(an experiment from the May workshop)

Experiment team: Giles (FFF), Andrew (IEEP), Sandy (ClientEarth), Aniol (NEF)

Assumption: more transparency can lead to the behavioural change of companies, through multiple strategies (divestment, shareholder action campaigns, etc.)

Assumption: Making information about value at risk; social/environmental performance public can drive change in companies’ behaviour. This change happens via multiple strategies (i.e. campaigns, shareholder action, promoting a blue divestment movement; making fund managers/analysts that some companies face a huge risk and this needs to be taken into account when advising to invest; etc.) which could not take place without this information.

Assumption: It is possible to link marine ecosystem deterioration with companies’ financial value.

Assumption: It is possible to compare multinationals globally on a range of social & environmental criteria.

Note: we use the term “transparency” to mean: bringing to light new information-data about the activities and practices by marine industry/companies. This information might be provided voluntarily or revealed by third parties.

Marine industries often operate in an unregulated environment and if it’s regulated, it’s not effectively enforced. They are hardly ever hold accountable for any env. and social impacts.

The long-term stability (and value) of certain marine industries relies on a healthy marine ecosystem (i.e. fisheries; tourism; etc.). In these cases, the deterioration of the marine environment could have direct impact on the value of the companies

There are other industries whose value or stability is not directly linked to the quality of the marine environment (i.e. energy; extractive; transport; etc). But their value can be affected through the reputation they have with consumers, investors, etc. For example if they are perceived to disregard environment and social factors.

We agreed that the scope of this work should focus on big multinational companies (i.e. companies that are on the stock market or likely to be affected by financial markets) and should have a global dimension. Although it would be worth exploring regional contexts.

We agreed to focus on companies that directly operate in the marine environment (i.e. fisheries, aquaculture, energy, aggregates, shipping, tourism).

We recognised the role that non-marine related industries can play in driving change on marine related companies when directly sourcing from them. But these fall out of the scope of this experiment.

How would you design an experiment to test the Hypothesis?

Experiment (in 2 months) is a scoping strategy that will focus on testing if it is feasible to:

  1. Bring to light how marine industries perform on the environmental and social front.
  2. Identify the “Value at Risk” for marine industries from Marine ecosystem deterioration.

Focus on big multinational companies operating:

  • directly in the North Sea region (sea and coast): food (fisheries, aquaculture), energy, aggregates, tourism, shipping)
  • indirectly (focus on root causes, such as plastics)

Questions to answer in two months:

  • Has anyone done this before? Is there any ongoing action?
    • On transparency
    • On “value at risk”
    • Are there protocols that could apply to marine industries? Reporting.
  • How would we go about delivering this project?
    • Identify key industries
    • Identify comparable objective and parameters - what information is available?
    • Identify what extra information is needed?

Pre-enactment

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NOTE: In retrospective it seems that the pre-enactment did not fully capture to key elements of this proposal (above) such as the “value at risk” angle or the “exposing or bringing to light certain practices”.

Stakeholder feedback:

  • It’s a bit green & fluffy, wanting a lot with commercially sensitive information, without making a clear point. Work on clarity of your information.
  • Is it feasible?
  • Left feeling 'so what'
  • There is too much emphasis on process and benchmarking
  • Think about infrastructure, costing and who bears responsibility
  • You’re asking too much (material, information) and creating more work
  • I’m quite suspicious of the organisations and their credibility
  • It would be difficult to work with you due to conflicts of interest
  • I wonder about your funding and I’m concerned about your capacity
  • Oceans are big… Would this project actually have the stated impact?
  • What have other transparency projects have achieved?
  • You need to make the process easier
  • We would need to agree on standards for data presentation and a neutral platform
    • It must be done as a neutral, credible, high standard to be taken seriously
  • Think about how you talk to people (whether stakeholders or others), avoid preaching and pay attention to their body language.

Implementation

What is the experiment? Test the feasibility of using transparency of marine industry practices as a lever for change. Find out if anyone has done anything like what we are trying to do, how would we develop transparency set of indicators, information available and evidence of effectiveness.

  • Determine key environmental indicators, look at other initiatives, learn lessons on what works. Scope and map.

