An Inconvenient Trout: Nissui’s Approach to Climate Change

How leading a leading fishery based in the world’s fish-hungriest nation is coping with the impacts of a changing climate – and what more can be done.

In Japan, it’s perfectly normal to have fish for breakfast, lunch, and dinner. One in ten fish globally is eaten in Japan. [1] So a claim that climate change and other factors may cause some catches of coastal species may decline by as much as 70% by 2100, there’s good reason for Nippon Suisan Kaisha, Ltd. (“Nissui”), Japan’s second-largest marine products business, to be alarmed. [2]

Through its core marine products business, Nissui aims to “establish a global supply chain of marine products… to deliver safe, secure, and delicious fish at all times.” [3] Nissui delivers on this goal by performing operations including fishery, aquaculture, processing, and sales, bringing a wide variety of products from frozen foods to fish paste from the ocean to the dinner table. [4] The Nissui Group, with $5.2 billion in revenues in FY2015, [5] consists of a global network of about one hundred subsidiaries and partnerships.

Nissui’s Global Presence [A]
a

Fish consumption has been increasing and will continue to increase globally, [6] so Nissui theoretically has an opportunity to grow. However, climate change can limit not only the growth opportunity but also Nissui’s ability to achieve its corporate objective. Increasing ocean acidity and surface temperatures alter the marine ecosystem, affecting the habitat of the fish themselves as well as their food. [7] Total fish production can change, as well as the type of fish species available in a geography; [8] the unpredictability of marine species migration creates difficulty for procurement and further logistics down Nissui’s supply chain. Issues such as overfishing complicate the attribution of such predictions to climate change. The effects of fishing and climate have strong interactions, because both variables alter the biodiversity of marine ecosystems. [9]

In general, initiatives by Nissui’s business units focus on aligning procurement activities with best practices for sustainable aquaculture (i.e., aquafarming). Nissui is investing in such practices to mitigate erosion of the marine ecological system and to increase production that is less vulnerable to climate change effects. Specifically, Nissui is developing capabilities for what it calls “complete aquaculture,” which raises fish spawned from farming instead of natural juvenile fish, creating a process entirely separate from the natural ecosystem. [10] Currently, complete aquaculture is possible for yellowfin and in development for Bluefin tuna, salmon, and blowfish. [11] Additionally, Nissui is commercializing a project ten years in the making that developed the “Precision Seafood Harvesting” method to filter fish too small to be brought on board. [12] Such innovative practices are enabling Nissui to stay in compliance with regulations and increase yield while also increasing the sustainability of their business.

One way that Nissui is adjusting to accommodate the changing environment is by adopting new technologies. For example, in Tottori, Japan, home of coho salmon (the breed used across the country for sushi), Nissui commercialized an aquaculture method using auto-feeding robots that adjust and deliver the right amount of feed to grow fish in changing water conditions. Nissui also works with DoCoMo, a mobile phone operator, to monitor changes in sea water conditions resulting in part from climate change. [13]

Nissui Automatic Feeding System [B]
b

Nissui is doing well to adapt and mitigate climate change risks as a single company, but as a major player in a natural resource industry, Nissui needs to do its part in reducing carbon dioxide emissions. As a country, Japan has a goal of reducing its greenhouse gas emissions by 80% by 2050. [14] Worldwide, 188 countries aim to reach “greenhouse gas emissions neutrality” between 2050-2100 under the 2015 Paris climate agreement. [15] In Japan alone, Nissui’s carbon dioxide emissions have steadily increased in recent years. For example, emissions for FY2013 were 180,950 metric tons, a 7.5% increase from the previous year and the equivalent of forty thousand American homes annual emissions. [16]

As a global company, Nissui has the responsibility to reduce its carbon footprint. To start, it can push for policies to incentivize renewable energy in Japan, and invest in renewable energy to power its operations and offset its emissions. Additionally, Nissui should push for worldwide climate legislation to succeed and build upon the Paris agreement.

Finally, Nissui should invest in data analytics to help quantify the impacts of climate change on their operations. While this would be a frugal investment to insure their ability to adapt, they should also be an environmental steward and share this information with the proper information gathering agencies (e.g., IPCC). Put another way, Nissui’s adoption of new aquaculture technology provides Nissui the ability to control some supply, but there is still an unknown that is critical to Nissui’s ability to plan for the future: exactly what fish species will be where. For example, Nissui can continue and expand its partnership with DoCoMo and other IT companies to gather species-specific data, which can be used to forecast regions where business units and resources need to be strengthened.

