Intergovernmental panel on climate change is 95% certain that human activities are the main cause for the warming of our planet . The rapid change in climate is creating several losers – coastal communities, arctic mammals, farmers from the changing weather patterns – and will ultimately reshape human life the way we see it today. But when some loose, others win, in this case, disproportionately. As the arctic ice shrinks, sunlight will enter the arctic ocean which was previously dark. Fish that hunt by sight are expected to enter this ecosystem in record numbers and thrive on all the pristine food, which the arctic ocean is abundant .
So, who will benefit from this change? Salmon, Atlantic Cod, Mackerel and therefore one of the largest seafood companies by revenue – Maruha Nichiro (MN). However, this benefit may be short-lived given the industry’s tendency to overfish and deplete fish species in the Arctic. A critical challenge for Maruha Nichiro will be to avoid mistakes of the past and learn how to harvest this new resource sustainably.
Figure 1: Decline in Arctic Ice CoverageSource: NSIDC/NASA, “Satellite Observations“
Worldwide fisherman in many coastal areas rely on fishing as a source of income and also for sustenance. The industry is fragmented based on numbers, but concentrated in terms of value. While 16% of the catch goes to 13 companies globally, these companies control 40% of the valuable and bigger variety of fish . The industry is plagued with illegal fishing where rouge vessels catch endangered species of fish or catch beyond the allocated quota by fishing in international waters that are not carefully patrolled or trespassing on other nation’s waters. Such practices lead to overfishing and in the past, has depleted fish stock in certain areas. Fish stocks are seldom replenished; according to UN, 70% of the world’s fish species are either fully exploited or depleted . Now, with the arctic ice melting, global fish stocks for certain species will regenerate creating an economic opportunity for the fishing industry. This creates a challenge for the management of this company on how to best harvest this resource as a result of climate change.
Figure 2: Increasing Percentage of Overfished Global Fish StockSource: The Economist, “Getting Serious About Overfishing“
Maruha Nichiro, for the first time in history, joined by seven other companies, agreed on a commitment (seaBOS) to improve transparency in supply chain. The objective is to reduce illegal fishing, reduce antibiotic use in aquaculture, and reduce greenhouse gas emissions . A major driver for this cooperation is economic benefit for all companies. A recent study found that proper management of fish stock can lead to $53 billion in profit compared to the current trend . This seaBOS commitment is in the right direction, however unlikely to be enough to reverse perverse incentives to overfish.
There are several important questions for Maruha Nichiro management to consider. How will the aforementioned pact hold when fish stocks become accessible in the arctic? How do you balance the organization’s view on climate change versus taking benefit from the phenomenon? How do you convince competitors to cooperate and not destroy a fragile ecosystem that has already been destroyed once by melting ice?
My recommendation to management would be to take a series of steps that make their stance on this crisis clear and lead the industry by establishing a balanced approach to the issue at hand.
- Expand the seaBOS pact to include the arctic circle and quota allocation for fish stock in that region.
- Invest in research by supporting organizations that are involved in monitoring fish stock regeneration and partner with research institutes and universities to reduce or eliminate harm to the marine ecosystem in the arctic.
- Increase dependence on aquaculture by changing consumer perception by advertising and highlighting the benefits of farmed fish to the environment. Management will have to ensure that the investments they make in aquaculture don’t further increase greenhouse emissions for fish feed and instead use natural feeds.
- Design a robust system to monitor each member’s performance and strengthen current standards to reduce illegal fishing by also including companies from other major fishing countries such as China and Russia.
Ultimately, it is unrealistic to expect seafood companies to not harvest this new-found resource but doing so in a sustainable manner can prevent making the same mistake twice in the arctic. It is unclear how and whether management can bring China to the table which has a massive population that needs to be fed. Another concern is how investors will react to the company’s decision to optimize revenue for their long-term as oppose to maximize profits immediately.
 IPCC, 2014: Climate Change 2014: Synthesis Report. IPCC, Geneva, Switzerland (2014). http://www.ipcc.ch/pdf/assessment-report/ar5/syr/SYR_AR5_FINAL_full_wcover.pdf
 James Owen, “How Arctic Fish Might Benefit From Shrinking Ice,” National Geographic (December 17, 2015) https://news.nationalgeographic.com/2015/12/151217-arctic-ice-fish-predators-prey-animals-science/
 “Nine of World’s Biggest Fishing Firms Sign Up to Protect Oceans,” The Guardian, June 9, 2017. https://www.theguardian.com/environment/2017/jun/09/nine-of-worlds-biggest-fishing-firms-sign-up-to-protect-oceans
 Nick Nuttal, “Overfishing: A Threat to Marine Biodiversity,” United Nations Environment Programme. http://www.un.org/events/tenstories/06/story.asp?storyID=800
 Henrik Österblom, “International seafood business commits to stronger sustainability efforts,” Stockholm Resilience Centre. http://www.stockholmresilience.org/research/research-news/2016-12-14-international-seafood-business-commits-to-stronger-sustainability-efforts.html
 Christopher Costello, “Global fishery prospects under contrasting management regimes,” Proceedings of the National Academy of Sciences of the Unites States of America, October 14, 2015. http://www.pnas.org/content/113/18/5125.full