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Global investor network the FAIRR Initiative has launched a new benchmark assessing how twenty of the world's largest seafood companies are responding to environmental, social and health-related risks.
The newly-launched Coller FAIRR Seafood Index takes a look at how prepared companies are to manage risks across their operations and supply chains, covering categories such as pollution, modern slavery, food safety, traceability, animal welfare, antibiotic use and greenhouse gas emissions. According to FAIIR, the index "benchmarks the maturity of a company’s response to environmental and social risks and opportunities, rather than identifying how sustainable the company’s operations are".
The global investor network said the benchmark, which considers the world’s 20 largest listed seafood companies, challenges positive assumptions about seafood sustainability. The organisation noted that seafood is often seen as a lower-impact alternative to other animal proteins, but said the sector still faces significant environmental and social risks.
The twenty companies analysed included Mowi, SalMar, Lerøy Seafood Group, Thai Union, Sysco, Nomad Foods, BioMar and Bakkafrost, with Of the companies, 40% headquartered in the Asia-Pacific region, 40% in Europe and 20% in North and Latin America.
The index found that seafood companies performed overall better on social risks than on environmental issues. The average score for social topics was 39/100, compared with 25/100 for environmental topics. FAIRR reported that Mowi scored the highest of the companies for its approach to social risks, at 69/100.
Pollution was the weakest area amongs the environmental topics, with companies scoring an average of 19 out of 100 on pollution, encompassing issues such as effluent from salmon farms, marine litter from pens and fishing gear, and chemical contamination. FAIRR said the worst-performing company on environment and climate issues in the index is global wholesale company Sysco, scoring just 6/100.
The index also found weak performance from seafood companies on traceability, with companies scoring an average of 27/100. FAIRR said this leaves consumers exposed to risks including mislabelled seafood and potentially illegally caught fish.
However, food safety was one of the stronger areas scored, with an average score of 43/100. However, FAIRR found that companies scored lower on antibiotic stewardship and animal welfare, with average scores of 27 and 26 out of 100 respectively.
FAIRR also said companies are missing opportunities in more sustainable seafood products. Companies scored just 11/100 for future-facing opportunities, including protein diversification and unfed aquaculture such as mussels, oysters and seaweed.
The benchmark also found limited evidence that companies are turning sustainability commitments into action. Companies scored 25 out of 100 on implementation and 23/100 on outcome metrics.
“Whether it’s IUU fishing, overfishing or issues of disease and pollution management in farmed seafood, it’s clear that there’s a lot of work to do to ensure seafood contributes sustainably to global food security and resilience," said Max Boucher, Head of Nature Programmes at FAIRR. "The companies that sit at the bottleneck of these complex supply chains can contribute to this now by acknowledging the materiality of these risks to their businesses and working to identify high-risk practices at sea, rather than being content with opaque sourcing.”
“Capital has the power to accelerate the shift towards more sustainable practices if investors have the tools to understand the true impact of harmful practices and their financial materiality. The Seafood Index is a leap towards the more sophisticated identification of the sector’s social and environmental risks and opportunities with a forward-looking view on whether companies are really taking action,” Boucher added.
Karl Høgtun, Director Governance and Biodiversity at DNB Asset Management described the Seafood Index as "a much-needed tool to capture the nuance of the seafood sector’s operations,", and argued "the Index is vital to bring colour to financially material topics to seafood sustainability – from deforestation to modern slavery.”
FAIRR said investors can use the index to compare companies, supporting investment decisions and engagement with businesses on improvements.
The organisation added that the companies themselves can also use the benchmark to identify areas for improvement and compare their practices with their global peers.