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Sources
[1] FAO Fisheries and Aquaculture Department. 2009. Fishery and Aquaculture Country Profiles: Japan [ONLINE] Available at: http://www.fao.org/fishery/facp/JPN/en, accessed 3 November 2016.
[2] [Translated] National Research and Development Agency, Japan Fisheries Research and Education Agency. 2008. Effects of global warming on marine ecosystem and resources and predictions. [ONLINE] Available at: http://www.fra.affrc.go.jp/kseika/ondanka/siryo1.pdf, accessed 3 November 2016.
[3] NISSUI. 2016. Business Activities Summary. [ONLINE] Available at: http://www.nissui.co.jp/english/business/enterprise/index.html, accessed 3 November 2016.
[4] NISSUI. 2016. Business Activities Summary. [ONLINE] Available at: http://www.nissui.co.jp/english/business/enterprise/index.html, accessed 3 November 2016.
[5] Using average 2015 exchange rate 1 USD = 0.008263.
[6] World Bank. 2013. Fish to 2010: Prospects for fisheries and aquaculture. Report number 83177-GLB [ONLINE] Available at: http://www.fao.org/docrep/019/i3640e/i3640e.pdf, accessed 3 November 2016.
[7] M. Rhein, et al. 2013. Observations: Ocean, in Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, pp. 255–316.
[8] G.-R. Walther, et al. 2002. Ecological responses to recent climate change. Nature, 416, pp. 389-395.
[9] K.M. Brander. 2007. Global fish production and climate change. Proceedings of the National Academy of Sciences, 104/50, pp. 19709-19714.
[10] NISSUI. 2016. Sophistication of Aquaculture. [ONLINE] Available at: http://www.nissui.co.jp/english/social/environment/sophistication.html, accessed 3 November 2016.
[11] NISSUI. 2016. Sophistication of Aquaculture. [ONLINE] Available at: http://www.nissui.co.jp/english/social/environment/sophistication.html, accessed 3 November 2016.
[12] NISSUI. 2016. Sophistication of Aquaculture. [ONLINE] Available at: http://www.nissui.co.jp/english/social/environment/sophistication.html, accessed 3 November 2016.
[13] B. Waycott. 2016. Japanese Fish Farms Thriving on New Technology. The Fish Site [ONLINE] Available at: http://www.thefishsite.com/fishnews/27838/japanese-fish-farms-thriving-on-new-technology/, accessed 4 November 2016.
[14] Ministry of the Environment. 2014. Japan’s Climate Change Policies. [ONLINE] Available at: http://www.env.go.jp/en/focus/docs/files/20140318-83.pdf, accessed 4 November 2016.
[15] COP21. 2015. “188 countries have committed to reducing their greenhouse gas emissions.” [ONLINE] Available at: http://www.cop21.gouv.fr/en/185-countries-have-committed-to-reducing-their-greenhouse-gas-emissions/, accessed 4 November 2016.
[16] NISSUI. 2016. Reducing CO2. [ONLINE] Available at: http://www.nissui.co.jp/english/social/environment/reduce02.html, accessed 4 November 2016.

Picture Sources
[A] NISSUI. 2016 [ONLINE] Available at: http://www.nissui.co.jp/english/index.html, accessed 4 November 2016.
[B] NISSUI. 2016. Oita Marine Biological Technology Center [ONLINE] Available at: http://www.nissui.co.jp/english/corporate/rd/facilities/oita.html, accessed 4 November 2016.

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4 thoughts on “An Inconvenient Trout: Nissui’s Approach to Climate Change

  1. It’s great to see that Nissui is taking steps to combat some of the most harmful effects of overfishing. I was really interested to read more about the aquaculture of yellowtail tuna (and potentially bluefin in the future). Given that these are threatened species, if there is any way that Nissui can artificially farm fish to satisfy demand, that could be a boon to the natural population.

    My questions would be around how this might fundamentally change Nissui’s business model. In a way, it’s like IKEA owning/leasing the forests for their wood–Nissui is trying to take control of its raw materials (in their case, fish) and raise them in a sustainable way. However, this effort requires a large amount of capital investment if it is going to make a dent in the global, growing demand for fish–and alters the company’s current mix of fisheries and aquaculture. Hopefully Nissui’s executives see this investment as critical to their future success, especially if the world’s wild fish population continues down its current route.

  2. Thanks for this article, great read. My main concern with this method is that there wouldn’t be enough on the consumer demand side to allow for this kind of switchover. Are Japanese consumers willing to eat farm-raised fish? It’s an interesting dilemma, since I imagine farm-raised fish would actually be cheaper and more environmentally-friendly, but maybe that lower price would be perceived as being lower quality. In the States, farm raised fish is laid out right next to wild-caught in stores like Whole Foods, and the market premium commanded by wild-caught is nearly 2x. Are there efforts by Nissui and others to convince Japanese of the issues surrounding the fish economy? Would just worry that all the excellent work on the supply side won’t mean anything if purchasing behavior isn’t changed.

  3. I’m particularly struck by the need for both data analytics and innovation to deal with the effects of climate change—and the change that Nissui itself produces. The delicate balance that fisheries have already had to strike with amount they catch was difficult enough, without adding on the complexities of shrinking and moving habitats!

    The shift to aquaculture itself seems to have been a big technological change, and it’s exciting to hear of other innovations to continue to lower the impact of that sector. From research that a colleague of mine did on “vertical farming” in New York City, I was surprised to learn that fish play a key role in some aquaponics, where a fish tank is connected to a soil free column for growing vegetables, using the fish waste as fertilizer. I wonder the extent to which this kind of closed system can be replicated at scale in the fishery industry, creating a circular economy that reduces environmental impact while producing both plants and protein.

  4. Great article! This issue is going to enter the mainstream more and more as the sustainability aspect of the tuna fishing industry starts to hit the worldwide tuna market. Some friends of mine that are a bit more conscientious about this issue have already begun boycotting the tuna industry due to some of the issues with sustainability. It seems that the move towards complete farming solutions is one that could appeal to these types of customers while the market price of wild-caught tuna should hopefully suppress the demand that Will L refers to.

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