Did you know that every three days a new invasive species is introduced in a new part of the ocean, in many cases taking over local ecosystems and fisheries? That’s the kind of data that companies responsible for carrying and dumping these species–shipping companies and cruise lines for example–should track and report. But they don’t. It doesn’t show up on their sustainability reports. This threat to biodiversity, along with many other key impacts on the ocean, is rarely accounted for.
That is the issue that a paper published by Stanford University and co-authored by Lancaster University explores. It compares the industrial impacts on the ocean with what leading companies in the ocean economy disclose. And it concludes there’s a need for greater transparency and accountability.
Researchers summarized and categorized the ocean impacts that can be observed from eight core sectors of the ocean economy: cruise tourism, marine equipment and construction, offshore oil and gas, offshore wind, port activities, seafood, shipbuilding and repair, and container shipping. They compared those impacts to the annual and sustainability reports from the top 10 companies in each sector for the years 2018 – 2020. They were looking see what impacts are being reported, how they are measured, and what targets (if any) are set.
They found that there are crucial gaps in the current reporting of corporate impacts on marine ecosystems. Companies focus almost exclusively on energy use and greenhouse gas emissions. They rarely measure more ocean-specific impacts like whether the company’s activities are altering habitats–for example by dredging shorelines to allow ships to come in. They don’t measure impacts like noise, which prevents animals that use sonar from migrating and finding mates. And they don’t measure oil spills and gas leaks.
On what they do report, there aren’t uniform indicators so they can measure themselves against a standard. For example, fewer than one-third of the companies reported indicators for biodiversity-related impacts, and none of these indicators were used by more than two companies.
Reporting Can Translate into Regulatory and Financial Responses
“Humanity has relied on the ocean for millennia, yet today’s scale and diversity of use are unprecedented,” said Jean-Baptiste Jouffray, a Wallenberg postdoctoral fellow at Stanford University’s Center for Ocean Solutions and the Stanford-based Natural Capital Project, and lead author the paper in Nature Sustainability. “While this offers opportunities for human wellbeing, it also poses severe risks to ecosystems and the communities that depend on them.”
A number of voluntary climate and nature reporting frameworks, such as the Taskforce for Nature-Related Financial Disclosures, the World Benchmarking Alliance, and the CDP (formerly the Carbon Disclosure Project), are actively working to incorporate ocean impacts. Meanwhile, several stock exchanges now expect listed companies to disclose information on their climate impacts. Over time, such transparency could become as standard as financial reporting is today.
“Many reporting studies lack the natural science underpinnings to know where there are gaps in company sustainability disclosures,” said co-author Professor Jan Bebbington from Lancaster University’s Pentland Centre. “An innovation within the research was bringing together insights into several industries who all operate in the same physical domain and, sometimes, are competing for space in which to operate. The complexity of the ocean space creates novel challenges for organisational researchers that, as the paper shows, can be resolved with a strong inter-disciplinary team.”
The ocean may seem vast, covering nearly three-quarters of the planet, but it is rapidly becoming a crowded space. Once slower to develop than land-based industries, the ocean economy is now surging thanks to new technologies. Companies and governments are vying for food, raw materials, energy, and geopolitical influence. In just two decades, shipping has grown fivefold and now carries 80% of global trade by volume; offshore wind has expanded more than 500 times; and nearly one million kilometres of seabed fibre-optic cables transmit 99% of international communications.
Scope of reporting by industry. Percentage of firms that mentioned, measured, or measured and set a target for each type of ocean environmental impact
“In theory, the more information companies disclose about their operations, the better you can influence their behaviour. But that requires someone to act on that information. Transparency alone is a necessary, but far from sufficient, basis for corporate accountability,” said Jouffray.
The researchers have already shared their work with these organizations, helping to create greater consensus around which indicators to focus on. It is also clearer where there are gaps in what is being measured, and where researchers could play a bigger role in providing baseline information. For example when it comes to the introduction of invasive species. Eventually, some of these data may be produced by third-party monitoring systems, much as Global Fishing Watch tracks fishing vessel activity via satellite, since current reports are based on what companies choose to publish.
The Investors Are Up Next
The research team is turning next to identifying the financiers of these ocean economy companies, hoping they can help create the right incentives for better corporate disclosure and practices.
“There has been a lot of interest in the role that the financial sector could play to influence ocean conservation and sustainable use, so we really want to test that idea,” said John Virdin, director of the Ocean Policy Program at the Nicholas Institute for Energy, Environment and Sustainability at Duke University and a co-author of the paper. “Now that we have a baseline of the ocean impacts that companies report, we’re curious to know: if this reporting is improved, would financiers act on that information? Would it change investment decisions in the ocean economy? These are questions we are turning to now.”
The research paper, published in Nature Sustainability, was authored by Jean-Baptiste Jouffray from Stanford University, John Virdean, Duke University Nicholas School of the Environment, Jan Bebbington of the Pentland Centre for Sustainability in Business at Lancaster University; Robert Blasiak of the Stockholm Resilience Centre at Stockholm University; Andrea Dunchus and Dan Vermeer with the Duke University Fuqua School of Business; Marta Lo Presti, Jeremy Pare, Juan Pablo Quintero and Regan Rosenthal with the Duke University Nicholas School of the Environment; Daniel Prosi with the European University Institute, Department of Economics; and Piera Tortora with the Organisation for Economic Co-operation and Development.
