Compiling data on 160 publicly listed seafood companies and 3000 shareholders, researchers conclude that introducing sustainability criteria into bank loan agreements and stock exchange listing rules will significantly reduce pressure on seafood resources. Photo: K. Hellmig/Azote

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Banking on a better seafood industry

Hardly any bank loan to industries within fisheries or aquaculture includes demands for a more sustainable business approach. Doing so could significantly reduce pressure on seafood resources

Story highlights

  • Review of publicly available information from 2008-2017 found no bank loan to seafood companies that included sustainability criteria related to depletion of marine resources or poor working conditions.
  • With half of external finance for businesses, on average, coming from bank loans, introducing sustainability criteria into loan agreements is a critical lever to reduce pressures on marine ecosystems and improve practices in the seafood industry.
  • Likewise, sustainability criteria in the listing requirements of just four stock exchanges would impact the majority (57%) of the largest listed seafood companies in the world.

The financial sector is waking up to its role in steering businesses towards sustainability, but making new visions operational remains a challenge. In the seafood industry, two reforms in the finance sector have the potential to accelerate action, according to new research published in the journal Science Advances.

Compiling data on 160 publicly listed seafood companies and 3000 shareholders, the researchers conclude that introducing sustainability criteria into bank loan agreements and stock exchange listing rules will significantly reduce pressure on seafood resources. The paper was authored by several centre researchers together with colleagues from the University of Birmingham Business School and the Faculty of Economics and Business at University of Groningen.

Centre PhD student and lead author Jean-Baptiste Jouffray says, “Almost 90% of the worlds fisheries are fully exploited or overexploited, and demand for seafood is projected to grow 70% by 2050. Yet when we reviewed almost a decade of media information we could not find news of a single bank loan to the seafood industry that included sustainability criteria.”

Jouffray and his co-authors note that while numerous green bonds and other impact investment tools have emerged in recent years, they represent less than 1% of global financial flows. The Principles for Responsible Banking, launched in September 2019, show that the financial sector is slowly acknowledging its role in future sustainability, but operationalizing the six principles will take time. As pressures on ecosystems mount, what is needed are new norms and regulations that can redirect traditional financial services.

Green finance initiatives are good, but what we really need is a green finance system. We propose a radical and deliberate transformation of how seafood sustainability is integrated into traditional financial services – either at their own initiative or via regulation.

Jean Baptiste Jouffray, lead author

The power of banks

Bank loans are a main way seafood companies finance their operations, according to the research. Loans always come with loan covenants – agreements between a lender and borrower stipulating terms and forbidding the borrower from some behaviour.

“By incorporating sustainability criteria into loan covenant and binding companies to sustainable practices, banks could play a key role in promoting rapid transformation towards sustainable practices, not just in seafood but across all soft commodities” says Beatrice Crona, also a centre researcher and co-author of the paper.

She adds that “the rapid growth of sustainability-linked loans proves this can be done, but such criteria need to become mainstream.”

Stock exchanges as gatekeepers

The study also highlights that the majority of publicly listed companies among the world’s 100 largest seafood companies, are listed on just a handful of stock exchanges. The Tokyo Stock Exchange alone concentrates 53% of the combined revenue of listed seafood companies, while the largest four (Tokyo, Oslo, Korea and Thailand) together account for 86%.

“More stringent sustainability criteria in the listing requirements is a key way by which stock exchanges can act as gatekeepers and promote sustainability” notes Emmy Wassénius, another co-author and PhD student at the centre.

The paper illustrates such potential with an example from 2014, when a Chinese seafood company keen to expand tuna fishing in the Pacific, attempted to raise up to US$200 million on the Hong Kong stock exchange. The share float was cancelled when the risks to fish populations were discovered to have been understated, and therefore represented an undisclosed risk to investors.

Shareholder activism

Shareholder activism is a third lever the researchers investigated, but found its influence may have limitations in the seafood sector, even though it has been promoted as an important way to influence corporate governance. While the majority of large seafood companies are privately owned, the analysis shows that even for the publicly listed ones, no single investor has substantial shares across many different seafood companies. Shareholder activism therefore appears to currently hold limited leveraging power for financial institutions to encourage sustainable practices in the seafood realm.

Pressure from civil society organizations and the general public will be important to improve awareness and stimulate financial responses that can not only complement but also promote existing governmental, market-based and corporate efforts towards increased sustainability, the authors conclude.

Leverage points for seafood sustainability. By integrating sustainability criteria into their investment decisions, loan covenants, stock exchangelisting rules, and shareholder activism have great potential for incentivizing seafood companies toward better practices. Sustainability criteria should focus on,e.g., the absence of forced labor and IUU fishing activities, the status of fish populations and ecosystems, as well as transparency and traceability throughout the value chain. Click on illustration to access scientific paper.


The paper uses a mixed-methods approach combining content analysis, qualitative examples and descriptive statistics to explore leverage points for sustainability in the seafood-finance nexus. First, a content analysis of two prominent media outlets specialized in seafood formed the basis for a synthetic analysis using the Weberian notion of “ideal types” to classify firms according to their scale of operations and their ownership structure. This served as a useful heuristic for mapping where different financial mechanisms are most salient along a seafood firm’s development trajectory, and where sustainability leverage points may lie. The authors then relied on qualitative examples identified during the content analysis to illustrate the mechanisms and highlight how sustainability could be taken into consideration. In the case of shareholder ownership, for which quantitative data were readily available, they conducted descriptive statistics to unpack the shareholding pattern of 160 listed seafood companies and more than 3000 shareholders.

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Published: 2019-10-02

Related info

J.-B. Jouffray, B. Crona, E. Wassénius, J. Bebbington, B. Scholtens. 2019. Leverage points in the financial sector for seafood sustainability. Sci. Adv. 5, eaax3324

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Jean-Baptise Jouffray is PhD student looking at cross-scales driver interactions in marine social-ecological systems.

Emmy Wassénius’ research focuses on understanding systemic risks in food production and trade.


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