How Thai Union rapidly pivoted to a greener business strategy
Date: Monday, January 20, 2020
Back in 2015, Thai Union had run into choppy waters. The multi-billion dollar seafood giant behind global tinned fish brands John West in the United Kingdom, Chicken of the Sea in the United States and King Oscar in Norway, among many others, had a PR shipwreck in its sights, and needed to shift coordinates swiftly.
Exposés in the New York Times, Associated Press and The Guardian had laid bare human rights abuses, forced labor and environmentally destructive fishing methods in Asian supply chains for canned seafood and prawns that ended up in U.K. supermarkets, placing Thai Union — one of the biggest producers in the world — firmly in the media and campaigner firing line.
Greenpeace didn't mince its words, calling on consumers and investors to boycott the company, accusing it of "sacrificing the world's oceans" and "destructive, wasteful fishing practices from its supply chains."
"For far too long Thai Union Group has passed the blame onto others and hidden behind ineffective policies," Greenpeace campaigner Graham Forbes said at the time. "Until this industry giant takes responsibility and demonstrates real leadership, we will work to ensure that every single customer knows it's not just tuna that comes with buying one of its tainted brands."
Yet fast-forward five years, and the company is top-ranked in both the latest Dow Jones Sustainability Index for food products, as well as the inaugural Seafood Stewardship Index of the 30 largest seafood companies globally, with particular commendations for its supply chain traceability, sourcing policies, and environmental footprint. Even Greenpeace is on board (PDF), striking an agreement in 2017 that will see the campaign group monitor Thai Union's progress towards mutually agreed targets on human rights and sustainable fishing.
The firm is navigating a turnaround towards more sustainable practices — albeit with some way to go — that many, many corporates may have to chart in the coming years, or face increasingly angry regulators, investors and consumers, not to mention fierce competition from greener challengers and widespread market disruption. It is a binary choice between seeking change or being changed; sinking or swimming.
And Thai Union, according to CEO Thiraphong Chansiri, chose to swim. "We are one of the leading seafood companies in Thailand," he said in a 2018 interview. "It is our responsibility to correct the situation and make it right."
So how did a pariah of corporate sustainability pivot to a greener business strategy so rapidly?
One of its first steps was the appointment of Darian McBain, hired as global director of corporate affairs and sustainability in 2015 to spearhead the firm's SeaChange sustainability strategy. Armed with a Ph.D. in global supply chain analysis and experience from a string of top-level sustainability roles at the United Nations, WWF and even the NHS, she was deemed the ideal candidate — if an ambitious hire for a firm that was at the time facing the ire of environmentalists. But perhaps most interesting of all, McBain is a vegetarian.
"They did find out eventually — I didn't declare it in the interview," she tells BusinessGreen of her fishless diet. "To me, I joined the company because I really love the oceans."
Still, a company boasting $4.1 billion in seafood sales that has been linked to unsustainable fishing practices and dogged by human rights concerns hardly looks like an obvious career move for an environmentalist plant-eater. But having spent much of her career in academia, NGOs and as managing director of business consultancy Blue Sky Green in her native Sydney, McBain was ready for a change.
"I just thought this was a great opportunity to put my environmental and social skills together with a supply chain to make a real difference," she explains. "It was interesting when I was going through the interview process, because I was interviewing them as much as they were interviewing me. I wanted to make sure they genuinely wanted to make a change."
McBain admits Thai Union was "nowhere" on sustainability when she joined, but stresses the firm has been genuinely committed to becoming a greener and more ethical entity throughout its core business and supply chain. And she relishes being able to affect change at a global corporate, which in comparison to working in governments or NGOs enables her to "actually get things done."
"You are not just working by influence and suggesting policy change, or campaigning against change, you are the agent of change," she explains. "You don't need to wait for others to do it for you — you have the power to change the way we do business. And if it makes sense then you can do it really quickly."
And the pace of change at the company she joined less than five years ago has been "pretty dramatic," McBain claims.
In 2015 the firm set a series of sustainability targets to be met by the end of 2020, including sourcing a minimum of 75 percent of its branded tuna and aquaculture products from certified sustainable fisheries and farms, backed by a pledge that it would be able to trace each product back to source. From a 2016 baseline, it is also targeting a 30 percent cut in greenhouse gas emissions, a 20 percent cut in water consumption and a 20 percent cut in waste to landfill at its factories globally. It will publish its scorecard detailing its progress on these goals towards the end of this year, while also developing its next set of targets in a new 2025 SeaChange strategy. However, the company is confident it is on track with its goals.
Thai Union also joined the Global Ghost Gear Initiative in 2018, an alliance of industry, academia, NGOs and governments dedicated to tackling at scale the problem of lost fishing equipment damaging ocean environments. The Alliance estimates lost, discarded or abandoned fishing gear account for 70 percent of macro plastics in the ocean by weight, presenting a huge threat to marine wildlife.
