SeaPact

This Fall, SeaPact (www.seapact.org) will announce an opportunity to apply for financial assistance for improvement projects for seafood products.  The Sustainability Incubator will apply with a group entry that can include your company if you contact us by September 15.Screen Shot 2013-08-22 at 10.27.56 AM

Metrics for Social and Environmental Impacts

Yesterday I was pleased to give a presentation on metrics to competitors in the Fish 2.0 seafood business competition.  They are in the end stages of competing, and need to do a really good job of communicating their social and environmental impacts in order to qualify to win.

Social and environmental impacts are now linked to seafood business.  Companies can reduce negative impacts linked to their production or service delivery.  Companies can also generate positive social and environmental impacts.  I said this in the last blog, and it’s worth repeating.

There is sometimes a gap in understanding what directly a business can do to show accountability for and responsible stewardship of its impacts.  The fact is, seafood companies are not in the business of impact generation, but do of course contribute to real world impacts in the course of production.  This distinction is critical.  Seafood companies produce products and services ….and along the way can make changes in production to reduce negative impacts and to contribute to positive impacts.

In sustainability we are past the days of simple slogans and catch-all banners.  Nobody is single-handedly increasing biodiversity or recovering a fish stock.  Today it’s about demonstrating impacts to back up a sustainability claim.

The purpose of metrics IS NOT to make a big claim.  The purpose of metrics IS to help companies to communicate how they are contributing to social and environmental impacts while they are doing business.

A metric is simply a means of tracking something over time, that you want to change over time.  Often its performance that’s measured and usually with a number or a trend.  In seafood, where sustainability claims are rampant, claims attract this question: Where’s the proof?  A metric captures a change in performance towards a target set by your company, say in the number of shipping containers procured locally to capture any increases in local procurement where you’ve set that as a goal.

Impact investors naturally have a particular way of talking about impacts.  It’s actually a pretty good approach for seafood business too, because it breaks things down into pieces that fit day-to-day operations and strategic planning.

It goes like this.

1.  For every product or service your company makes -your Outputs- there are social and environmental Impacts.  Some good, others less so.

2. Taking action to steadily reduce business risks is a company trait attractive to all investors.  Negative environmental or social impacts are business risks.  To get started set a goal for the kind of Impacts you’d like to see in the world around your business and its type of setting.  Think big and stay connected to what you do.  For example maybe you’d like to see overfishing come down on seafood supplies.  That would be a great impact to contribute to.

3.  Now think about your actual business day to day.  Where could you take a step forward?  What can be accomplished in one year if you took that step everyday?   Set a goal for the kind of Outcomes you’d like to see inside your business in one year.  Now this step is not about the outside world its to plan for your own business results that you can control.  To contribute to a reduction in overfishing you can’t get on the boats (and what would you do if you could??) but you can make a commitment for the year to track the status of your wild capture supplies and their origins in the ocean.  Get a system going on a spreadsheet and start looking into it.  Getting informed will eventually make a difference with your buying decisions.

4.  Now, the crux of things is to think about how your everyday Outputs can be adjusted to get to the Outcomes you want.  Ask your vendors for information on species and fishing grounds and the kind of information that you need to start following what is going on at the fishing source.   Set a real time for this, maybe 1/2 to 1 hour a week.  If you can’t do it yourself then assign it to a staff person you trust to do it right.

5. The Metric is the change that happens over the year as a result of the business output.  Maybe you’ve committed to recycling more shipping containers and you can start to count exactly how many are saved from the landfill this year compared to last year.  If you’re trying to contribute to less overfishing in the oceans then the metric might be the falling percentage of your supplies from sources where overfishing is occurring.  Or the increasing percentage of your supplies from sources where the industry is making fisheries improvements.  Even simpler in year one is to track the proportion of your supplies that your vendors are able to report on — meaning they can tell you where the supplies were fished.  You’ll want to get to 100%.  But even showing some positive change over the year will create value for your business.

The value of the metric is to show improvement.  It’s not to claim full credit for an impact but to demonstrate your contribution with a stat that’s rock solid.  Changes/time trends are great metrics because they show the gains made from steady efforts toward a goal.  Measuring your performance against an outcome goal is a solid way to prove your company is on top of managing its supplies.  Investors like that.  Customers do too.  It shows you’ll have what they need when they want it.

Good metrics are a form of investment security.

A word of caution: metrics are not greenwash.  Above all else, there is absolutely no value in grabbing metrics that do not fit your production flow and core information needs for supply management.  Metrics that are a burden to your company quickly become a cost, and an empty column in a spreadsheet.

There are lots of other ways to approach metrics; it’s a very jargon-y subject.  But I recommend starting with the IRIS database of the Global Impact Investment Network, because they use standard definitions.  Keep your own outputs in mind while looking at the database.  Even if you don’t find a metric that is an easy fit, looking at the IRIS database may stimulate your creative thinking.  http://iris.thegiin.org

If you’d like to, you are welcome to watch or listen to the 27 August 2013 presentation, called Communicating Impacts with Compelling Metrics.  It’s available for download at http://www.fish20.org/news.

