An environmental, social, and governance (ESG) report filed by Chinese fishing company China Ocean Group Development has been described as “shocking” for its lack of material disclosures.
Since 2021, any company listed on the Hong Kong exchange is required to file an ESG report annually. But, China Ocean Group Development offers little detail on its operations in its 2023-2024 report, filed as part of the requirements of its listing on the Hong Kong Stock Exchange, said François Mosnier, head of the ocean program at Planet Tracker, a London, U.K.-based think tank.
“It is a shocking ESG report for a seafood company and a great example of ‘greenhushing’ – when corporate management teams underreport or hide their sustainability credentials in order to evade investor scrutiny,” Mosnier told SeafoodSource. “In the ESG report of a seafood company, I would expect to see at least some vague references to what, how, and where seafood is harvested.”
Mosnier pointed to one specific passage in the report – “As a non-manufacturing company, the group and its daily operations have no significant impact on the environment and natural resources” – as being particularly egregious. In the report, China Ocean describes itself as “primarily involved in the business of supply chain management services and ocean fishing.”
“[It] shocked me, as it completely denies the reality of the impact of fishing on natural resources,” Mosnier said.
There is no reference to fuel used by the company’s ocean fishing activities in the report.
“The key sources of air and [greenhouse gas] emissions of the group include the consumption of petrol for group-owned passenger cars and purchased electricity for office use, as well as from freshwater and sewage processing,” it said.
Mosnier said an ESG report should disclose any company operations that have significant impacts on the environment. Both positive and negative information should be presented to provide an unbiased and objective picture of the group’s performance on ESG issues, he said.
“As the report then goes on to list water resources management as one of the two issues most material both to management and stakeholders, I was getting ready for an encouraging level of disclosure and transparency,” Mosnier said. “Oh well, maybe next year.”
China Ocean did not immediately respond to a request from SeafoodSource for comment, nor did HKEX, which runs the Hong Kong Stock Exchange.
In 2020, the company falsely claimed it had signed a memorandum of understanding with Mercado Común Del Sur (MERCOSUR) to build a pelagic fishery base in Ecuador. A statement issued by MERCOSUR’s press office and sent to SeafoodSource said no agreement existed. In 2022, China Ocean Group claimed it had entered a joint venture with Indonesian fishing firm PT Kanzun Bahiriyah Sentosa to fish in Indonesian waters, but Kanzun later denied that claim. China Ocean didn’t respond to inquiries from SeafoodSource regarding either claim.
China Ocean has also faced financial difficulties in the past. Trading in the company’s shares on the Hong Kong Stock Exchange was suspended when the firm failed to publish its 2022 audited results, and the company’s auditing firm, Reanda Lau and Au Yeung (HK) CPA Limited, tendered its resignation.
The company supplies multiple seafood species to wholesale clients in mainland China. In January 2022, it issued HKD 98 million (USD 12.5 million, EUR 11.1 million at the time) worth of new shares. China Ocean said it was badly impacted by the pandemic because its distant-water vessels were unable to get their licenses approved and renewed due to lockdowns.
