Leverage points in the financial sector for seafood sustainability

Abstract

Can finance contribute to seafood sustainability? This is an increasingly relevant question given the projected growth of seafood markets and the magnitude of social and environmental challenges associated with seafood production. As more capital enters the seafood industry, it becomes crucial that investments steer the sector toward improved sustainability, as opposed to fueling unsustainable working conditions and overexploitation of resources. Using a mixed-methods approach, we map where different financial mechanisms are most salient along a seafood firm’s development trajectory and identify three leverage points that can redirect capital toward more sustainable practices: loan covenants, stock exchange listing rules, and shareholder activism. We argue that seafood sustainability requirements need to be integrated into traditional financial services and propose key research avenues for academic, policy, and practice communities. While our study focuses on the role of finance in seafood sustainability, the insights developed are also of high relevance to other extractive industries.

Anatomy and resilience of the global production ecosystem

“…The use of fishing quotas as collateral in loans by Icelandic banks, and the resulting debt for the industry when the banking system collapsed, provides a compelling example 146 . If financial actors were to become aware of how ecological risks translate into financial risks, entry points for sustainability considerations into financial decisions might emerge with strong incentives to implement better standards and redirect capital towards more sustainable practices 113 . Regardless, financialization of the biosphere should be increasingly recognized and studied as an intrinsic process shaping the GPE.…”

“…Financial investments-public or private-are increasingly recognized as key leverage points for achieving sustainability [111][112][113] . Government subsidies channel large amounts of public capital into the different sectors of the GPE, ultimately influencing practices and species production on the ground.…”

“…The insurance sector could also provide important leverage towards more sustainable practices-for instance, by refusing to insure fishing vessels associated with illegal, unreported and unregulated fishing 118 . Similarly, loan covenants (that is, the specific conditions associated with credit lending) provide a powerful tool for banks to influence the behaviour of borrowing companies operating in the GPE by denying access to clients that do not comply with sustainability standards and providing incentives so that better sustainability performance results in reduced interest rates 113 . In this context, pressure from governments and finance ministries will be essential to promote new norms and regulations that can align banks, financial markets and other investors with sustainability goals 113 .…”

Large-Scale Evaluation of Major Soluble Macromolecular Components of Fish Muscle from a Conventional 1H-NMR Spectral Database

“…There is growing interests focusing on seafood as a critical source of animal protein to meet the nutritional demands of a growing population within environmental limits. Notably, the rate of fish consumption has increased twice as rapidly as population growth since the 1960s, making fish as one of the most traded food commodities [1]. Nutraceutical products made from fish, such as fish lipids and oils, are one of the sources of vitamin D and omega-3 polyunsaturated fatty acids (n-3 PUFA), e.g., docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA), which, for instance, have been shown to be effective in reducing the risk of coronary heart disease [2].…”

Scrutinizing impact investment in sustainable fisheries

“…To understand potential trade-offs, avoid subjective evaluations, and fully realize associated risks, we contend that impact metrics must therefore reflect the broader social-ecological system (Jouffray et al 2019). Metric selection should be based on approaches that move beyond singlespecies management to consider wider marine biodiversity (including human) dimensions, such as ecosystem-based fisheries management (EBFM).…”