Presenter, “Framework for Translating Ocean Risk to Investment: A Salmon Aquaculture Case Study,” Ocean Sciences Meeting, San Diego, California, January 2022.
Ocean data is essential to responsible financing in the blue economy. Quantifying the ocean risk that marine operators face can unlock new forms of risk transfer and investments into historically overlooked ocean businesses. To date, there has been minimal private equity footprint in salmon aquaculture, despite it being a highly profitable sector. This is because the volatility of ocean-driven risk is difficult to navigate without ocean expertise.
We developed a global farm model to simulate the market, biological, and ocean dynamics for over 3,500 Atlantic salmon farm sites. Alongside farm production, our global model can track site-level sustainability metrics, starting with emissions intensity relative to earnings.
These insights equip institutional investors, such as pension funds and private equity, with the ability to make the three-dimensional tradeoff between risk, return, and impact in a highly specialized industry. Salmon aquaculture offers ESG and impact investors an attractive opportunity to enter the blue economy while increasing the availability of a low-carbon protein.
Leaders in the salmon industry have demonstrated a commitment to address environmental impacts and concerns around social license. Moving towards better data transparency, collaborating with feed companies to reduce upstream greenhouse gas emissions, and prioritizing fish health to minimize mortality losses are just some of the efforts this industry has undertaken.
Our model provides a framework in which impact investors can start to engage and act as a positive lever to set standards for the sustainability and transparency of the industry. The application of well-modeled and constrained ocean conditions to quantify the financial risk of investments is an important step in broadening the blue economy.
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