A new fund plans to catalyze more than USD 100 million (EUR 91.1 million) worth of investments in fisheries improvements by 2030.
Launched at Seafood Expo Global (SEG) 2023 by the World Wildlife Fund and U.K.-based impact investment advisory and fund manager Finance Earth, alongside industry partners, the Fisheries Improvement Fund (FIF) will establish and manage the fund, which will work through repayable finance to bring together industry players to attract public and private capital.
The development of a new global financing model aims to provide the assurance of full funding of fisheries improvement projects from their creation through to sustainable certification, in response to FIPs often struggling to secure sufficient or consistent funding that could ensure better outcomes.
WWF U.S. Senior Director of Blue Finance Lucy Holmes said at SEG conference session that with the world’s oceans under threat and a 70 percent contraction in marine biodiversity over the past 50 years, radical and innovative solutions are needed to support recovery efforts of the world’s fisheries.
“One of the biggest drivers of that decline has been over[fishing] and unsustainable fishing, and as the demand for seafood grows, unsustainable fishing practices are putting a huge strain on the oceans and coastal ecosystems. Most fish stocks cannot take any additional pressure, and over one-third are being fished beyond their limits,” she said. “These issues have also extended into the increased prevalence of human rights and labor violations across seafood supply chains.”
With these threats also affecting people and livelihoods, as well as hurting businesses invested in the seafood sector, Holmes said global fishery stakeholders must forge a new path forward.
“In that direction, the size of the prize is great,” she said. “Well-managed fisheries can produce more seafood, and they can be worth more economically. Targeted investments have the ability to turn fisheries around, but despite these promising fundamentals, our oceans and these fisheries remain at the bottom of the pile for investment.”
FIPs, Holmes said, are a key tool for fisheries recovery and a proven model moving fisheries to a more-sustainable footing, with over 150 such improvement projects ongoing worldwide.
“They are outcome-driven, they drive real change on the water, and they are highly replicable,” she said. “This makes them a perfect tool to structure financial innovation around.”
In attracting repayable finance and tapping into those markets where capital is available, the design of the new FIF model focuses on overcoming some of the main historical challenges faced by FIPs, including fragmented and inadequate funding for the life-cycle of an entire project. Through the new project, FIPs will receive full funding from the outset through volume-based fees upon which offtake companies and supply chain actors agree. These fees will enable the FIF to pay back the upfront FIP finance and also create long-term revenue streams. This more reliable alternative can also expedite projects that help scale up fisheries reform while simultaneously safeguarding dependent coastal communities and enabling supply chains to source more-sustainable seafood, Holmes said.
Holmes said FIPs will benefit from a shift in receiving support through companies’ often-constrained corporate social responsibility (CSR) budgets, to companies embedding FIP funding into the cost of the product, therefore maintaining the resource viability critical to supply chains.
“We’re really excited by this as it’s a clear example of how companies are starting to internalize environmental costs instead of externalizing the environmental issues or passing responsibility down,” she said. “That is something we hope that others will follow. We see this as a global opportunity.”
A pilot for testing the FIF concept is underway, and this FIP will be public soon, Holmes told SeafoodSource. The project has already secured capital commitment to pay for its upfront costs through a program-related investment (PRI) instrument.
Finance Earth has issued a call for proposals from fisheries that may be interested in seeking funding through the new system. It’s open to fisheries currently in or not yet in FIPs.
“We are in a climate emergency, we’re in a biodiversity emergency, and we have an estimated USD 4 trillion [EUR 3.6 trillion] gap to reach our nature recovery objectives over the next two decades, so philanthropic and public funding is not going to be enough. We can’t continue to operate in past models that look at ad hoc credit payments or CSR budgets,” Finance Earth Director of Advisory Business Elizabeth Beall said. “We really need to be looking at integrating the cost of sustainability into the daily operation of business and also localizing more private capital.”
The hope is for the pilot to prove that FIF is a model that works for a range of different corporations in different geographies and in different parts of the supply chain, Beall said.
“The model is very flexible – it has the flexibility to bring in different actors in the supply chain and can also adapt to different geographies, different fisheries contexts, and different volumes. That ability will be a key part to scaling this,” Beall said.
Aquafeed firms Skretting and Cargill confirmed their support for the new finance model at SEG and will also take part in the pilot. As participating companies, they will commit to the volume-based fees, and Cargill Aqua Nutrition Sustainability Program Lead Dave Robb said the offtake agreement seems to work from a business perspective.
“I’m really looking forward to the first opportunities and seeing how to develop this because we still have more fisheries to engage with,” Robb said.
Skretting Global Sustainability Manager Jorge Diaz said he believes this new way of working with FIPs presents companies with an opportunity to increase the effectiveness of such projects.
“One of the main challenges that we have sometimes seen in the past is that we engage in FIPs, but their progress is not what we would have expected because other stakeholders become not as engaged as they were at the beginning,” Diaz said. “We are hopeful that this new way will work.”
Mars, a manufacturer of food products and animal care services, has committed USD 1 million (EUR 911,456) to FIP funding over the next five years through its pet nutrition department. Mars Petcare Global Sustainable Sourcing Lead of Fish Andrew Russell said the mechanism not only allows the company to collaborate with other businesses, but it also allows it to focus on how it can source from stable, sustainable fisheries.
“We see this as just the start,” he said. “It’s definitely scalable – potentially spreading across the globe and helping other fisheries that need it. It’s a chance for us to accelerate improvements.”
The new fund also has the support of organizations including Costco Wholesale, Sodexo, Rabobank, and the Walmart Foundation.
Photo by Jason Holland/SeafoodSource
