Once viewed as optional, ESG disclosure is now becoming a strategic necessity — driven by binding legislation, investor scrutiny, and the growing urgency for sustainable transformation.
As the maritime industry charts its course through the unrelenting tides of climate change, regulatory transformation, and stakeholder expectations, Environmental, Social, and Governance (ESG) reporting has emerged as a critical compass.
Why ESG reporting matters
Sustainability in shipping is no longer a vague aspiration; it’s a measurable requirement. Investors, regulators, customers, and employees now demand transparency on how companies manage both risks and opportunities associated with climate change, biodiversity, social equity, and ethical governance.
Well-executed ESG reporting provides a true and fair view of a company’s sustainability performance. It allows maritime stakeholders to answer complex questions from multiple stakeholders within a single, verifiable document.
However, the challenge lies in balancing legislative requirements with industry-specific priorities — while ensuring the data is relevant, comparable, and digestible.
Boards and senior leadership teams must now take the helm in overseeing ESG strategy, recognizing that this isn’t just a compliance issue but a business opportunity. According to McKinsey, companies leading in ESG show higher momentum when they embed ESG into growth strategies, link executive incentives to ESG metrics, and maintain central ESG teams to coordinate efforts across the organization.
Legislative frameworks reshaping the industry
At the heart of this shift is the EU’s Corporate Sustainability Reporting Directive (CSRD), effective from January 2023. Affecting approximately 50,000 companies, the CSRD introduces mandatory sustainability information in annual reports, requires external assurance, and mandates the use of standardized European Sustainability Reporting Standards (ESRS).
Key features include:
- Digital tagging for automated machine readability.
- Exemption for subsidiaries under consolidated group reporting.
- Detailed ESG disclosures tailored to sector-specific requirements.
Compliance deadlines are phased: large EU companies must report by 2024, listed SMEs by 2026, and large non-EU firms with significant EU operations by 2028. Non-compliance risks are steep — including penalties up to 5% of global turnover, as seen in France’s enforcement model.
Also vital is the EU Taxonomy Regulation, which establishes a classification system for environmentally sustainable economic activities. With six environmental objectives — from climate change mitigation to biodiversity protection — the Taxonomy provides a framework for defining what “green” really means in shipping.
The Directive on Corporate Sustainability Due Diligence (CSDD), still in draft, and upcoming eco-design regulations will further broaden the scope of ESG expectations in the near future.
Sector-specific standards for maritime reporting
To navigate this complex regulatory landscape, shipping companies can turn to a range of reporting frameworks and standards that complement mandatory EU laws:
- GRI Standards: Widely adopted globally, the Global Reporting Initiative standards help companies identify material ESG issues and disclose on a modular basis.
- SASB Standards: Focused on financial materiality, SASB provides tailored guidance for 77 industries, including maritime, linking ESG risks directly to financial outcomes.
- IFRS ISSB Standards (S1 and S2): Recently introduced by the International Sustainability Standards Board, these standards subsume the work of the Task Force on Climate-related Financial Disclosures (TCFD), offering a unified global baseline for ESG and climate risk disclosures.
- TNFD: The Task Force on Nature-related Financial Disclosures expands on the TCFD to focus on biodiversity and ecosystems — a growing concern in maritime ESG.
- UN SDGs: Though not a standard per se, aligning with the United Nations Sustainable Development Goals offers a strategic framework for maritime companies to measure and communicate their global impact.
Challenges and opportunities
Despite the availability of robust standards, implementation remains complex. For instance, the BIMCO ESG network, during its January 2025 meeting, highlighted how incorporating human rights due diligence — especially for small suppliers — remains a significant reporting challenge. Supply chain complexity, lack of standardized customer questionnaires, and inconsistent data availability continue to impede accurate social disclosure.
Additionally, there is growing pressure to report on biodiversity impacts, marine pollution, and resource circularity — themes not historically prioritized in shipping but gaining traction under the EU Taxonomy and TNFD.
Still, with challenge comes opportunity. According to Will Beer, CEO of Tunley Environmental, the CSRD and other regulations are acting as catalysts, driving innovation in alternative fuels, energy-efficient technologies, and digital transformation across the sector.
Leadership and governance: Setting the course
ESG success in maritime hinges on leadership. McKinsey’s research reveals seven traits that differentiate ESG leaders, including:
- Growth-oriented ESG vision: Treating ESG as a catalyst for innovation and business growth.
- Active board engagement: C-suite leaders directly engaging with external stakeholders.
- Materiality-driven focus: Prioritizing ESG issues that align with stakeholder expectations and core business models.
- ESG C-Suite leader: Appointing an executive-level ESG leader with strategic oversight.
- Central ESG team: Having a dedicated team, even if small, to manage ESG strategy, reporting, and execution.
- Purpose-driven culture: Embedding ESG into branding, operations, and talent management.
- Incentive structures: Tying executive compensation to measurable ESG metrics.
Shipping companies aspiring to lead must integrate these traits — not just to satisfy compliance, but to build long-term resilience and stakeholder trust.
Case Study: Maersk’s science-based target
A leading example is AP Moller-Maersk, which in 2023 became the first shipping company to have its emissions targets validated under the Science Based Targets initiative (SBTi) Maritime Guidance. Maersk aims to reach net-zero GHG emissions by 2040, with interim milestones aligned to the Paris Agreement’s 1.5°C pathway. Their strategy covers Scope 1, 2, and 3 emissions, including value chain activities — setting a high bar for the industry.
Choosing the right framework
Selecting a reporting framework is not a one-size-fits-all exercise. Maritime stakeholders should base their decisions on:
- Materiality: Which ESG issues are financially or reputationally significant?
- Stakeholder Expectations: What do investors, customers, and regulators expect?
- Industry Relevance: Which standards are tailored for maritime operations?
- Data Compatibility: Does the methodology align with the data you can reliably collect?
Many companies may adopt a hybrid model — using CSRD and EU Taxonomy to ensure compliance, while leveraging GRI or SASB for more detailed, voluntary disclosures.
Turning ESG into a competitive advantage
ESG reporting in the maritime industry is no longer about ticking boxes. It is a dynamic process of risk management, stakeholder engagement, and strategic growth.
Companies that view ESG as a regulatory burden risk falling behind. Those that see it as an opportunity to lead will enhance their reputation, attract capital, and future-proof their operations.
By embracing robust reporting frameworks, investing in ESG governance, and committing to transparency, maritime stakeholders are well-positioned to lead the next wave of sustainable innovation
