Stockholm (NordSIP) – On August 20th in Oslo, The FAIRR Initiative, presented its new report on aquaculture companies developed in collaboration with KLP and Norsif – Shallow returns? ESG risks and opportunities in aquaculture.
The FAIRR Initiative is a collaborative investor network that raises awareness of material ESG risks and opportunities in global animal protein supply chains. FAIRR helps investors identify, prioritise and act on these factors through cutting-edge research and collaborative investor engagements with global food companies. Among its research resources, its proprietary Coller FAIRR Protein Producer Index is the world’s first comprehensive assessment of the largest global animal protein companies on critical environmental, social and governance issues.
The report covers 15 companies from Norway, Chile, Japan, Thailand, Taiwan, Malaysia, Singapore, Australia and the Faroe Islands. The aquaculture industry is particularly relevant to Norway where it accounts for nearly US$ 8 billion. Four Norwegian companies are covered by the report: SalMar ASA, Lerøy Seafood Group ASA, Grieg Seafood ASA, and Mowi ASA.
According to FAIRR’s report, the aquaculture industry is facing increasing ESG risks. Up until recently, the focus has on the sustainability of the feed it uses, the waste it produces and its environmental impact, biodiversity loss, the costs imposed by disease and the inevitable use of antibiotics, and community resistance. However, emerging concerns regarding the industry’s greenhouse gas (GHG) emissions, price-fixing scandals in the EU and USA and fish welfare have recently been added to the list of issues the industry faces.
The issue of fish welfare is particularly crucial in Norway, where the salmon industry accounts for a dominant share of aquacultures. The report considers issues regarding salmon housing, stocking density, handling, transport, production and spawning.
In comparison to all 60 companies that FAIRR assesses through its proprietary Protein Producer index (PPI), the fifteen aquaculture companies stand out for being predominantly medium (9) and low risk (2). Only four companies are ranked among the high-risk group, which includes more than half of all the companies ranked by FAIRR’s PPI. The four Norwegian companies rank as least risky, while Malaysian, Japanese, Singaporean and Taiwanese companies rank as riskiest.
The lowest scores within FAIRR’s key performance indicators among the group of Norwegian companies was due to issues regarding scope 3 targets for GHG emissions and Human Rights concerns in terms of working conditions.
The report concludes by pointing to the experience of the meat industry and the pressure it has been experiencing from the rise of plant-based alternatives from incoming competitors such as Beyond Meat and Impossible Foods. Similarly, the FAIRR report expects the fish industry and aquacultures in particular, to feel the pressure of plant and cell-based seafood producers such as Sophie’s Kitchen, Good Catch, Impossible Foods, BlueNalu and Shiok Meats.
Featured Image of Berufjörður Salmon Farm via Wikicommons