Japan’s thriving seafood sector may not be as healthy as it appears, says new Planet Tracker report

Seafood, Financial Risk & Reward, Shareholder Engagement, Transparency & Traceability, Multi-Asset

Amid declining fish stocks and supply, financial think tank reveals why the growing risk exposure of Japan’s seafood industry is not being captured by the markets

LONDON, 24 March 2021. Between 2010 and 2019, overfishing and other anthropogenic pressures have caused an alarming decline in seafood supply in Japan.

Yet despite the deterioration of the very resources the industry relies upon, financial think tank Planet Tracker shows that the revenue, profits and market capitalisation of 70 companies listed on the Tokyo Stock Exchange and exposed to seafood have, in fact, grown in the same period. How is this possible?

In a new report published today, Planet Tracker debunks the myth that the Japanese seafood industry is thriving, revealing that the apparent financial health of the sector is largely the result of short-term measures to bypass natural constraints – such as foreign expansion, acquisitions, vertical integration, cost-cutting and de-leveraging.

Critically, the latter three measures are already reaching their limits. Deeper analysis of over 800 financial datapoints for each of the individual 70 companies analysed, found that those highly exposed to seafood, including seafood retailers, wholesalers and producers, are already suffering from natural capital constraints. At a time when the share of overfished stocks is at an all-time high, investors have begun to recognise these constraints and company valuations have been de-rated relative to their peers.

Indeed, seafood producers generate average gross margins 12 percentage points lower than the more general food producers, who are less exposed to seafood. The same margin gap is noticeable for seafood retailers/wholesalers, compared to food retailers/wholesalers and is slightly widening. What’s more, companies with the highest exposure to seafood have the highest exposure to very long-term debt: 91% of the seafood producers’ debt is due in 2030 and beyond, while visibility on fish production and therefore profit generation in the next decades is very limited.

The report’s author, François Mosnier, Financial Research Analyst at Planet Tracker said: “Across the 100 largest seafood companies globally, no other country is more represented than Japan. These large companies source globally, meaning their impact on the status of the world’s oceans is significant. The cracks that are starting to appear in Japan’s seafood sector are likely to have wider ramifications. Effectively, this analysis shows how the depletion of the natural world negatively impacts financials.”

He added: “Currently investors in seafood companies prioritise growth across five financial indicators: revenue, EBIT margin, operating cash flow, return on capital employed and valuation multiples. None properly reflect natural capital issues and ignore the looming financial threats posed to the sector by environmental pressures. A move to seafood volume-based metrics and implementing measures to protect the degradation could help transform the industry’s environmental and financial health in the long term.”

With this in mind, the report proposes a detailed transition strategy to align these five indicators with increased sustainability and better financial performance.

Japanese companies exposed to seafood should:

  • Understand how defying nature can result in lower revenue growth, margins, cash flows and ultimately valuations and ability to repay debt;
  • Implement sustainable growth strategies, such as closed-cycle aquaculture operations, sustainable feeds, plant-based seafood and lab-grown seafood, traceability solutions, and certified product, and reducing the footprint of bottom trawlers, bycatch, ghost fishing gear, environmental costs of aquaculture, and food waste.

Analysts, investors, lenders, bankers and insurers of Japanese seafood companies should:

  • Understand that corporate management teams can only outsmart nature’s constraints for a limited period of time
  • Engage with these companies on the ways to align revenue, profit and cash flow growth strategies with natural capital constraints
  • Discuss, design and structure financial tools that aim to reduce overfishing or improve the general sustainability of the industry, including reporting on volume-based seafood metrics and engaging with blue bonds or sustainability-linked bonds.

The full report, “Against the Tide: The Japanese Seafood Industry Confronts Nature’s Limits” is available here.

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Notes for editors


Planet Tracker is a non-profit financial think tank aligning capital markets with planetary limits. It was created to investigate the risk of market failure related to environmental limits. This investigation is primarily for the investor community where environmental limits, other than climate change, are often not aligned with investor capital. Planet Tracker generates breakthrough analytics to redefine how financial and environmental data interact with the aim of changing the practices of financial decision makers to help avoid both environmental and financial failure.

Find out more: www.planet-tracker.org


Seafood Tracker investigates the impact that financial institutions can have on sustainable corporate practices through their funding of publicly listed wild-catch and aquaculture companies. Its aim is to align capital markets with the sustainable management of ocean and coastal marine resources. Seafood Tracker is a part of the wider Planet Tracker Group of Initiatives.

Media contact

Ronak Anand

Moorgate Communications, a Finn Partners company


+44 20 7539 3578