Aloha,

Katrina

Benefits vs Costs of FIPs

My company exists to make sustainability a profitable part of the seafood business.  It won’t happen all at once.

I don’t know that anybody yet has done a good job of scoping out the profitability side of fishery improvement and that is what we are doing, in real time.

Recently I’ve had my head down working on practical step-in costs for FIPs.  “Why would suppliers spend money on an improvement project, what’s in it for them?” somebody asked this week.

Benefits, I realized, need equally to be clear.  There are benefits to be realized immediately at every level of the supply chain.

Some examples of benefits to business from leading improvement projects for fisheries and fish farms:

 

Importers:

Keep selling to a given market;

Gain new markets and/or to get a better profit;

Improve long-term access to an important import supply;

Better product traceability makes it easier to respond to customer complaints and inquiries (health & safety, environmental, social);

Show progress on clear sustainability targets;

Show how negative impacts are prevented and business risks are reduced;

Attract impact investors and show fit to their portfolio;

Distinguish company’s reputation;

Brand support.

 

Exporters:

Increased or more stable orders;

Become a preferred supplier to importer partners;

Develop influence to improve long-term access to important supplies;

Website and cross-promotion for better reputation;

Closer relationships with buyers and vendors inside the seafood supply chain;
More secure supplies.

 

Fishers and Farmers:

Closer relationships with buyers;

More two-way accountability with buyers;

More stable demand and pricing;
More livelihood security;

Better communication with fishery regulators;

More influence on fishery rules through co-management;

Even playing field by getting everyone behind the same fishery management plan;

Prevent future conflicts over fishing access.

 

Clients come to us because they want to shore up important supply lines and show that the quality of their products meets high social and environmental standards.

Companies can reduce negative impacts, and they can generate positive environmental and social impacts.  Part of setting up a fishery improvement project successfully is to set up reporting that will communicate the participants’ contributions to impacts in a compelling and clear way.  This incentivizes fishery improvements by giving credit and new value to each business at every level of the supply chain.

Once a project is launched, the ‘measurement’ stage comes in.

Breaking this down, there is a launch period to set up the project credibly and there is a framing period to set up project reporting in a practical and effective way.  At the Sustainability Incubator our goal is bigger than setting up a project that checks off the boxes for other people’s needs (retailer buyers, NGOs).  We are here to help industry to set up improvement projects that create new business value.

A.  Project Launch.  To launch successfully means to set off in a direction with a clear target for reaching the place where sustainability intersects with profitability.   For fishery improvement projects that means we start out by launching in the direction of the Marine Stewardship Council.  We want the project to meet the minimum criteria used by Walmart and Sam’s Club as soon as possible, which means also meeting the credibility criteria published by the Conservation Alliance for Seafood Solutions.  That is important so the investment pays off with recognition and alignment with broader efforts for sustainable seafood.  But it’s a starting point not the end.

MSC certification may be a close or a distant goal taking 2 years or 5 years to prepare for.  Along the way if the project is managed right it will produce real evidence of your company’s contributions to social and environmental impacts.  This is definite, because the project brings vendors, fishers and fishery regulators together to move the fishery forward.

B.  Reporting.  Once the project is launched credibly, reporting has a two-fold purpose.  The first is obviously to capture the information that buyers are asking for to meet their company’s procurement specs for sustainable seafood.  In the FIP, any progress made against the 31 indicators of the MSC standard will be captured, for example.  Secondly it’s an opportunity to track progress on 2 or 3 targets over the first year.  To optimize the investment it is critical to watch a small handful of things that will also produce business value.

More on this to come, but we recommend spending some time to come up with a handful of simple metrics that you can use to start tracking your company’s contribution to social and environmental impacts.  Metrics that show change over time will capture day-to-day information that shows how your production  is serving sustainable seafood outcomes, like growth in the proportion of your supplies coming from fisheries that have been audited for sustainability or certified (MSC or BAP or a FIP or AIP).

Examples of some environmental and social metrics for seafood that can be measured from the beginning of an improvement project:

#partners participating in the project in year one (vendors, fishers, buyers, NGOs, government agencies)

%catch that is monitored by the fishery

%catch monitored at the species level

%catch managed at the species level with fishery reference points

%catch managed with ecosystem reference points

%supplies procured locally vs total procured / time

%supplies processed locally vs total processed / time

 

The industry is at a new stage where supply chains can show leadership on sustainable procurement.  There will be questions, and the best way for industry to respond to questions effectively is to have clear results in hand.  The results need to be verifiable, and that is why tools like metrics offer value.

Back now to costs.  The Sustainability Incubator helps get improvement projects launched credibly for under $10 k and within 6-8 months.  Probably the most important part of our work is the training to the supplier to operate the project independently.  It goes beyond helping the supplier to meet the minimum credibility criteria, to practical ways that add value to business.  Because costs have ceilings – there must be measurable value at every step.

I’m working hard for this, and I hope you’ll join us too.

Announcement:  SeaPact (http://www.seapact.org) will have an open call for applicants for funding for improvement projects in Fall 2014!  Call us if you’d like to join our group application for funding assistance for new projects.