“How is it possible that we could have a world in which all of the United Nations’ Sustainable Development Goals are underfunded but the one concerning the ocean and, therefore, 70 percent of the Earth is the most underfunded?”
David Bennell, the managing director of investor relations at Frisco, Colorado, U.S.A.-based financial services NGO Transformational Investing in Food Systems (TIFS), asked himself that question in 2022, and it spurred him to begin formulating a smarter approach toward attracting investors to blue food projects.
Founded in 2020 by members of the Global Alliance for the Future of Food, TIFS aims to increase investments in agroecological and regenerative food systems.
The focus in its first few years was just on agriculture, but Bennell and TIFS quickly realized that a vital component of the world’s healthy food systems lies in the oceans and on aquaculture farms. In 2022, they redirected their focus to include more blue food projects.
“We understood that just terrestrial land-based food production only covers a portion of the Earth, and many people are left out of the conversation if we don't include the blue space,” Bennell said.
TIFS initially lacked expertise in marine investments, so the company formed a partnership with Michael Conathan, an ocean policy consultant with almost two decades of experience in the space. Since then, they have jointly tried bridging the gap between investors and innovative blue food projects.
"While there's a lot of capital out here in the world looking for a home and there are a lot of worthy people, companies, smallholders, and small and medium enterprises that need funding, there's a massive gap and lack of connectivity [between them]," Bennell said.
One particular focus of TIFS has been aquaculture and its potential to provide the growing global population with a healthy source of protein, but this focus has run into some roadblocks, according to Conathan, especially in the U.S., where regulations on aquaculture are strict and have stifled investment.
“We do not want to create the traditional animal agriculture in the model that big corporations have created around pigs, cows, and chickens while turning a blind eye to some of the externalities that come with it,” he said. “We know the technologies exist, we know the business practices exist, and we know that at the end of the day the product is better and desirable. It's a ‘new old’ industry, but it's a new version of an old industry in this country; we can build it however we want.”
Though Conathan and TIFS have used that pitch as a leading selling point to investors, they have still struggled to get funders on board, especially as many U.S. aquaculture businesses are in the early stages of development and, therefore, investors would have to be in it for the long haul.
“We're in a situation where what the industry needs is an infusion of capital that's OK just sitting and trying it out with a likelihood that, [eventually], investors are going to get some return – maybe not at a super high level of return, but a moderate level of return compared to guaranteed zero financial return if you just give it away through traditional philanthropy,” Conathan said.
Steve Waddell, the founder of Bounce Beyond, an NGO that promotes social justice initiatives, echoed Conathan's point that long-term investment, which is difficult to sell, is needed in the space, requiring an entirely new outlook on blue food investment to achieve at scale.
“These big challenges require some way of transforming finance to be able to support systemic change because current finance system values are incompatible with community and environmental well-being,” he said. “Currently, capital is rewarded based on eroding social capital, communities, and environmental capital. We've got to change the reward system for investment to be able to support the long-term well-being of the world.”
According to Bennell, that systemic overhaul makes for a pretty compelling sales pitch.
“Nature is the perfect system. The oceans are a perfect system,” he said. “So, in a world that has been created in a beautiful system, I think we're discovering it's fairly irrational to continue to try and operate in this system in exclusively linear ways.”
Nevertheless, he concedes that convincing people to take a systemic approach, in which measurable financial returns are not the sole focus, can be an uphill battle. To begin easing investors into the idea, TIFS has been arranging roundtables and participating in seafood expos, trying to connect the people with money to those with ideas.
"There's an element of what we try to do in these dialogues that have rational, well-moderated civil conversations of people who don't always agree with one another but try to find mutual intersections where people can agree," he said.
