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Report: Banks Must do More to Safeguard Food Industry from Sustainability Risks

New research from Global Canopy, developed in partnership with the World Wildlife Fund (WWF), has found that banks operating in South East Asia and parts of Latin America stand to benefit from improving policies to manage the negative environmental and social impacts of beef, soy, palm oil and seafood production. WWF has valued goods and services from the ocean economy at around $2.5 trillion each year, with SE Asia set to produce a quarter of the world’s seafood by 2030, a core sector of the blue economy.

However, despite some safeguards against labor rights issues, none of the 24 banks in the region assessed have a seafood-specific lending policy. According to the aforementioned research, this contrasts with the eight large global banks that have operations in SE Asia, including Deutsche Bank and Standard Chartered, which all have some form of sustainability policy on seafood. Banks can upgrade their policies to include seafood and make the most of the opportunity that sustainable seafood represents now and in the future.

“While there are encouraging signs that regional banks are starting to act in areas such as labour rights or palm oil, there is still a long way to go. The majority of banks assessed do not have adequate seafood and soft commodity policies to seize the opportunity of financing the food security of tomorrow,” said Raj Kundra, vice president of international finance at World Wildlife Fund.

In the case of palm oil, the research found that almost 30% of SE Asian banks assessed now have a specific policy to govern lending to companies in the palm oil sector, and two have introduced innovative financial incentives to palm oil companies to be more sustainable.

The findings emerged from a new package of support added today to Global Canopy’s SCRIPT (the Soft Commodity Risk Platform), which was launched in April and aims to help banks and investors analyze their exposure to risk in soft commodity supply chains. The guidance and policy tool have been developed to meet the needs of banks in South East Asia and Latin America and to minimize the environmental and social impacts of their loan books. Financial support for the project has come from the Gordon and Betty Moore Foundation.

The Future of Seafood Sustainability

In November 2018, the World Benchmarking Alliance announced its plans to assess the 30 largest seafood companies globally against the United Nations Sustainable Development Goals. A public evaluation of their draft methodology took place throughout December.

Aviva, Index Initiative and the United Nations Foundation launched the World Benchmarking Alliance (WBA) of business, nonprofit, and government organizations in late September to develop free, publicly available benchmarks that rank companies on their contributions to achieving the UN’s SDGs. These 17 goals were adopted in 2015 by more than a dozen countries and serve as a blueprint for addressing global challenges over the next decade.

In May 2018, Red Lobster, the world’s largest seafood restaurant company, announced a partnership with the Monterey Bay Aquarium Seafood Watch program to help make better seafood choices for healthier oceans, now and for future generations. The partnership builds upon Red Lobster’s existing Seafood with Standards commitment to serve only traceable, sustainable and responsibly-sourced seafood.

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