Editor’s Note
This article highlights a critical gap in corporate governance, as investors warn that opaque supply chains in the seafood industry expose companies to unmanaged environmental, social, and financial risks. The lack of traceability plans underscores a broader need for transparency as a business imperative.
Almost three-quarters of large seafood businesses have not set out plans to improve their supply chain traceability, which investors argue is leaving them blind to significant potential risks.
The FAIRR investor network, backed by firms managing more than $90trn, this week set out the results of its attempt to engage seven of the world’s largest seafood companies on risk management.
Four of the companies have now committed to improving supply chain traceability – up from two at the last FAIRR-led assessment of the sector. The companies with commitments are Maruha Nichiro, Mitsubishi, CP Foods and Thai Union.
But most are not able to prove they are turning commitments into action. Some are even still using paper-based records rather than digital approaches. Two of the seven (Nissui and Marubeni) have disclosed no implementation strategy or milestones at all. A further three have produced plans, but FAIRR deems them inadequate.
When asked why they were struggling to improve supply chain visibility and traceability, the companies cited fragmented data, species mixing during handling and complex supply chains.
FAIRR is working with WWF‑US to provide capacity‑building sessions to the seafood industry. But, in the meantime, it is concerned that the sector is leaving itself vulnerable to risks relating to overfishing, marine habitat loss and human rights issues. And, if the companies do not measure and disclose these risks, investors are not able to make appropriate decisions.
The global seafood industry generates $1.8trn per year, equivalent to 2% of GDP. These profits are at risk from unsustainable business-as-usual practices.
Planet Tracker estimates that investing just 1% of seafood sales into traceability could lift industry profitability by 60%.
To date, FAIRR noted, many firms have relied upon sustainability certification schemes to provide a guarantee of traceability. The Marine Stewardship Council (MSC) and the Aquaculture Stewardship Council (ASC) are the most widely adopted schemes.
FAIRR argues that this approach, while important for tying products to a certified producer, does not provide granular information across the entire supply chain.
It is calling on companies to position and prioritise traceability as a core tool for risk management. In doing so, they should move from top-level commitments to credible implementation strategies.
