Investors call for sea change in aquaculture

Investors call for sea change in aquaculture
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Failure to manage environmental, social and governance risks could undermine growth in the $232 billion global aquaculture sector, a new report has warned.

These risks include climate change, a dependence on wild fish stocks for feed, excessive use of antibiotics and poor governance.

The report, ‘Shallow returns?’, also highlights the rising investment opportunities in areas such as fish health innovations. alternative feeds and plant-based fish products.

Produced by FAIRR – a network backed by investors manager over $12 trillion of assets – the report highlights average annual growth in the aquaculture sector of almost 6% and finds that fish farming has overtaken wild fishing as the main provider of seafood on our plates since 2014.

However, it warns that much of the growth is based on more intensive, high-density farming that is associated with ESG risks including climate change, antibiotics, algal blooms, fish feed supply and governance falling short.

Other risks highlighted include the level of effluents and waste flowing from aquaculture production systems to the wider environment; the millions of fish escaping fish farms and mixing with native marine populations; and the intensifying battle against fish diseases such as sea lice. According to the World Bank diseases alone cost the sector $6 billion per annum.

The report also highlights emerging management practices and innovations in the sector to help meet these ESG challenges, including the use of probiotics to reduce antibiotic use; the use of alternatives to fishmeal and innovative start-ups emulating fish products using plant-based ingredients.

“Investors should be aware of the sustainability risks in the aquaculture sector before they wade in too deeply,” said Maria Lettini, Director of FAIRR.

“From effluents to emissions, this sector must address significant environmental and public health challenges if it is to prosper over the long-term.

“There are clear steps which must be taken to manage these risks. For example, aquaculture operations should be certified against global standards that meet FAO guidelines.

“The market should also consider greater cultivation of species that remove marine pollution rather than contribute to it – such as mussels and oysters.

“In addition, farming these species brings minimal animal welfare concerns and does not require fishmeal-based feed.”

She added: “Investors have been watching the aquaculture sector with growing interest and are closely following the development of many potentially game-changing innovations such as advanced production systems and alternative feed ingredients.

“These innovations could disrupt the aquaculture sector if they succeed in addressing the sector’s critical sustainability challenges.”