The “Sustainable Seafood Movement” began in the mid-1990s, as concerned stakeholders became frustrated with the ineffectiveness of command and control solutions for sustainable fisheries management.  The alternative to regulatory requirements was to harness the power of the market to achieve such goals.  Market-based solutions reflect the premise that consumers will choose sustainable seafood (if they have the proper information), and companies will engage in more socially and responsible practices in response to such demand.  The objective of the presentation was to discuss whether the use of market approaches has been effective in improving sustainability of fisheries, with a focus on ecolabeling.  Furthermore, given the controversies around ecolabeling, what is the outlook for the future?

The Sustainable Seafood Movement utilizes three market approaches: consumer boycotts, consumer guides, and ecolabeling.  Boycotts attempt to convince restaurants and retailers to not offer species that are at-risk or illegally caught.  These initiatives have been somewhat effective.  Consumer guides provide consumers with a simplified summary of whether the species commonly found in restaurants or stores are good or bad choices (in terms of species’ risk profile and, sometimes, human health).  Early on, the consumer guides were not always consistent with one another. 

Ecolabeling is the approach that has gained the most momentum, with the Marine Stewardship Council (MSC) as the major international capture (vs. aquaculture) ecolabeling program.  Unlike “environmental labeling,” which are informal claims, “ecolabeling” must involve the verification of specific environmental performance standards by independent, third-party certification firms.  More than 44 fisheries are now certified or under assessment by MSC.  Its standards for responsible fisheries follow three key principles: health and productivity of the fish stock, ecosystem function, and effective management.  Among its main challenges are how to apply its standards consistently across all approved fisheries.  Now that MSC has gained a critical mass of producers and wholesale purchasers for its certification program, a preliminary evaluation of market and environmental benefits is possible.
              
Surveys have shown that, when presented with the hypothetical choice, a significant number of consumers will choose ecolabeled seafood over non-ecolabeled alternatives, and they are willing to pay a price premium.  However, point-of-sale data should now be reviewed to confirm this.  There are now over 500 MSC-labeled products sold in 26 nations, and sales increased 116% between 2006 and 2007 to $509 million.  Although it may be still too early to draw conclusions about consumer demand, there has been a clear uptake from companies throughout the value chain, from fisheries, to processors, to retailers.  For instance, Walmart has committed to selling only MSC-certified fish by around 2010.

In general, the earliest fisheries certified by MSC were already engaged in sustainable practices.  However, as market demand has increased, a growing number of poorly-managed fisheries are pursuing certification, leading to improved practices among the laggards.  In addition, the certification process has led to more habitat mapping and observer coverage, as well as less mortality of non-fish species such as seals.

Why are more fisheries, processors, and retailers voluntarily engaging in such acts of Corporate Social Responsibility?  The traditional “business school view” would primarily point to increased consumer loyalty and improved corporate brand image.  Economists would emphasize risk minimization (of future supplies of fish, and of public disapproval) and revenue maximization (from new markets, product differentiation, price premiums, or market share expansion).

An emergence of competing certification programs may lead to challenges such as consumer confusion and a race to the bottom in less stringent standards.  At this time, there remains a need for increased consumer awareness of the MSC label and what it stands for.  Therefore, important next steps for ecolabeling programs are consumer outreach as well as market research to better understand the economic incentives created by MSC labeling for all constituents of the value chain, from consumers trickling down to the ex-vessel level.