From a standing start, Thai Union has set off at a blistering pace on its sustainability journey. But it still has some distance to travel, and consumers and campaigners inevitably will be unconvinced of the authenticity of the firm's efforts given its past form. It is after all a major cog in a global seafood chain many argue is inherently unsustainable, with the U.N. body of the Food and Agriculture Organization (FAO) warning in 2018 fish production is continuing to grow at rapid rates globally, risking further overfishing. Future growth of the sector therefore will require continued progress in strengthening fisheries regimes, reducing loss and waste, and tackling illegal fishing pollution and climate change, the FAO said.
With that in mind, McBain has even loftier ambitions for Thai Union going forward. The company recently has begun reaching out to start-ups for innovative solutions, including through its food tech incubator program, and perhaps most interesting, it has announced several investments in the burgeoning market for alternative proteins. For example, in the United States it has teamed up with Calysta on a project to farm shrimp fed with protein created from natural gas, while in October it announced support for Flying Spark, which uses insect larvae to produce protein powder and oil. The broad aim in both cases is to develop a healthy, more sustainable fish feed alternative that reduces the environmental pressure on traditional fishmeal supply chains, which are also often harder to trace and therefore potentially more at risk from illegal fishing and labor practices.
It is very early days, but McBain says Thai Union is also considering the potential to develop alternative proteins for direct human consumption, aimed at consumers looking to reduce their intake of meat and fish.
"It's an investment in the future," she says. "I think if we got [alternative proteins] to between 5-10 percent [of Thai Union's business] in the next five to 10 years, that would be an amazing achievement. We're certainly putting that investment in that will grow that segment of the market, but obviously it needs to move in parallel with market demands."
But she stresses the fisheries sector remains crucial to ending world hunger and malnutrition, with more than 50 percent of protein consumption coming from fish in developing nations, compared to 17 percent globally. As such, she hopes global diets "shift towards more sustainable seafood than away from it."
"When you pair sustainable seafood with having positive climate change benefits and inherent nutrition benefits, then I would hope we see category growth in that way," says McBain.
Having spent her first 4.5 years at the firm concentrating on labor rights, supply chain traceability and environmental sustainability targets within the core of Thai Union's business, McBain's immediate focus is now on broader climate action, more on which is expected to be revealed in the next sustainability strategy later this year.
She concedes there is a great deal more work to do on Thai Union's "Scope 3" emissions, which she describes as an "unwieldy beast," partly because it includes shipping for both fishing and freight. Tuna cans, fortunately, require little temperature control, which reduces the energy required on ships to transport them, but other seafood products can be more demanding, and shipping remains a major global emitter with no clear decarbonization path available as yet. McBain has been keeping a close eye on Austral Fisheries' project to build a low carbon fishing vessel in Norway, and highlights greener shipping as an "essential" focus for Thai Union going forward, even though the firm does not directly own or operate any vessels.
But McBain believes the scope for a global seafood company to positively assist the climate fight is "massive," pointing to a recent IPCC report estimating the ocean economy will contribute around a fifth of the action required to keep global warming within 2 degrees Celcius, while also bolstering climate resilience. As such the company is exploring how to support the growth and protection of mangroves in coastal communities, which could open up further opportunities to reduce Thai Union's climate impact. Analysis earlier this month by Planet Tracker — the sister think tank to Carbon Tracker — highlighted how mangroves are a vastly overlooked conservation issue, with the farmed shrimp industry estimated to be responsible for around 30 percent of mangrove deforestation and coastal land-use change across Southeast Asia.
"Mangroves in particular have a massive ability for carbon capture and storage, and so we would really like to strengthen our approach there," McBain explains. Her broader question, she says, is "how do we use sustainable seafood in the fight against climate change?"
"It's all linked: we can provide healthy food while also being part of the 'planetary diet' — which recommends a reduction in most forms of protein and a move towards alternative proteins, but fish is still part of that diet," she argues.
In just five years, Thai Union has come a long way due to a commendable openness to change through collaboration, experimentation and transparency. Fostering long-term trust among consumers, environmentalists and investors in an industry increasingly under the spotlight for its fishing practices will take longer still, but if McBain has her way the company soon could lead the wider sector towards a greener, more sustainable future. Within two years, for example, Thai Union might be ready to offer consumers its first net zero cans of tuna, she says.
But through it all, McBain says her motivation has not been the threat of Thai Union losing its social license to operate, but a positive desire to be on the right side of history. "We've already had enormous pressure from consumers from various campaigns over the past few years," she says. "But it's not about just making sure consumers are happy. Sometimes, if you're a big company and you're able to do something, you should be taking steps."