Risks and opportunities in aquaculture
The FAIRR Initiative reports why aquaculture must overcome an array of ESG risks before it should be considered a sustainable solution to meeting the growing global demand for protein.
The global aquaculture industry is booming. Average per capita seafood consumption has doubled since the 1960s and since 2014, aquaculture has provided more of global seafood production than fisheries.
A report released by the FAIRR Initiative, a collaborative investor network that raises awareness of the environmental, social and governance (ESG) risks and opportunities caused by intensive livestock production, explains why aquaculture must overcome an array of ESG risks before it should be considered a sustainable solution to meeting the growing global demand for protein.
The ten ESG issues in aquaculture reported are:
- Greenhouse gas emissions. Catches and fish feed prices depend heavily on El Niño and other weather phenomena that are caused by global warming. In Ecuador, shrimp production is likely to outweigh demand in 2019 due to El Niño weather conditions. It is expected that the increased harvest will reduce the price of shrimp. The effects are starting to be noticed – in February 2019 the average price for shrimp was $2.67/lb, compared with $2.96/lb in the same month last year.
- Habitat destruction and biodiversity loss.
- Fish feed supply. Catches and fish feed prices depend heavily on El Niño and other weather phenomena that are caused by global warming.
- Disease. In Chile, the salmon farming industry experienced an outbreak of infectious anaemia (ISAV) that cost the sector $2 billion and 20,000 jobs. Due to the impact of the epidemic, banks chose to renegotiate loans. However they also considered forcing companies into bankruptcy, highlighting the severe risk that disease presents to aquaculture.
- Antibiotic use. The US imports about 70% of its seafood from Asia, half of which is cultured. In 2016 the US Food and Drug Administration (FDA) saw a record year for refusals to import Asian shrimp due to contamination with banned antibiotics. In January 2019 the FDA prevented 26 shipments of Indian shrimp from entering (15% of the total for that month), due to detection of banned antibiotics. India is the country’s top shrimp supplier, making up 35.2% of all imports. The US is therefore highly exposed to risks associated with antibiotic use in the Asian market.
- Transparency and food fraud.
- Forced labor.
- Community resistance.
- Fish welfare.
More information here.