10 ESG Investments for 2021 - Part 6

Don’t waste fish

Andrew Willis 29 April, 2021 | 4:47PM
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See last week's ESG investment for 2021 here

Andrew Willis: It’s time again for Morningstar Sustainalytics’ “10 for 2021” – which presents investors with 10 ESG investment themes that can positively contribute to advancing United Nations Sustainable Development Goals. In this series, we’ll feature a new development each week so that you can ‘create impact through thematic investing’.

In the fishing industry, we have a very sharp double-edged sword of technological innovations and increased capacity… Fish are no match for our improvements in efficiently scaling the business. We’re now in a situation where around 90% of fish stocks globally are classified as overexploited, fully exploited, depleted… or near a state of collapse.

While it’s difficult to find sustainable sources of seafood, we’re leaning towards fish farming as a way to make a meaningful difference. Farmed salmon is a good place to start because it’s a controlled link to the wild. At present, many fish farms still rely on wild fish stocks to convert into feed – remember…fish eat...each other… And we estimate that if we don’t reduce the amount of wild fish our fish farms are consuming, the price of fish oil – and fishmeal – will increase 72% to 92% by 2030.

Fish farms working hard to improve costs and sustainability, however, with a front-runner right in the Faroe Islands. Salmon farming giant, Bakkafrost (BKFKF) has a vertically integrated model – and control over its supply chain – which is a step in the right direction on reducing our footprint in the ocean.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bakkafrost P/F57.00 USD1.75

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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