(How would you know if it has worked? Evidence from similar approaches being successful/effective in driving change; availability of information/data to apply this approach/model to the marine context; environmental-social indicators identified & key marine industry sector identified to put this idea into practice)

  • Giles circulates FFF work on North sea limits work
  • lessons other initiatives:
    • Sandy on climate and chemicals
    • Aniol: more initiatives
    • Heather: palm oil - give information to Aniol
    • will ask for ideas and initiatives that others the group know of before end of May
  • Share initiatives between the participants to analyse; discuss early July or end of June

I - Scoping existing practices/initiatives (ALL)

  • Has anyone else done anything like this before?
  • Is there any ongoing action on this front?

II - Learning from similar approaches (Lead: Aniol / Sandy)

  • What can we learn from similar initiatives (i.e. deforestation; animal welfare, etc).
  • What is the criteria used by funds/banks specialised on sustainable investment?

III – Shaping up the project (Lead: Giles / Andrew)

  • Identify relevant industries.
  • Identify comparable parameters / indicators
  • What are the key environmental indicators we need to know for which sectors?
  • What information is available and what information is needed?
  • Select one industry to focus on to test this approach

By the end of the 2 months we hope to have enough information to decide if – and how – we take this initiative forward.

  • Phone call on 3rd of June at 8.00 am to discuss progress to date and next steps. Note: time of call might change to 4.30pm (tbc).
Needs
  • information supply:
    • knowledge about other initiatives?
    • information about the success/effectiveness of other initiatives
    • publicly available information on how companies behave
Documentation and communication
  • communication via email
  • updates on the wiki (with email alert)
  • the group will meet at 8am 3rd of June to discuss progress
  • They have a clearer plan re. task management

Notes

  • 12 May 2015 - request for existing transparency initiatives
  • 8 June 2015 - progress so far
    • We have found several examples of transparency initiatives covering a broad range of sectors (clothing, animal welfare, deforestation, palm oil, worker’s rights, etc.)
    • There are also several transparency initiatives related to the marine environment; and a growing number of projects making new data available.
    • Several use satellite technology to reveal where an activity takes place (i.e. deforestation, fishing, oil spills) and their intensity. Others take existing data and make it public.
    • Some of these initiatives have a clear purpose or target such as change the policy of practice of a particular company (i.e. Nike with worker’s conditions) others are purely putting the information out there for others to use in whichever way they think is best.

Summary of discussion 8 JUN 2015

While there is a growing number of initiatives making more data and information available we have come to the conclusion that:

  • the information is not always exploited to drive change within the marine industry.
  • the information collected is not relevant or in the right format to drive change.
  • there are still information and data gaps that need to be filled.

In this context, MarCoLab’s could make the following interventions:

  • Maximise the potential of existing information (i.e. repackaging it in different ways).
  • Provide input and guidance to some of these initiatives to ensure the information generated is in the right form to achieve a particular target.
  • Identify key gaps and work to fill them.

In order to make things more manageable we agreed to focus on two key sectors:

  • Shipping / Transport (Giles and Andrew)
  • Fisheries / Aquaculture (Sandy and Aniol)

We will structure our work in two phases:

  • 1st phase (until 25th June) – Mapping
    • What transparency related initiatives/projects are out there in the seafood-shipping sectors?
  • 2nd phase (25th June – 5th July) – Brainstorming
    • Taking into account the existing information available:
    • What could we do with this data to maximise its potential for change?
    • What guidance could we provide to these initiatives to make them more likely/effective to drive change?
    • What additional information would be required?
    • Answering the questions for phase 2nd will require defining the changes we want to see (i.e. phasing-out overfishing from the supply chain; improving worker’s conditions; etc.) and what is the intervention we want to make (i.e. synthesize data and make it available to investment analysts; fund managers, consumer groups, etc.).

Other key point

The idea of replicating the “Carbon tracker” initiative for Marine related industries (i.e. linking market value of a company with state of marine environment) looks quite challenging and it is probably very difficult to put it into practice with the existing information. We think it is a powerful idea worth revisiting at a later stage.

The outputs of this exercise will inform a more detailed proposal to take forward this initiative.

Actions:

  • Sandy/Aniol + any other keen MarCoLab members to work on questions re: Seafood sector
  • Giles/Andrew + any other keen MarCoLab member to work on questions re: Shipping sector
  • Phone call on 22nd June to review progress and agree next steps.
  • MarCoLab members to tell us if they want to join us in our discussions more formally and take part in next phone call (22nd June).
  • Giles to talk to the Shipping Sustainability Initiative.

How do any results collected during the experiment support or refute your hypothesis?

Expected results

Observered results