Data Dashboards

Dashboard:
The Japanese Wild-Catch Seafood Industry

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  • Data methodology
    • Planet Tracker analysed a group of 41 Japanese publicly traded companies active in the seafood business with a combined market capitalisation of $134 billion in 2019. These companies have over 2,900 subsidiaries.
  • FX Rates
    • FX rates translated automatically via FactSet during download.
  • FAO (2018)
  • The State of World Fisheries and Aquaculture 2018: Meeting the sustainable development goals.

Key terms / Ownership definitions

  • An ultimate parent company is the top company in the corporate hierarchy. The ultimate parent company has a controlling ownership in all other companies (subsidiaries) in its hierarchy, giving it control of their operations. While controlling ownership has many different definitions and nuances, in this context, controlling ownership of an entity by an individual or other entity is determined purely by that individual’s or other entity’s total direct ownership percentage share of the entity.
  • The level of control the ultimate parent company exerts depends on the amount of managerial control given to subsidiary managers.

An open-end fund is a mutual fund that can issue unlimited new shares, priced daily on their net asset value. Net asset value (NAV) is the value of a mutual fund that is reached by deducting the fund’s liabilities from the market value of all its shares and then dividing by the number of issued shares. NAV is calculated after the close of each trading day.

Exchange Traded Funds (ETFs) are funds traded on a stock exchange. Most ETFs track the performance of a stock or bond index (such as the FTSE 100 or S&P 500).

A pension fund is an investment product into which scheme members pay contributions in order to build up a lump sum to provide an income in retirement. This money is invested in a suite of themed funds – much like other funds, just run specifically for retirement savers.

Variable annuities give buyers a chance to benefit from rising markets by investing in a menu of mutual funds offered by the insurer. Variable annuity funds give investors access to potential higher returns than fixed annuity funds, but also higher risk.

A closed-end fund is a portfolio of pooled assets that raises a fixed amount of capital through an initial public offering (IPO) and then lists shares for trade on a stock exchange. Like a mutual fund, a closed-end fund has a professional manager overseeing the portfolio and actively buying and selling holding assets.

Investment management buy, sell and manage financial assets and other investments. Investor managers can also include banking, budgeting and tax services and duties.

A private investment fund is an investment company that does not solicit capital from retail investors or the general public.

A unit investment trust (UIT) is an investment company that offers a fixed portfolio, generally of stocks and bonds, as redeemable units to investors for a specific period of time.

Planet Tracker analysed a group of 41 Japanese publicly traded companies active in the seafood business with a combined market capitalisation of $134 billion in 2019. These companies have over 2,900 subsidiaries.

  • Recent decades have seen a steep decline in Japan’s seafood production which peaked in 1985 at 12.8 million tonnes and has since decreased by two thirds to 4.3 million tonnes in 2017 (3.3 million tonnes wild-catch and 1.0 million tonnes farm-raised).
  • The principal reasons for this decline are overfishing, climate change and changes in consumer consumption patterns.
  • Japan’s share of global seafood production has been impacted by overfishing as a result of growing competition from other nations. This has caused Japan’s share of global wild-catch fish and aquaculture production to fall by 85%, from 13.4% in 1985 to 2.2% in 2017.
  • Overfishing poses serious financial and reputational risks, not just to Japanese wild-catch companies, but to the investors and credit lenders who finance them. Currently investors have limited ability to tell whether the companies they finance are sourcing wild-catch fish sustainably or not.
  • Japan’s Ministry of Agriculture, Forestry and Fisheries’ annual survey revealed that wild-catch fisheries reached a record low of 3.2 million tonnes in 2017. Ocean-farmed fish output also fell to 985,000 tonnes, a 4.6% drop from a year earlier. Together, Japan’s fisheries catch was 4.3 million metric tonnes in 2017.
  • If Japanese fisheries were managed sustainably to achieve their maximum sustainable yield, the global industry could earn an estimated $51 billion to $83 billion extra every year, part of which would transition back to investors and credit lenders.

Investors should use the dashboard to push for greater transparency, traceability in seafood companies, as well as inform the adoption of policies that support the sustainability of wild-catch stocks to mitigate the risk of overfishing.

  • Investors and credit lenders are unable to tell whether the companies they finance are catching fish from sustainable fisheries. There is no widely adopted mechanism to obtain public and independently validated data on the source of fish that is caught or purchased by seafood companies.
  • Fish stocks can, in theory, be endlessly harvested if they are sustainably managed. It means that the growth and yield of specific fisheries and these fisheries’ risks, should be viewed accumulatively and in the long-term, to coincide with sustainability and planetary boundaries.
  • Sustainable management of global seafood stocks requires full traceability of catches, including the type of fish, from which fisheries the catch was derived, when, by which vessel and under which quota.
  • Overall biodiversity within a fishery needs to be calculated because of the large variety of species that all contribute to an ecosystem. In the past, overfishing has often been masked because species were aggregated in catch levels.

  • Seafood companies, asset owners, credit lenders, regulators and governments all have a part to play in creating sustainable wild-catch fisheries and sustainable profits for seafood companies.
  • Seafood companies can:
    • Secure Sustainability Certification: Demonstrate global leadership by transitioning towards full certification by internationally recognised standards
    • Adopt full traceability: Carry independent observers and/or vessel monitoring systems (VMS) on all vessels to record catches.
    • Report Operations Transparently: Beneficial ownership of subsidiaries and related vessels and transport and processing infrastructure.
    • Adopt a Sustainability Policy: Implement and report against a credible sustainability policy, with independently verifiable performance.
    • Report in English: Publish annually all traceability, transparency, beneficial ownership, sustainability policies and sustainability performance data in English as well as Japanese so as to ensure that global financial data providers accurately report on their activities
  • Asset Owners and Credit Lenders can:
    • Require Sustainability Certification: Only invest in, and issue credit to, companies and fisheries fully certified by or transitioning towards internationally recognised standards.
    • Conduct Due Diligence and Monitoring: Assess companies annually to ensure they meet all sustainability requirements as set by the credit lender.
    • Mandate Full Traceability and Transparency: Request independently validated reports on when, where and by what method fish used by company operations have been caught and under which quota.
    • Establish Sustainability Policies: Ask seafood companies without sustainability policies to adopt and implement these in order to mitigate investment risks detailed in this report.
    • Adopt Sustainable Investment and Lending Principles
    • Mandate Vessel Ownership Disclosure: Require companies regulated by the Japan Financial Services Authority to annually disclose and publish any beneficial ownership in vessels and related processing and transport infrastructure by their company.
    • Require transparent sourcing for wild-catch fisheries.

  • Planet Tracker is a non-profit financial think tank aligning capital markets with planetary limits. It was created in 2018 to investigate the risk of market failure related to ecological limits, focusing on oceans, food & land use and materials such as textiles and plastics. Planet Tracker intends:
    • To generate breakthrough analytics
    • To redefine how financial and environmental data interact
    • To change the practices of financial decision makers to help avoid ecological collapse

  • Perfect Storm was funded by The Finance Hub, the Gordon and Betty Moore Foundation, which was created to advance sustainable finance, the Levine Family Foundation, the Oak Foundation, and the MAVA Foundation.
  • The Fish Tracker Initiative investigates the impact that financial institutions have in financing global wild-catch fisheries and seafood trade. Our aim is to align capital markets with sustainable fisheries management. Fish Tracker is a part of the wider Planet Tracker group of Initiatives.

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