Investors at Risk from China's Distant-Water Fishing Practices: New Planet Tracker Report Calls for Urgent Reform and Sustainable Investment
30 Julio 2024 - 5:00AM
Business Wire
No country catches more seafood than China1. The massive
expansion of China's distant-water fishing fleet has come with dire
environmental and social costs, as the fleet often resorts to
extreme ways to enhance its low profitability. Planet Tracker's
latest report, Fishful Thinking, proposes a solution for financial
institutions and China to jointly address these issues.
Financial Fragility and Planetary Impact
A key first link of the global seafood supply chain, China's
distant-water fleet caught 2.33 million tonnes of seafood in 2022.
Through their investments in food producers and retailers, many
financial institutions are therefore unknowingly exposed to the
environmental and social harm it causes. Without urgent action,
this harm is likely to worsen.
Planet Tracker’s analysis reveals that the Chinese distant-water
fleet is in a precarious financial state, despite generous state
support. The 1,446 vessels analysed by the think tank generate an
average gross margin of just 14%. This has severe implications: for
instance, if they were to pay their crew standard Chinese wages,
squid vessels would suffer heavy losses.
Climate Change and Legal Pressures
Climate change poses a severe threat to the Chinese fleet's
profitability and sustainability. Its most lucrative tuna fishing
grounds in the Western and Central Pacific may see reduced biomass,
pushing tuna into less regulated high seas and potentially
increasing illegal, unreported, and unregulated fishing and labour
abuse.
Whilst very much needed, the entry into force of the WTO
Agreement on Fisheries Subsidies will further strain the fleet by
banning some subsidies, on which it heavily relies. China must
therefore act swiftly to reform its incentive system to avoid
further financial and environmental degradation, by incentivising
compliance and penalising damaging practices.
Proposed Solution: The 'Hai Feng' Bond
To address these challenges, Planet Tracker recommends an
ambitious transition funded by a RMB 5.5 billion (USD 759 million)
sovereign bond, the 'Hai Feng' (ocean abundance) bond. With a
target of financing 100% monitoring and traceability onboard the
Chinese distant-water fleet, this initiative would reduce the
industry's impact without damaging profits.
It would also foster a collaborative effort between investors
and governments to engage on sustainable practices. This is
essential for turning the tide on the environmental and social
harms caused by China's distant-water fishing fleet and would help
mitigate risks, support ocean health and secure long-term
profits.
This press release calls for immediate action and highlights
the crucial role of sustainable investment in mitigating the risks
associated with China's distant-water fishing fleet.
Read the full report
Explore the fleet
About Planet Tracker
Planet Tracker is an award-winning non-profit financial think
tank aligning capital markets with planetary boundaries. Created
with the vision of a financial system that is fully aligned with a
net-zero, resilient, nature positive and just economy well before
2050, Planet Tracker generates break-through analytics that reveal
both the role of capital markets in the degradation of our
ecosystem and show the opportunities of transitioning to a
zero-carbon, nature positive economy.
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1 World Ocean Review
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version on businesswire.com: https://www.businesswire.com/news/home/20240730966042/en/
Nicole Kozlowski, Head of Engagement, Planet Tracker
nicole@planet-tracker.org