At Bonafide, we have made it our mission to contribute to a more sustainable food supply by better utilizing our oceans’ resources.
Sustainable investment and fish in global food production
Why is sustainable fish increasingly important in overall global food production? Here is a short explanation, which clearly shows the impending problems of the future:
The table below illustrates the benefits of farmed fish as a more sustainable source of animal protein. It depicts the resource intensity of different sources of animal protein in relation to the resource intensity of farmed fish. The three indicators used to measure the ecological impact on land, water and air, clearly speak to the superiority of farmed fish. Particularly in comparison to red meat.
To better understand the importance of resource intensity you should know about the prognosis by the FOA (Food and Agriculture Organization). The FOA predicts that global food production will have to increase by 70% by 2050 in order to feed earth’s growing population.
Given the state of our already strained ecosystems, it seems more than likely that meat prices will ultimately have to adapt. Resource intense protein will potentially be unaffordable for many. Less-affluent consumers will then require suitable alternatives.
4 SDGs: Bonafide’s contribution to Sustainability
Overall, Bonafide contributes to at least four Sustainable Development Goals (SDGs) as part of its investment activity in the Fish & Seafood sector:
- First and most notably, Bonafide supports the preservation of marine biodiversity (14) through its aquaculture investments. In order to do so we significantly reduce overfishing of popular food fish and avoid problems by catch.
- Zero hunger (2): A healthy, marine fish population, in turn, serves as an important source of food and income for the local population in impoverished countries.
- On the company side, enabling investments in modern facilities that increase productivity (12) and
- reduce water use (6), is also part of our contribution to the SDGs.
Fisheries and aquaculture are integral to sustainable development. Sustainable fish farming is playing a vital role in achieving the objectives set out by the 2030 Agenda.
There are strong linkages between the SDGs, which you can see in this article’s title picture. It is clearly demonstrating one important thing to keep in mind: Achieving those 4 goals mentioned above will have positive knock-on effects that are felt across society. Apart from this, SDG 14 is dependent on good progress being made towards the other closely related SDGs.
The investments of Bonafide have relevance to successfully achieving SDG 14. In addition to marine biodiversity, SDG 14 also includes targets to:
- reduce marine pollution,
- protect aquatic ecosystems,
- minimize ocean acidification,
- develop scientific capacity relevant to fisheries, and
- improve the implementation of international law pertinent to the sustainable use of oceans.
Our Sustainable investment principles from 2020 onward
Going forward, we plan on paying even closer attention to the issue of sustainable fish farming in our investment universe. To that end, we hired additional personnel to conduct sustainability research. We also integrated additional investment hurdles aimed at promoting sustainability into our investment process, as outlined in the graphic below.
Henceforth, to qualify for an investment, companies must first pass a sustainability-based exclusionary screening. Fish farming and aquaculture companies that are involved in waling or violate one of the ten sustainability principles of the UN Global Compact will no longer be eligible for investment by Bonafide.
In addition to that, ESG ratings will now also be taken into consideration as part of the investment process. To calculate the ESG ratings, companies are evaluated by our partner ISS ESG based on up to 100 environmental, social and corporate governance indicators.
With a weighting of 50%, most emphasis is placed on environment factors as part of the rating. Missing data entries do not result in a lower rating in order to not disadvantage smaller companies with fewer resources for data preparation.
Initial efforts targeted at increasing the coverage rate for our portfolio were highly successful. This resulted in a doubling of the coverage rate, which currently stands at close to 100%.
Long-term, the objective will now be to work towards raising the ratings of portfolio companies. However, the ESG integration is still in its infancy and rating requirements very much in flux. So we expect this to be a more gradual process. For the time being, the illustration below gives you an impression of the much-improved availability of ESG ratings for our biggest fund, the Bonafide Global Fish Fund, and for the investment universe as a benchmark.
Lastly, we also plan on intensifying our sustainability-related engagement efforts. As a first step, we formalized our active ownership guideline in the document Active Ownerhip Principles / Active Ownership Grundsätze. Starting in 2020, we also plan on reporting on our engagement and voting activities more regularly.
To emphasize our efforts and commitment surrounding the implementation of sustainability into our investment process, we currently also work towards having all our funds ESG certified by 2021. To that end, we want to make the Eurosif Transparenc Code / Eurosif Transparenz Kodex available to you. It will provide you with additional information regarding sustainability at Bonafide.
And for those who are interested, more regular news updates concerning sustainability at Bonafide are now also part of our monthly fund reports.
Please, share your thoughts with us in a comment below. We are looking forward to answering you immediately. What is your opinion, will sustainability play a decisive role in investment decisions in the future or are we already there? Can sustainable investments achieve a better return than conventional investments?
Here are some interesting sources on the topics of sustainability and sustainable fisheries for you to check out: