Impact investment looks to push seafood industry toward sustainability
Diverse funders discussed ways to draw capital into the seafood industry in ways that promote sustainability, highlighting a need for smaller-scale investments that tend to perpetuate sustainable fishing practices.
Speaking at a plenary session on Tuesday, 6 June at the SeaWeb Seafood Summit in Seattle, Washington, U.S.A., Hoyt Peckham, president of SmartFish Group, an enterprise that incentivizes sustainable artisanal fishing in Mexico, said the problem is not a lack of capital in the industry, but a top-heavy distribution of capital.
“This figure, USD 1.2 billion (EUR 1 billion) available for this blue economy fisheries’ transition, means there is a lot of capital out there…But we’ve detected a big gap in this critical range between about USD 50,000 and USD 1.5 million (EUR 44,000 and 1.3 million), which is critical for those small, community-based ventures,” Peckham said.
Answering Peckham’s challenge to provide small-scale investment was Kelly Wachowicz, the managing partner and CFO of Catch Invest, which, among other projects, works to support coastal U.S. fishing communities as well as finance fishery transitions in developing nations.
Wachowicz said a new initiative associated called Impact Blue aims to help fisheries transition past the liminal state where it is difficult to get private investment.
“We propose creating a project development program that can start with projects in this intermediate stage of management and advance them sufficiently to de-risk them so that private capital can play a role in project implementation,” Wachowicz said.
Wachowicz pointed out that smaller businesses often struggle when grant money tails off and the company isn’t large enough to easily attract private capital. She said one of the ways to deal with gap is by bundling similar ventures to create more robust figures.
“Investors don’t want to deal with small-scale start-ups because it costs so much money to evaluate a proposal, and to only put up a few dollars, it’s very hard to pay for the time it takes to evaluate that opportunity,” she said. ”One of the things we’re doing to deal with scale is develop this set of projects in a bundle so we can bring it to investors. Each one may only by USD 200,000 or USD 500,000 [EUR 175,000 to 445,000]…but that aggregate might be USD 10 or 20 million (EUR 9 to 18 million].”