Salmon production is fast approaching the practical physical limits permitted by current coastal farming methods, putting investors at risk, says non-profit financial think tank Planet Tracker.
Producers in the farmed salmon sector face significant environmental threats such as climate change, disease, sea lice and harmful algal blooms. Compounded by issues such as collapsing wild-catch feedstock fisheries, the industry and its investors face considerable financial risk of increased environmental constraint-based losses and price volatility.
Planet Tracker estimates that if historic trends continue and ecological health continues declining, production of coastal farmed Atlantic salmon to 2025 may be 6% to 8% lower than predicted, equivalent to US$4.1 billion. This is particularly significant for the industry’s highly-concentrated investor pool, with the top 20 accounting for over US$15 billion in holdings.
If it is to continue to grow, the industry will eventually need to expand beyond intensive coastal farms, either to off-shore closed caged systems or to inland recirculating aquaculture systems, both costly endeavours.
Planet Tracker recommends that farmed salmon companies should, by the end of 2020, report on compliance with environmental regulations and industry guidelines; report on an effective environmental and social management system (ESMS); deploy remote electronic monitoring systems; increase R&D spending and strengthen control of independent transparency auditing.
Similarly by 2021, investors can help manage their exposure by requiring companies to present and publish effective ESMS; advocating for marine spatial planning; applying consistent methodologies and standards and providing an updated log of all salmon losses.