Sustainability & fish farming: working with a real case

Aquaculture, such as fish farming, is a key industry to ensure  sustainable food production in the future. Foods deriving from the seas face many challenges such overfishing and water pollution. At the same time, sea food has many benefits such as low climate impact and high nutritional value.

It is quite clear today that wild fish supply is not sufficient and that aquaculture is necessary in some form in order to supply current populations with sea food. However, fish farming has been criticized for unsustainable practices through the years and the industry still struggles with some of them like sea lice, escapes and sustainable feed sources.

In the course I teach at NHH ‘Measuring sustainability’ we each year work with  a real case on how to measure sustainability. Last autumn, we collaborated with Norwegian Responsible Investment association Norsif on how we can measure and evaluate the sustainability of aquaculture companies. One of the things I love about these cases is the creativity the students show when coming up with new ideas and solutions. I truly believe this kind of creativity, combined with academic thinking and facts, is one of the most important skills we can teach students.

One of the learning points from working with the aquaculture case is how important national regulation is for sustainable fish farming. One of the drastic differences is the use of antibiotics. Aquaculture uses significant amounts of antibiotics, which is a critical issue considering antibiotic resistance, but the industry also shows that it can do without it when it has to, such as in Norway.

Another difficult issue is that fish farming in Europe is mostly done with omnivorous fish such as salmon. It is less efficient to raise fish that partly eats other fish than fish that only feeds on algea. Instead of feeding the salmon other fish, we could eat this fish directly and thus skip the step of raising the salmon. The fish in the feed can also lead to further overfishing. Of course we can feed salmon a vegetarian diet but salmon that are fed on vegetable rather than animal proteins may be lacking in Omega-3, which is one of the main reasons salmon are so healthy for a human diet. A better solution would be to instead farm a fish that naturally feeds on for example algea.

Another key issue for sustainability, the students discovered, is future orientation of the companies and investment in research to find sustainable solutions to issues we have not yet solved. During the course, we we’re visited by the head of sustainability and risk at Cermaq, Wenche Gronbrekk, who explained how the company works to address sustainability issues. Wenche has answered a few of my questions below and also describes their investment in future solutions: iFarm.

Sabina: The Norwegian aquaculture industry has made quite some progress in terms of addressing its sustainability challenges. What are, in your opinion, some of the main achievements? 
Wenche: We have made great progress in lifting the industry standard the past years through collaboration –  through dialogue and knowledge sharing between government, research and industry. Also, in the Global Salmon Initiative (GSI), addressing key issues such as standardization, feed ingredients and biosecurity. Vaccine development has also been key to advancing sustainability to the level we see today.

Sabina: Still, as we have learnt when working with this case, challenges remain. What’s on top of your to-do-list in terms of sustainability?
Wenche: Sustainability requires continuous effort, and we work every day to be better than just complying with minimum standards. Developing new solutions that address key problems is also a priority – such as our iFarm concept. It may solve many of the key challenges today through individualized treatment of each fish, increasing animal health and welfare, optimizing feeding and any need for treatment, which may in turn reduce the environmental footprint of our activities.

Sabina: Sustainability is, according to its definition, about the long term perspective, future generations even. Still most organisations operate with a shorter time perspective in their day-to-day business. How are you able to take the long term perspective into account?
Wenche: Salmon farming is largely dependent on taking a long term view – we operate in the sea and biological risks do not respect financial quarters. To have a business over time, our operations need to be sustainable in all aspects: environmentally, socially and economically. 

Sabina: Many who work as sustainability officers or even head of sustainability find that change management is crucial in order to conduct their work. Is this your experience as well?
Wenche: As a sustainability officer you need to work across the organization, break silos and in many ways be a change agent. Integrating sustainability in business strategy also means that many companies need to innovate their business model – and it is my experience that sustainability professionals often play a central part in this transformation.

A big thank you to Wenche and Cermaq for sharing your experiences with us and also to Norsif and Norsif member Folketrygdfondet and Tine Fossland who attended the students presentations and provided feedback on their evaluation models. We could not have done this without you!

When stakeholders oppose the company’s plans: the case of Schiphol airport

A key part of companies’ sustainability work is to communicate with parties that are affected by the company’s operations. This is generally called ‘stakeholder dialogue’ (see Edward Freeman’s definition from 1984).

Engaging local communities, environmental groups, customers and investors early on may prevent critic, and even boycott, of the business later on, when it might be too late to turn back. It can also provide valuable input and reveal opportunities. However, these different groups can, and most likely will, also have conflicting ideas and needs. So what can the company do when the stakeholders’ demands conflict with the corporate plans as well as with other stakeholders’ needs?

A NHH and CEMS student of mine, Elizaveta Sokolova, wrote her master thesis on precisely this issue. She used the case of the Dutch airport Schiphol and their stakeholders (local residents, regional authorities, the Dutch state, airlines, Friends of the Earth and more) to investigate how the airport handles the conflicting demands. The conflicts concerned for example birds that get in harms way around the airport, access to the airport and noise from the airport. Elizaveta found that even when the stakeholders do not disagree on the final goal, they can disagree on how to achieve the goals.

In Schiphol’s case, the stakeholder dialogue revealed the complexity of the issues. It also created a feeling among stakeholders that the problem is shared and only coordinated efforts can bring a solution. However, when the conflicts were too divisive, the airport decided to end, or at least limit, the dialogue. To read the full thesis, you find it here.

I asked Elizaveta, who also participated in the ‘Measuring sustainability’ course I teach at NHH, a few questions for the purpose of this blog:

You seem to have a keen interest in business and sustainability. What interests you most in this area? 

On the first glance, it seems that sustainability stop business from faster expansion and revenue growth. However, being more conscious of the impact that a business creates on people and environment allows to make the growth more sustainable, less dependent on external factors such as new policies or fuel/electricity/commodity prices. Finding examples of how this idea works in real life is what attracts me the most.

What is the main point we as readers can learn from your thesis?

The Schiphol airport example that I describe in my thesis shows that changing business towards sustainability and including diverse stakeholders for consultations is never easy: opinions vary. However, this approach leads to well-rounded final decision.

Writing the thesis, what was the main learning point for you personally?

For me personally, it was difficult to understand how to find a common ground on an issue when stakeholders’ opinions are literally opposite. The answer is: willingness to compromise and understand the opponent’s concerns.

Now that you have finished your master here at NHH, what are your plans for the future?

Now, when I have finished NHH, I am implementing the knowledge I got about stakeholder engagement in practice: I work at The Global Fund and deal with sustainability and transition. It requires a lot of negotiations and communications with different stakeholders, so the communication experience and theoretical background I got while working on the thesis is very beneficial.

Thank you Elizaveta for sharing your insights and good luck with your new job!