77 out of 147 rivers sampled in Norway, almost 50% of wild fish contained the DNA of farmed salmon.
Perhaps more stark are the more local environmental consequences of the industry, particularly algal blooms.
While we typically associate algal blooms with the run-off of fertilizers from land-based agriculture into waterways promoting the growth of algae on the surface of the water, aquaculture also contributes to the issue with effluents and wastewater discharged from fish farms into open waters.
This directly impacts the industry in a big way, including suffocating fish and poisoning them. Algal blooms in 2016 caused an estimated $800m in damage to the Chilean salmon industry and killed nearly 27 million fish (20% of that years’ salmon production). And Norway is currently experiencing its worst algal bloom in 30 years already killing 8 million salmon.
The report does not stop at environmental concerns; there are many social concerns too including antibiotic use, transparency and food fraud, forced labour, community resistance and fish welfare.
The Way Forward – and the Entrepreneurial Opportunity
There are a wealth of technologies that aim to better manage the ESG challenges facing the aquaculture sector and the report outlines some of them.
- Feed innovation,
- Repurposing waste as feed,
- Fish oil replacement from algae,
- Insect-based feed,
- Plant-based and cultured seafood alternatives.
The report also offers investors some questions to ask companies that they might invest in to ensure they’re pursuing appropriate ESG policies.
You can read the full report here.