World Oceans Day Means Business

On World Oceans Day, the World Economic Forum's Global Agenda Council on Oceans is endorsing two initiatives to guide management of ocean resources for the future: the Ocean Health Index and "seafood traceability"(transparent tracking of seafood from source to consumer).
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For the first time in history, some industries face the real possibility of maxing out the Earth's natural resources in an effort to meet growing consumer demand. Ocean resources are of particular concern.

Our oceans are the single largest asset in the world. In 1997, the oceans were estimated to contribute more than US$ 21 trillion in free materials and services such as food provision and oxygen generation. In comparison, the world's GDP at that time was $US 18 trillion. The importance of healthy productive oceans is hard to overstate.

On World Oceans Day, the World Economic Forum's Global Agenda Council on Oceans is endorsing two initiatives to guide management of ocean resources for the future: the Ocean Health Index and "seafood traceability"(transparent tracking of seafood from source to consumer).

Today, industry faces one of the biggest shifts in its history. Global spending on goods and services is forecast to grow 43 percent in the next 10 years.

For business, it's not a question of "Will we grow?" but "Can we grow enough? "Will finite resources limit our ability to meet the demand by a fast-growing middle class for high-quality foods and products? Can we feed a population of 9 billion people who will require 70 percent more food than we produce today?

We never thought we could "fish out" the world's oceans. But it's happened.

In 1992, the Canadian government banned cod fishing in the North Atlantic, acknowledging that this enormous, once world-class fishery had collapsed from overfishing. Despite costly efforts, they have not been able to bring it back. What was lost? Over US$ 200 million worth of high-quality protein to feed the world, and the jobs and livelihoods of 40,000 watermen and processors.

The cod story is being replicated all over the world. In 2012, the FAO reported that 87 percent of all measured fish stocks are fully or over-exploited. We are using more effort to harvest less fish each year. This points toward one conclusion: Sustainable seafood management is no longer an option -- it's a must.

Business has begun to recognize these issues and act aggressively to shift to more sustainable practices. This new trend is driven by three factors:

  1. Business needs a supply chain that can grow with demand.
  2. Consumers report a growing preference to buy "green" products.
  3. Investors put a premium on businesses that operate sustainably.

In other words: Working to maximize the sustainable production of natural resources for the future is just good business.

This year, McDonald's announced that worldwide, 99 percent of all McDonald's fish will come from Marine Stewardship Council (MSC) qualified sources. McDonald's serves over 300 million Filet-O-Fish sandwiches a year. This single decision will influence an entire supply chain around the world.

McDonalds is not alone in its leadership. Starbucks has announced that 93 percent of its coffee (545 million pounds) comes from ethically qualified sources; by 2015, it will be 100 percent. In addition, Walmart has developed its own sustainability index. Product suppliers are encouraged to develop a report based on 15 questions to assess their performance. By 2017, Walmart will buy 70 percent of the goods sold in U.S. stores only from suppliers that use the index to evaluate and share the sustainability of their products.

Each of these decisions will change entire industries: from the local fisherman or grower, to processing and manufacturing, to the purchasing decisions of the wholesaler, and finally to the marketing aimed at the consumer. To make a decision of this magnitude, a business must assess data, determine what changes will have the greatest positive influence on future revenues and determine what is actually achievable. This is where the Ocean Health Index enters the picture.

The World Economic Forum endorses the Ocean Health Index because it is the first comprehensive measure of how well we are using ocean resources in a sustainable way. The Index uses a scale of 0-100, where 100 is an attainable goal for sustainably enjoying ocean benefits, and anything less than 100 is not sufficient to sustainably develop the products we'll need over many decades. Scores are applied against 10 goals such as seafood provision, biodiversity, and livelihoods & economies. Altogether, 171 countries with a shoreline are given a set of scores, which are based on a complex matrix of components that impact ocean health. (Learn more in this infographic.)

The Ocean Health Index provides decision-makers with a practical tool to help inform strategy and be used to:

  • Test scenarios. If our country protects coral reefs, how will that impact our ocean health score, including food production, tourism, jobs and biodiversity? If we no longer remove mangroves to build new hotels, what will be the impact on scores for tourism and shoreline protection?
  • Point to regions and goals that score poorly or well. Such information can help governments or businesses evaluate an area's suitability for different types of activities and investment.
  • Monitor progress. Because Index scores are updated annually, they can be used to assess whether a strategy is working in a sustainable manner.

The Index provides a framework that can be applied at any scale, from a small bay to the entire world. Global databases are used for the international version of the Ocean Health Index, while local agencies and governments can choose to run an Ocean Health Index computation for a local region using data that is specific to that area. This provides policymakers with a framework for decision-making and a system to track progress.

This is a first. Until now, we have not had a way to assess our sustainable use of ocean resources -- no metric by which to manage our largest natural asset.

Seafood traceability is the second initiative endorsed by the World Economic Forum. Traceability refers to the ability to track fish products back to the fisheries where they were caught, and the ability to know essential facts about how that fishing was conducted. Without this information, it is impossible to manage fisheries and difficult to eliminate illegal and unregulated fishing.

By endorsing the Ocean Health Index and seafood traceability, the World Economic Forum has identified a key to future decision-making for global industrial leaders. The potential payoff is huge. An additional US$ 50 billion in food could be harvested from our oceans. By 2030, five billion members of the middle class could access ocean-related tourism, resulting in more jobs and expanded industry. Many industries would profit from a sustainable supply chain.

As my friend Sylvia Earle likes to say about managing our ocean resources: "We need to act as if our lives depend on it ... because they do."

This post originally appeared on the Conservation International blog, Human Nature.

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