­A collection of notes related to the transparency experiment and transparency initiatives Other notes on Sustainable Seafood

The SSF Initiative seeks to use the leverage of financial institutions (FIs) as a way to improve the transparency and sustainability performance of international seafood companies. FIs are supported to better identify and manage risks (particularly in relation to overfishing and IUU fishing) across their seafood investment portfolio and to apply sustainability criteria in their investment decision making to catalyse improvements in the companies that they invest in.

This project is currently in a pilot phase. Consultations with FIs, seafood companies and NGOs have led to the collaborative design of a Toolkit for use by FI's in partnership with seafood companies. Testing of the transparency tool is now underway between Rabobank and one if its major seafood client companies. The SSF Toolkit is composed of the:

  • The SSF Transparency Tool provides FIs with insight on the extent to which seafood companies can identify and classify whether their vessels and seafood supplies comply with laws and regulations, and with claimed aspirations of sustainable performance.
  • The SSF Improvement Tool supports FIs in engaging seafood companies to measure and qualify the risks that are classified by the transparency tool. It then provides terms for reducing the risks to recognised sustainability performance of corporate fishery management.

The SSF is currently also engaged in an initiative that aims to scope and test a Seafood Transparency Index, as an alternative method for increasing transparency.

The data disclosed during the use of the SSF Toolkit will be confidential between the FI and seafood company. However, it is expected that using the SSF Toolkit will increase the willingness of seafood companies to become more transparent. Most FIs see public transparency as a key element of the sustainability performance of their clients and will pressure them in that direction.

In the event of the development of Seafood Transparency Index, the data obtained would be made public, and presented to allow a comparison of the sustainability performance of seafood companies.

A first pilot is currently underway and the results are pending. Other banks have shown interest in the SSF Toolkit, but remain cautious. Outcomes of the SSF to date suggest an increased awareness of FIs on the risks posed by IUU (to marine ecosystems and their investments) and by human trafficking and slavery at sea. The interest/appetite across a number of FIs (13) for this initiative appears to be growing.

  • FIs are increasingly applying sustainability criteria to their lending decisions and are expressing interest to increase the sophistication of current binary decision making tools.
  • The SSF targets those seafood companies that are not sensitive to government regulations and market instruments such as MSC.
  • The SSF goes beyond benchmarking, it seeks to support performance improvements and is focused towards outcomes for marine ecosystems in the water.
  • Current emphasis of the SSF is on wild capture fisheries, but interest has been expressed to look at the potential of this Toolkit to be adapted to aquaculture investment portfolios.
  • The lack of transparency itself is a significant challenge. The large international seafood companies are in general privately owned, and are not required to be transparent about their operations at sea, including their sustainability performance, meaning that little information is publicly available.
  • Awareness amongst FIs, although rising, is still very low. FIs have limited understanding of their exposure to risks through their seafood portfolio. Some FIs are aware of the sustainability risks they are exposed too but feel they are insignificant overall due to the small size of seafood portfolios, or short investment timeframe.
  • Agreement on the governance of the tool, who will fund the cost of the sustainability improvements and audit of the application of the SSF Improvement Tool, can become a challenge.

Partners: Fauna & Flora International, North Sea Foundation, Synnervate, Scomber, Rabobank International and WWF Netherlands.