Three cheers it’s here!
Where 2015 was for hard work and experiments – places, people, ideas – 2016 is for joy. I am grateful for the perspective the new year brings. The Sustainability Incubator underwent changes and took on some core clients in the NGO sector in 2015: Monterey Bay Aquarium, Ocean Outcomes, World Wildlife Fund, Conservation International. This added dimension to our corporate services to Pontchartrain Blue Crab of Louisiana, Pier Fish of Massachusetts and others, including exporters and processors in developing countries. Starting to settle in on where we work best, we are building mutually productive relationships with our clients and network.
Big theme for 2016 is transparent traceability as a value-add, which means making it profitable not scary.
On a personal note, I would like to share something I have learned in the three years since starting the company. Initially, I thought positive ‘Impact’ would sell. If I could help companies to produce it, and show it, together we could strengthen their license to operate in the community and produce the return they seek. …but I could not have been more wrong! At least in the seafood sector until very recently, impact has lacked any measurable value. The gap in the market between words and action was/is still very wide. Thanks to the seafood NGOs it is starting to narrow.
It is still the case that the people who need a sustainability claim to sell fish are not the people on the hook to do the work to back it up, and it’s a serious disconnection. On the one end are importers direct-selling to retailers and on the other end are processors at the front end of the chain. Early on I thought, super, that’s a whole chain to work across. We did work to strengthen connections across supply chains to bridge it all up… connect the claim to the ground, walk the talk… It totally works. But, I was still trying to sell impact. It just doesn’t sell. Nobody was asking for it. Nobody needs to see it.
Why is sustainability such a big topic in seafood, then? Why so many NGO partnerships? To what end? I was very curious over this question in 2013/4. I looked into the different values of positive versus negative issues in the market. Fisheries improvements versus cleaning up illegal fishing. Both are needed to bring overfishing down for assurance of sustainable supplies. I asked, are companies driven more to reduce severe risks? Or, looking for accolades or something new to trumpet to their buyer? Are the market drivers different?
YES. But looking at the issues was only the tip of the ice berg. Any issue that comes up through an NGO partnership has to be dealt with. Why? Because the NGO partnership is a brand. If the retailer will buy seafood with an NGO name on it, that’s a slam dunk for a seller. What does it cost the seller? Remarkably little, to date. What does it cost the producer? Also, not much yet. With the NGOs holding on to the burden of reform, without actually having any stake in supply chains and seafood production (no ownership, other than the leverage of the brand–a topic for another blog)… is it any surprise that ‘impact’ has been off the menu? But that is changing. The costs of all of this set up were paid by investors, being philanthropic donors, who are still waiting patiently for their return.
2014/5 I looked into the differences between sustainable and ethical sourcing in the seafood sector, and discovered that the due diligence needs are entirely different. Few resources were available to seafood companies for due diligence for ethical sourcing, despite the layers and layers of NGO partnerships and sustainability programming.
We offer the Labor Safe Screen because it is the classic step 1 in due diligence, the risk ID step. It’s been a silly value proposition until now, because the elephant in the room is that nobody actually wants to know the details around where forced labor lives. Not yet. For me, the compulsion to develop the tools for due diligence for this issue came in 2012 from seeing how serious it had become for the US Department of State. Forced labor in fishing was a “Special Topic of Concern” in the 2012 Trafficking in Persons report and that started the clock ticking toward regulatory reform. When Thailand was dropped to Tier 3, the industry was told very clearly what was coming. In June 2014, US Ambassador Luis CdeBaca gave testimony to the Tom Lantos Human Rights Commission asking US companies to strengthen crime prevention in procurement, rather than wait for an eco-label to solve the problem. Companies can “drive out of a supply chain the patterns of vulnerabilities to forced labour”, he said. “Certifications and labels exist to inform customers whether seafood is sustainably caught, and yet, those seals-of-approval while fostering increased transparency and driving consumers to reward companies that engage in good corporate citizenship, they all seem to assume that the hands that pull the net, are not enslaved. We know that assumption is non-operative.”
Today, the evidence of forced labor in fishing is available to anyone online. There is a list of seafood products associated with forced labor on the US Department of Labor website. All of the data inputs are available freely through their new Sweat and Toil app, and in the country profiles. Additionally, in 2015 investigations into the issue were undertaken by the Presidential Task Force on Seafood Fraud and Illegal Fishing, the US Departments of State, Labor, and Justice.
My Ah-Ha moment in 2015 came when Cindy Berman, at the Ethical Trading Initiative, told me to stop making excuses for the lack of transparency and traceability loopholes for seafood. “Katrina, the companies who gather around this issue at ETI, they already have full visibility because they value it and consider it to be fundamental to their business model. It’s our starting point, and there is no moving forward without it.” Her statement cracked open my limited perspective. I like breaking big issues down into concrete steps and, trying to be realistic, I had fallen into advocating for full visibility as a some-day goal for this industry I care so much about. When it is not the right end game for us but the requisite first step.
There’s a formula. It works. You can see results in mining, apparel, logging, palm oil, and other commodity sectors with similar issues. Follow the OECD and UN operational principles for corporate responsibility to get through.
|OECD’s Five-Step Risk-Based Due Diligence Framework (Five-Step Framework):
1. Establish strong company management systems.
2. Identify and assess risk in the supply chain.
3. Design and implement a strategy to respond to identified risks.
4. Carry out an independent third-party audit of supply chain due diligence at identified points in the supply chain.
5. Report on supply chain due diligence.
There are very many end games in seafood. Frankly, some of them I do not want to know about! My end game is good relationships that produce value consistently. It is our guiding light. No short cuts here at Sustainability Incubator. We work hard to achieve shared goals and we work on trust. Trust is easily lost in this field when false claims are tolerated, so our work instead is backstopping that trust, to make this transition easier and start having fun with it.
At Sustainability Incubator our network is strong and our people are driven by integrity because when we work on our clients’ issues it helps lower their risks. It’s 60% elbow grease / 40% science not glory. We’ll produce results you can hang a hat on. We’ll make you smile and we’ll back up your achievements in the market. Pride in putting a good product out into the market — the secret was obvious all along.
We made it through the trial-and-error phase!
ALOHA and hope to see you in 2016.