Jeremy Crawford on Panel at UK’s “Financing the Transition to a Sustainable Blue Economy”

On July 10th, the Prince of Wales International Sustainability Unit (ISU), held a conference entitled “Financing the Transition to a Sustainable Blue Economy”, where the premise of discussion was centered around saving the world’s oceans as an investment opportunity.  This was in relation to a recent report by the ISU that details a framework for fisheries in transition to being more sustainable as an investible proposition, whereas a fishery that is sustainably managed generates significantly more value than if not.  Thus creating a financial return for investors, while at the same time providing ecological and social benefits.  Likewise for fisheries to make that transition significant investments are needed, much more so than what is currently available.  In theory, an investment in natural capital provides a win-win situation for both the fishery and the financier achieving environmental, social and economic goals.

I had the unique opportunity to be on one of the panel discussions entitled, “Investing in Fishery Recovery: Creating a Pipeline of Investible Projects”, to talk about the blue swimmer crab fishery and the experience of fishery improvement projects (FIPs).  Organizations such as EDF and 50in10 have been interested in the blue swimmer crab fisheries since last year because the progress that these FIPs have made, the nature of the fishery itself, and the NFI Crab Council model for supporting supplier companies to implement FIPs have made for an attractive case study to test some of these financial tools as a potential low risk investment.

Enabling factors that make the blue swimmer crab fishery attractive for project partners and investors include that it’s a small-scale fishery, market-driven industry leverage is used in a positive manner to improve the fishery, and the blue swimmer crab specie itself (portunus pelagicus) is highly resilient (ie fast growing, reproduces a lot, and low migration).   The Crab Council has been supporting FIPs in Asia since 2009 based on a self-imposed levy of 1.5 cents per pound of every imported pound of crab meat to the United States, that is accumulated annually, and is the funding mechanism for local trade associations of processor companies to implement the sustainability initiatives.

Fishery management has been key to improvement regimes specifically within the areas of industry standards of minimum size, indicative of mature crab able to reproduce, and no-take of egg bearing crab.  Mature size crab in the catch not only represent a healthy resource, but also an economic upside where the costs associated in processing mature crab are significantly lower, and price incentives for the grade of meat and yield that it provides.  The fishery is relatively a small-scale fishery, typically under jurisdiction of the district or provincial government, which makes the bureaucratic process for implementing change a lot easier, and the benefits of improvement directly impact the fisher community.  Therefore, if the fishery is run in a sustainable manner there would be significantly more economic, social and environmental benefits.  Not to mention increased market access through being recognized as a sustainable fishery, perhaps through 3rd party certification schemes such as the MSC.

The NFI Crab Council continues to fund sustainability efforts in Southeast Asia while addressing potential barriers to healthy Blue Swimming Crab fisheries. With in-country partners, the Crab Council is identifying fishery needs such as comprehensive fishery data, local support for sustainability measures from local and funding sources. Fishery improvement requires participation from all parties who either regulate the fishery or benefit from it, and the Crab Council is working to coordinate these stakeholders.

During the conference the Prince of Wales said, “Economy and ecology do not have to be locked into an irreconcilable struggle. We know from many examples around the world that the transition towards sustainability can deliver a wide range of economic, social and ecological benefits. The transition to sustainable fisheries, therefore, should be seen as a ‘no regrets’ investment. It requires capital today to ensure that these benefits exist tomorrow.”  The problem it seems is a demand issue, where there is a disconnect between what is seen as an attractive project to invest in, that is risk averse, and a financial model that would have an attractive return for investors and financiers.

The ISU report highlights three enablers for investment that provides the basis for increased value in a fishery:

  1. Secure Tenure aligns the incentives and empowers the fishing industry to pursue sustainable use of the resource and is a vital first step in the transition.
  2. Sustainable Harvest determines how much fish can be sustainably taken from the fishery and enables the creation of both management and investment frameworks.
  3. Robust monitoring and enforcement provide assurance that fishers will comply with sustainable management and reduce the likelihood of illegal activity that could undermine the transition.

These enablers have the potential to unlock greater social, economic and environmental value in fisheries.  If ignored, the fishery is at risk of undermining long-term viability.

Currently, fishery stakeholders need to persevere to address sustainability issues, put initiatives and policies in place that would instill confidence to investors.  This in turn would increase the level of awareness of issues in many capture fisheries, allowing for allocation of capital to make that transition happen.  At the same time get financial experts from the banking sector involved early on in projects, so that effective financial models can be put into place before it’s too late.  Hopefully this dialogue will continue, bridging the gap between the finance sector and fishery managers, and realizing that a sustainable fishery equates to a more profitable fishery.

Follow the link for a copy of the conference’s discussion document.