The Growing Importance of Sustainable Aqua-Certification
In recent discussions surrounding ocean finance and sustainability, key figures like Ray Dhirani, head of capital markets outreach at the Aquaculture Stewardship Council (ASC), have spotlighted the critical role of certification in guiding investors toward environmentally and socially responsible aquaculture practices. With seafood lovers often unaware of the complex processes behind the shrimp, salmon, or tilapia that grace their plates, a concerted effort is underway to cultivate more responsible and future-oriented seafood farming practices—efforts that are not going unnoticed by investors.
Events Shaping the Future of Ocean Investment
Dhirani recently shared valuable insights from pivotal events such as the United Nations Ocean Conference (UNOC) and the Blue Economy & Finance Forum (BEFF). While these platforms have sparked discussions around ocean sustainability, the challenges they unveil are significant. Dhirani highlighted a cautious optimism; innovative financial models and partnerships, particularly in developing regions, suggest that there’s more than just a glimmer of hope for sustainable investments.
Funding Gaps in Ocean Protection
During the UNOC held in Nice, France, leaders collectively pledged $10 billion towards ocean protection initiatives. While substantial, this amount starkly contrasts with the estimated $175 billion needed annually to ensure marine ecosystems’ health and promote sustainable development. This raises the question: why is capital flow in this vital sector so sluggish?
Dhirani notes that while investors are eager to support sustainable ocean projects, they require clear guidelines and trusted standards to make informed decisions. Without robust regulations and credible data, private financiers remain hesitant. As Oliver Withers from Standard Chartered aptly pointed out, the high seas present unique governance challenges due to their lack of national jurisdiction.
The Investors’ Perspective: Seeking Sustainability
As consumers increasingly look for eco-labels on their seafood, investors are doing the same with aquaculture businesses. Certifications like ASC serve as crucial indicators of a company’s commitment to sustainability. According to Dhirani, frameworks such as ASC help reassure investors that a seafood business is genuinely invested in sustainable practices.
The ASC label not only signals compliance with environmental and social standards to consumers but also acts as a vital component of risk assessment for institutional investors. In alignment with the Taskforce on Nature-related Financial Disclosures (TNFD), ASC is gaining recognition as a tool for assessing both social and environmental risks in global aquaculture portfolios.
Financial Implications of Neglecting Sustainability
As environmental regulations tighten globally, seafood farming operations that neglect sustainability risk significant financial ramifications. Beyond the risk of non-compliance with emerging regulations, these operations may find themselves excluded from capital streams increasingly tied to demonstrable environmental and social impact.
Notably, sustainability has become essential for maintaining a ‘license to operate’ in the seafood farming sector. Companies that embed sustainability in their business models are likelier to weather market shocks and regulatory changes. Dhirani emphasizes that aligning with evolving regulatory frameworks is critical for long-term investors; companies adopting ASC standards may see enhanced resilience and reduced sustainability risks.
Pathways to Sustainability Improvement
For aquaculture farms that are not yet ASC certified, there are paths available to demonstrate progress toward sustainability through initiatives like the Improver Programme by ASC. Dhirani notes that impact investors understand that certain farms may be transitioning and may not yet qualify for certification. However, engaging with the Improver Programme allows these farms to credibly show their commitment to sustainability, potentially meeting impact investors’ criteria.
The Rise of Nature-Positive Investing
As the financial landscape shifts toward nature-positive and climate-aligned investing, tools such as ASC certification become increasingly essential. Aquaculture businesses have the opportunity to align themselves with responsible investment practices, whether through full certification or participation in improvement initiatives.
Dhirani concluded on a hopeful note, mentioning the innovative financing models emerging at events like UNOC and BEFF, particularly from financiers focusing on developing countries. These developments point to a bright future for sustainable aquaculture and investment.
