Today, the 8th June 2021 is World Ocean Day, a day that aims to unite and rally the world to protect and restore our blue planet. This year, World Ocean Day is raising awareness and support for the global movement to protect at least 30% of the world’s lands, waters and ocean by 2030.
At Ethical Partners, we recognise this important day and join the calls for global action to restore the health and vitality of the ocean. Crucially, we acknowledge the vital roles of companies and investors to improve their practices in this area, in order to build resilient marine ecosystems and sustainable fishing practices, as well as to address our global biodiversity crisis.
Numerous of the SDG’s, which are another important part of our investment process at Ethical Partners, are also inextricably linked to ocean health, including SDG 14 (Life below water), SDG 6 (Clean Water), SDG 15 (Life on land), SDG 2 (No hunger) and SDG 3 (Good health and wellbeing). The targets for SDG 14 specifically directly address reducing marine pollution, protecting ecosystems, fishing sustainably, ending subsidies that contribute to overfishing, and conversing coastal and marine areas.
In addition, there is a huge role for the ocean to play in helping mitigate climate change as it is the biggest carbon sink on the planet, storing up to 93% of all carbon, making ocean health a critical part of the way corporates and investors address Climate Change and SDG 13.
As such, Ethical Partners aims to better understand and advocate for ocean health through our EPORA process, which includes assessing how companies address water, plastics and biodiversity risks across the ASX 200. We also have a deep commitment to, and active program of, engaging with portfolio companies on these issues. Worryingly, our recent EPORA analysis found that only 36% of companies even acknowledge biodiversity as a risk, and alarmingly, only 14% of companies disclose their practices and policies to reduce their impact. Similarly, our analysis found that only 36% of companies are addressing plastic waste specifically. There is even less attention to ocean health and water risks are still very much underappreciated across the market as a whole. There is clearly a lot more work for ASX companies to do to protect our oceans.
The recent Netflix documentary, Seaspiracy, has gained a lot of attention to the need to protect and save our oceans. The film investigates the role of commercial fishing in the increasing threat of extinction to the world’s fish and calls out the serious impacts of commercial fishing on biodiversity, the climate and humanity. It advocates for an end to fishing subsidies, for no-catch zones to be established, and for more people to take up a plant-based diet. The documentary sparks a lot of debate on the validity of some statements but when it comes down to it, overfishing is a global problem that needs to be addressed.
Two ASX companies that can have a large impact on the oceans through their usage of plastic and sale of seafood are Coles and Woolworths.
Whilst Seaspiracy casts doubt on sustainable fishing and certifications such as the Marine Stewardship Council, the United Nations has argued that there an important role for these certifications. Ethical Partners is therefore pleased to see that in this year’s Sustainable Seafood Policy, Woolworths has increased their commitment to sourcing their seafood from third-party certified, or independently verified environmentally responsible sources, with a target of 100% of own brand seafood ecologically responsible/sustainably sourced by 2025. They also have a long term ambition to have all wild-caught seafood certified by the Marine Stewardship Council (MSC) or equally credible certification schemes.
Similarly, we commend Coles for their work in this area. In FY20, they were awarded the Marine Stewardship Council’s Best Sustainable Seafood Supermarket in Australia for their responsibly sourced seafood program and since 2015, all Coles Own Brand seafood sold has been responsibly sourced. We would encourage both Coles and Woolworths to extend these programs to all their branded products as urgently as possible, and leverage their purchasing power to further impact our ocean health, and we continue to engage on this with the companies.
Seaspiracy also brings attention to the issue of plastics in our oceans. The documentary claims that fishing nets make up 46% of the plastic in the Great Pacific Garbage Patch whereas plastic straws account for just 0.03% of ocean plastic – and whilst both statistics are disputed for their accuracy, there is a still a significant message – that the levels of plastic from humans in the oceans is far too great and destroying fish. As there is an equivalent of a garbage truck load of plastic is dumped in the sea every minute, there is an obvious case for the detrimental impact humans are having on the ocean.
At Ethical Partners, we assess how all companies in our investable universe are addressing their plastics footprint, their waste management and their moves towards a circular economy model as part of our investment process and we also engage directly with our portfolio companies to improve their practices around plastic waste.
We are therefore pleased to note that Woolworths are continuing to remove single use plastic from their operations, as noted in their Sustainability Plan 2025. We commend them on their target of 100% of Own Brand packaging to be recyclable, reusable or compostable by 2023, and their work to provide more refillable and reusable packaging options. Ethical Partners continues to engage with Woolworths about extending these targets past their own brand products and into their wider supply chain, in order to leverage their large buying power to advocate for their suppliers to reduce their plastic use. We are also pleased to note that Coles have expressed a strong commitment to their packaging footprint: currently, their fresh produce bags are made with 30% recycled content, Own Brand spring water bottles are made from 100% recycled content and their 15c Better Bags are made from 80% recycled content, but importantly, they acknowledge that there is more to do in this space. It is important to commend both supermarkets on the removal of single use plastic bags and their movements to reduce plastic further. This movement is slower than the oceans need but it is still progress.
Finally, as Ethical Investors with collaboration with NGO’s as a core pillar of our approach, we also commend the work of WWF, Greenpeace and Seashepard in protecting our oceans and align with their advocacy to improve fishing practices, promoting responsible procurement and purchasing MSC and ASC accredited seafood.
As we acknowledge World Ocean Day and continue to learn about the detrimental impact humans are having on our oceans, Ethical Partners remains committed to broadening our focus on ocean health, water, plastics and biodiversity across our portfolio engagements and within the larger investor community. We also continue to engage for ASX companies to lead change in this space by reducing their plastic footprint, sourcing ethical and sustainable seafood, and devising reusable and refillable container programs.
Ethical Partners are pleased to see Australia take the next steps to implement mandatory climate reporting with the release of draft climate standards, which we provided feedback on.
Ethical Partners have continuously called for the provision of high quality, comparable data on company’s climate governance and carbon metrics, which we believe is imperative for investors to fulfil the potential of responsible investment.
Ethical Partners have been proud to have been active supporters of the TNFD Forum over the past few years, and to provide regular feedback on the development of the official TNFD recommendations, which were launched in December, as well as to be active members of the RIAA Natural Capital Working Group.