Fish farming is the fastest-growing animal protein market, expanding faster than meat and dairy. The global fish catch reached its zenith some years ago, and the importance of fish farming has grown enormously in the past 40 years. The latest Sustainability Spotlight published by Bank Sarasin highlights the sustainability risks associated with fish farming. Aquacultures carry major drawbacks: farmed fish eat food made from wild fish, and antibiotics and growth hormones are widely used. China's Dalian Zhangzidao Fishery Group is one of the few companies to have developed an interesting approach to integrating cultivation.

In Switzerland 9.3 kilos of fish and seafood products are consumed per person on average (2011). This figure is 50% higher than in 1988. No other sector in the food industry has expanded to such an extent. Industrial fishing has led to a rapid increase in the proportion of overexploited fishing grounds. Experts estimate that, if catch rates remain the same, the oceans will be totally fished out by 2050. These are alarming signs for all sectors of the economy dependent on fishing. In light of the threat to wild fish stocks, aquaculture appears to be the logical solution. There is a flip side to the success story of the past few decades, however: contrary to expectations, aquaculture has not alleviated the overfishing of the oceans, but over the past decade has increased the pressure on wild stocks yet further. The main reason for this is that farmed fish eat food made from wild fish. On average, 60% of aquaculture feed worldwide comes from wild catch.

Demand for fish food puts heavy pressure on wild fish stocks

As a result, there has been no let-up in the pressure on wild fish stocks. Intensive fish farming and the use of antibiotics and other drugs is also ubiquitous and, in the case of several species, growth hormones are also used. A critical view must be taken of antibiotics in particular, as their use results in the development of resistance. The industry is expected to face stricter requirements and higher costs as a result of controls. Furthermore, consumer confidence in certain species may suffer as a result of negative headlines.

Clear sustainability strategy is vital for investors

For investors interested in participating in the dynamic growth of fish farming, this means giving priority to aquaculture companies with a dedicated sustainability strategy. This must cover the central sustainability risks posed by aquaculture, such as the proportion of wild fish in the feed or the use of antibiotics. Bank Sarasin has investigated how a limited number of companies handle the central sustainability risks. To date, only a handful qualify for the sustainable investment universe. These include the Chinese Dalian Zhangzidao Fishery Group, which has developed an interesting approach to integrated cultivation. The group also specialises in seafood species that can be cultivated in environmentally responsible conditions.