Seafood is integral to the wellbeing of many communities around the world, with consumer demand for fish set to double by 2050, due to growing affluence and evolving tastes.1 At the same time, climate change is transforming ocean ecosystems, with rising sea levels, acidification, increased water temperatures and extreme weather events reducing stocks and spreading disease.  

The Blue Economy is an important part of the fight against global warming, something acknowledged at the recent COP26 Glasgow Climate Pact.2 UN Sustainable Development Goal (SDG) 143 calls for action on life below water, and we are currently in the UN Decade of Ocean Science for Sustainable Development.4

Aquaculture and wild-capture fishery businesses need to know how climate change will affect their future prospects – but to date the blue economy as a whole lacks reliable insights. The Aotearoa Circle (a public-private partnership dedicated to restoring natural capital) sought to address this gap with the seafood sector through climate-scenario analysis, and contracted KPMG New Zealand to facilitate the work.

As the first study of its kind globally5, this provides a roadmap for future action, with the various participants committing to action to address critical risks and opportunities identified in the scenarios.

Findings from the Circle’s report have wider use beyond New Zealand for other, similar global marine sectors, and will likely prove invaluable to governments and other organizations taking action to protect against and prevent damage to oceans. Encouraged by this initiative, the New Zealand External Reporting Board (XRB) is now promoting shared climate scenarios and collaborative responses by other sectors.

Given the ramifications for the ocean – as demonstrated in the assessment – it’s clear that large-scale collaboration is essential to tackle the challenge, including research bodies, government, private companies, NGOs and indigenous peoples. By undertaking and publishing the report, the Circle has taken an important first step in bringing key actors to the table and discussing pragmatic options.

 

Key finding

Implications

Climate change will considerably disrupt marine social-ecological systems.

Climate-related risks are interdependent and involve more than biophysical change. 

Risks and opportunities cannot be understood or addressed in isolation.

Multi-stakeholder collaboration is imperative. Social, political and economic bodies must work together to successfully avoid the most detrimental impacts of climate change.

‘Marine protein’ could help address future food needs, as well as aligning with changing consumer attitudes to seafood, seafood suppliers and supply chains. 

Scenario planning is crucial to allow companies to respond and mitigate sourcing risks and potential supply chain disruptions.

A strong R&D capability makes aquaculture and wild-capture fishery businesses more resilient and better able to adapt strategy and operations to remain competitive. 

 

Preserving the future of seafood

All the parties involved in or impacted by the seafood industry must be fully committed to a future where the ocean provides a healthy, sustainable source of food to humans. This calls for the following:  

  • Bold leadership: sharing a clear common purpose and taking a collective responsibility for change
  • Resilient prosperity: adapting to disruptive market changes and stewarding marine ecosystems
  • Practical knowledge: a knowledge system that supports culture and history, and provides the evidence for effective decision-making about climate-related risks and opportunities
  • Values-based governance: legislative, regulatory and resource management systems that reflect these principles and respond quickly and boldly to the challenges that climate change poses to the marine environment and seafood community

Getting to know New Zealand’s oceans better

KPMG in New Zealand led an ambitious program for the Aotearoa Circle, to understand more about how climate impacts New Zealand’s seafood sector.

New Zealand’s marine environment is home to habitats and biodiversity of global significance, supporting substantial inshore and deep-water fisheries, as well as a growing aquaculture sector.

For the first time, leaders and subject matter experts from government, iwi (Māori people), industry, banking, research, and environmental NGOs came together to develop a Seafood Sector Adaptation Strategy 2021-2030

The Aotearoa Circle is a unique relationship of public and private sector leaders, unified and committed to the pursuit of sustainable prosperity and reversing the decline of New Zealand’s natural resources. KPMG in New Zealand was commissioned to write the reports.

The strategy’s aim is to enhance the resilience and adaptive capacity of Aotearoa’s (New Zealand) seafood system so that future generations can enjoy a thriving marine environment, blue economy, and seafood community.

KPMG in New Zealand designed a climate-related financial risk assessment and disclosure methodology which combined the insights of Task Force on Climate-related Financial Disclosures (TCFD), the Climate Disclosure Standards Board (CDSB), the Sustainability Accounting Standards Board (SASB) and the principles and practices of ISO 14090. The resulting Marine Scenarios Report (2020) and the Seafood Sector Adaptation Strategy (2021) are publicly available.6

While this study and adaptation developed are specific to New Zealand, the learnings are applicable to the sector globally. New Zealand is an ideal case study due to the country’s high economic reliance on its fishing industry, where any impacts have a ripple effect across society. 


Two scenarios of climate risk

Both climate scenarios were developed to explore climate-related risk at either end of the climate spectrum, with risks arising from physical, transition and legal risks – both of which could severely impact businesses and require an agile response. 

Blue economy

1. Mako: A rapid warming scenario

In this scenario, rising sea levels and increased fluctuations in extreme weather patterns lead to destruction of shore infrastructure, pushing up the costs of maintenance and insurance premiums. Unstable ocean weather conditions threaten employee safety and lead to increase wage and energy costs throughout global supply chains. Rising supplier costs result in oversea producers monopolizing regional markets, collapsing global chains. International collaboration and innovation suffer dramatically. 

2. Kahawai: A strong mitigation scenario8.

Net-zero targets are met and GHG emissions curbed. Fish populations are stable to provide plentiful catch potential and opportunities for sustainable harvesting. Multi-stakeholder collaboration and close community involvement during decision-making supports agility in regulations, to adapt to climate fluctuations. International collaboration also leads to global innovation of sustainable practices and schemes. Consumer preferences potentially shift to synthetic protein production. Schemes are implemented to restore biodiversity and generate revenue through viable ecosystem maintenance. 

                   

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 With special thanks to Sonia Slavinski, ESG reporting and assurance manager, KPMG in the UK and Klara Agoston, ESG reporting and assurance assistant manager, KPMG in the UK .

 

1 Global demand for fish expected to almost double by 2050, New Scientist, 15 September 2021

2 United Nations Climate Change, UNFCCC Topics, The Ocean

3 United Nations, Department of Economic and Social Affairs, Sustainable Development, Goal 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development

4 The United Nations Decade of Ocean Science for Sustainable Development, The science we need for the ocean we want

5 Guidelines for co-creating climate adaptation plans for fisheries and aquaculture, SpringerLink, 27 February 2021 

6 Seafood Sector Adaptation Strategy, The Aotearoa Circle

7 This scenario anticipates a ‘do nothing’ approach. Climate-related risks and impact result in deterioration of marine ecosystem and cascading impacts to the economy.

 8 Global success in meeting Paris Agreement and keep warming below 2c. Sustainable and global economic growth results in agility and flexibility in response to climate-related risks. Consumer preferences are met, and markets are viable.