Sustainable Fisheries Investment - Balancing Catch Shares & Fishing Communities
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One of the major opportunities that exists for socially responsible investors is investment in the sustainable fisheries sector. causing devastating effects on marine ecosystems and the local communities that depend on this resource.
There has been much discussion regarding the best way to implement comprehensive sustainable fisheries management practices. Within the U.S. the re-authorization of the "Magnuson Stevens Fisheries Management Act" mandates some form of annual catch limit or "CAP". The NOAA is recommending the use of a "Catch Share, or transferable quota system, for all major fisheries to help address this challenge.
This has been a highly controversial topic. At one end stand environmental NGO's and the NOAA advocating a quota system as the most viable approach to fishery stewardship. On the other end stand the commercial fishermen and their communities that are concerned about the effects that migrating their fishery to a quota system will have on their future.
Problems include:
• A dramatic reduction in the number of local jobs and vessels
• Large corporations buying up or leasing a high percentage of the available quota
• Quota lease and purchase prices becoming too high and therefore unattainable or unprofitable for smaller vessels
As evidenced by current ITQ systems, both sides of this debate have reasons to be both supportive and concerned. Over the next two years all major fisheries within the U.S. will be migrating to some form of transferable quota system. There are, however, ways to balance the needs of the community and the environment with the funding vehicles that support stewardship and the community.
Such funding vehicles include:
• Community Fishing Associations (Fisheries COOPS)
• Fisheries Trusts
• Community Quota Entities (CQE's)
From an investment perspective, the purchasing of Catch Shares does offer opportunities for potential capital gains, however we believe that this is not where socially responsible investors should be focusing. Many foundations and environmentally focused organizations have invested capital into the funding vehicles above to focus their support on both fishery stewardship and local communities. Organizations such as The Cape Cod Fisheries Trust, The Island Institute and Ecotrust either have or are creating various funding vehicles that, amongst other functions, will purchase quotas and lease them out at below market rates in an effort to support local fishing communities and allow access to those who were not allocated quota. Investors receive either below market rate or market rate fixed returns by placing capital in these types of funding vehicles.
My company, Mission Markets Inc., is creating an electronic transactions and communications platform that will support investment and trading in emerging social and environmental sectors, including sustainable fisheries and the facilitation of Catch Share transfers and leases. We will not, however, support speculative investments in Catch Shares.
For further information please visit our Mission Markets website.
- Mike
Mission Markets operates a private investment exchange facilitating transactions within the social and environmental capital markets. The Mission Markets platform provides companies and organizations with access to funding and impact investors an efficient way to evaluate, invest in and monitor sustainable investment opportunities.
