7 minute read
Dr Adam Hughes
A question of definition of definition
What does sustainable investment in the Blue Economy mean for fi sh farming?
BY DR ADAM HUGHES
If the marine economy were a country, its GDP would rank about 7th globally in line with France or California. Es� mates of its global value (not including the value of the ecosystem services it provides) range between $1.5trn-2.5trn (£1.1trn-1.8trn), employing 20.5 million people and with a farm gate value of $0.263trn (£0.19trn). Aquaculture is, or course, a major component of the marine economy.
There has been signifi cant debate, however, as to whether all sectors of the marine economy are sustainable – and ques� ons over what “sustainability” actually means in the context of the Blue Economy.
The term “Blue Economy” emerged from the Rio+20 talks and was defi ned as recognising the ocean space and resources as an essen� al component of global economic growth and prosperity; although it makes the dis� nc� on that the Blue Economy is a conscious de-coupling of socio-economic development from environmental degrada� on.
The phrase, as synonymous with sustainable development, has been adopted by a wide range of governments and non-governmental organisa� ons including the United Na� ons, the World Bank, the Asian Development Bank, and WWF. However, there are large ques� ons over the meaning of sustainability in the context of the marine environment and what sectors or ac� vi� es can be included within the Blue Economy.
It is becoming increasingly important to provide an opera� onal defi ni� on, or a framework that allows for transparent appraisal of ac� vi� es or sectors of marine industries that can be included within the Blue Economy. This need for an opera� onal defi ni� on or appraisal framework is being felt not only by policy makers and regulators, but crucially by the fi nancial and investment community. Despite the size of the marine economy there is a recognised lack of capital fl owing towards the Blue Economy, and there is also a lack of marine focus to the rapidly increasing environmental, social and governance (ESG) investment that is taking place.
One of the barriers to investment in the Blue Economy, cited by 39% of asset managers, was a lack of defi ni� on. Financial ins� tu� ons are already highly engaged in the seafood sector but cite climate risk and ecosystem service loss as principal risks for investment. Notably, many fi nancial ins� tu� ons predict their investment in aquaculture will grow in the future, while investments in wild capture fi sheries are expected to decrease.
A parallel can be drawn between investors looking for sustainable businesses and sectors in which to invest and consumers looking for sustainable seafood products to buy. Demand from consumers led to a number of sustainability frameworks that went beyond regulatory compliance and that could be a� ached to specifi c products to be developed. This sustainability was signalled to the consumer by the addi� on of a logo or label to the product that provides assurance to the consumer and market diff eren� al to the producer.
In terms of the fi nancial sector there are also a number of emerging frameworks that propose to provide an opera� onalised defi ni� on of “sustainability” against which specifi c sectors or ac� vi� es within the Blue Economy can be assessed. Some of these frameworks are specifi c to the Blue Economy, whilst others are more generic but may directly apply to sectors such as aquaculture. Outlined below are three which 44
are directly applicable to aquaculture or have the poten� al to signifi cantly impact aquaculture in the future. 1) The UN Environment Programme’s Sustainable Blue Economy Finance Ini� a� ve (UNEPFI SBE) creates a pla� orm that is focused on banks, insurers and investors to help them develop lending, insurance and investment which supports the sustainable blue economy. The UNEPFI SBE was founded in 2019 and in its fi rst itera� on it concentrated on fi ve marine sectors including seafood and within this, aquaculture. For each of the sectors, the platform lays out a series of indicators and criteria. In the case of aquaculture the criteria are based around loca� on and si� ng, pollu� on and water quality, invasive species and escapes, disease, feed, and interac� ons with wildlife. Depending on how a business’ opera� ons are assessed against the criteria, banks, insurers and investors have recommenda� ons to avoid, challenge or seek out these businesses for investment. 2) The Interna� onal Union for Conserva� on of Nature (IUCN) Global Standard for Naturebased Solu� ons. Nature-based Solu� ons (NbS) are defi ned by the IUCN as the sustainable management, and restora� on of natural or modifi ed ecosystems, that address societal challenges eff ec� vely and adap� vely, simultaneously providing human well-being and biodiversity benefi ts. In our recent paper (www.fron� ersin.org/ar� cles/10.3389/ fmars.2021.711443/full) I and my fellow authors demonstrate how this principle, and the criteria that the IUCN set out as defi ning NbS, can be applied to aquaculture. Aquaculture is now globally and na� onally an important contributor to food security, so it is clearly addressing a fundamental societal challenge. If a par� cular aquaculture opera� on can demonstrate that it is designed to provide, and is delivering, human wellbeing and biodiversity benefi ts, then there is the poten� al for it to be classifi ed as a NbS. It has been demonstrated that aquaculture can be designed to deliver conserva� on goals, increase biodiversity and sequester carbon and as such would fi t into the defi ni� on of NbS. It is clear some types of aquaculture are be� er suited to mee� ng these criteria, predominately low trophic www.fishfarmermagazine.com
Above: How well does fi nfi sh farming fi t into a “sustainable” vision for the Blue Economy? species seaweed and shellfi sh aquaculture, but the conscious integra� on of mul� ple species including fi n-fi sh and lower trophic species to meet mul� ple challenges may also meet the criteria (see aquavitaeproject.eu/). 3) The European Union Taxonomy for Sustainable Ac� vi� es. To create a common understanding of sustainability to support the EU’s targets for climate and energy the EU has created a taxonomy or defi ni� on of sustainable economic ac� vity. It sets condi� ons that an economic ac� vity has to meet to qualify as environmentally sustainable: (ec.europa.eu/info/ business-economy-euro/banking-and-fi nance/ sustainable-fi nance/eu-taxonomy-sustainableac� vi� es_en). The economic ac� vity must make a substan� ve contribu� on to at least one of six objec� ves (climate change mi� ga� on; climate change adapta� on; sustainable use and protec� on of water and marine resources; a transi� on to a circular economy; pollu� on preven� on and control; and the protec� on and restora� on of biodiversity and ecosystems). In addi� on, the economic ac� vity must do no signifi cant harm to any of the other fi ve objec� ves, and comply with minimum exis� ng safeguards. Financial market par� cipants and large companies will be required to disclosure the propor� on of the turnover, capex and opex that is aligned with the Taxonomy. Currently the Taxonomy covers the fi sheries sector, but not aquaculture, but there is an expecta� on it will be expanded to include aquaculture.
It is clear that there is signifi cant interest in investment in the sustainable economy and specifi cally the Blue Economy at the moment, and the current wave of frameworks, defi ni� ons, criteria and taxonomy are an a� empt to support these investment decisions and to ensure that the investments are in line with sustainable development goals.
The fact that seafood is the highest traded food commodity by value (and within this the trade of salmon cons� tutes one of the largest fl ows) coupled with the above average performance of major fi nfi sh producers, the aquaculture sector presents an a� rac� ve opportunity for ethical investors. However, ensuring that fi nfi sh opera� ons are aligned with these new ini� a� ves may require signifi cant work when compared to low trophic species such as shellfi sh and seaweed: taking an ecosystem approach to management. The integra� on of fi nfi sh with other species may off er opportuni� es that be� er align with this wave of sustainable development. FF
