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/F87.60 USD2.52

About Author

Andrew Willis

Andrew Willis  is Content Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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