ESG Watch: Creating the right mindset for an ESG-fit maritime industry

The term ESG refers to a set of metrics used to measure an organization’s environmental and social impact and has become increasingly important in investment decision-making over the years. The ESG journey of shipping has many aspects to consider. In this regard, we posed the following question to several maritime stakeholders:

“How can we create the right culture and mindset for an ESG-fit maritime industry from your perspective?”

SAFETY4SEA would like to express gratitude to all maritime experts who participated in our special column. We appreciate their valuable feedback and commitment to raising awareness towards ESG within the maritime industry.

Read their key messages in alphabetical order:

Darryl Anderson, MBA, Executive Director, Mercy Ships Canada

Alignment, execution, and renewal are hallmarks of a healthy performance-based organizational culture. To create the right ESG fit and mindset for the maritime sector, I believe that participants need to determine what aspects of “E,” “S,” and “G” are priorities, their organizational readiness, and timelines for implementation and assessment. Environmental concerns, public attention, and regulatory change have been the early drivers of many ESG efforts. Yet, a right fit needs to include the governance lens.  Organizations with strong ESG governance practices typically have responsible owners and leadership teams, clear ESG accountability structures, and good process controls. Given international shipping’s complex relationship with labour, I would also suggest that the “social” dimensions of ESG  may need to become a higher priority.

Capt. Akshat Arora, Senior Risk Assessor, UK P&I Club

With the rapid and widespread adoption of new technologies to decarbonise the shipping industry, the UK P&I Club is committed to maintaining strong relationships with its Members. In addition to ensuring that appropriate insurance is available to cover the new technologies, we are working with our Members to ensure that we can support them in making a safe transition through market-leading services, especially loss prevention, that evolve with our Members’ needs. To make real progress, ESG principles should be embedded in procedures, policies, culture, and plans at all levels; and consistent, transparent ESG reporting can be used to track progress. By doing these things well, both the Club and its Members can achieve a competitive edge while staying ahead of industry challenges.

Marcela Crowley, Sustainability Director, NAMEPA 

Creating the right culture and mindset for an ESG-fit maritime industry involves fostering a shared commitment to sustainability at all levels of the organization. By integrating ESG principles into corporate governance, have clear sustainability objectives as an organization, encouraging innovation in waste management and GHG emissions reduction, and prioritizing social responsibility and employee welfare, the maritime sector can drive significant change. NAMEPA is all about education, continuous learning, and workforce development, that should be at the forefront, empowering stakeholders to make informed decisions and adopt sustainable practices. Recognizing and celebrating ESG achievements motivates continuous improvement, enhancing the industry’s ability to navigate the complexities of global sustainability challenges effectively.

Alison Cusack, Principal Lawyer, Cusack & Co Pty Ltd

To shift away from the current inertia of the current mindset for ESG, we need to enact a two-prong approach.

1.  Call out the inappropriate / negative behaviour of individuals, organisations, stakeholders.
2.  Have actual consequences for those behaviours.

Only when they see consequences for their actions which are not ESG aligned will the needle move in the right direction. This is backed by the UN’s approach to achieving actual improvements in the sphere of gender. Five action items including supporting feminist changemakers. No consequences = no change. Those in power and influence need to be as brave as those calling out inappropriate action or inaction.

Fabian Fussek, Co-Founder and CEO, Kaiko Systems

Creating an ESG-fit maritime industry culture demands a holistic approach, emphasizing the empowerment of our seafarers and shore-based teams. By integrating advanced technologies and AI, we can enhance operational efficiencies and foster sustainable practices. It’s essential to establish a culture rooted in trust and transparency, encouraging open dialogue and collaboration across all levels. Continuous learning and adaptation to evolving standards are crucial, ensuring our workforce remains at the forefront of sustainability. Incentivizing innovation in sustainability practices will drive our industry forward. Embracing these elements will not only align us with ESG goals but also ensure a resilient and future-proof maritime sector.

Vilde Lyngstad Hageselle, Environmental Advisor and External Relations, Grieg Green

I believe that in promoting an «ESG mindset», embracing a full life cycle approach is important. What is the environmental impact from well to wake? Identifying «negative» hotspots and implementing measures to mitigate them, with continuous impact assessment along the entire supply chain. Dare to innovate and invest in start-ups and new ideas. In the maritime domain, cost considerations are high on the agenda. Yet, when investing in people and technologies, we must consider ‘the broader picture’.  Investments today will not necessarily give payback straight away, but perhaps more long-term. To engage younger generations, we must adopt forward-thinking practices. Time is of importance: Environmental regulations must be swiftly implemented for industry improvement. Transparency fosters industry-wide knowledge and development, and with due diligence legislation into force, sustainable practices becomes fundamental for business operations, ensuring accountability.

Bjørn K. Haugland, CEO, Skift – Business Climate Leaders

Creating the right culture and mindset for an ESG-fit maritime industry requires a multifaceted approach. First, education and awareness are crucial; stakeholders at all levels must understand the importance of Environmental, Social, and Governance principles and how they apply to the maritime sector. This includes training on sustainable practices, the impact of maritime operations on the environment, and the social responsibilities. Secondly, leadership commitment is essential; leaders within the industry need to prioritize ESG goals and integrate them into business strategies. This demonstrates a genuine commitment to sustainability and encourages a culture of responsibility. Finally, collaboration across the industry is necessary to share best practices, develop innovative solutions, and set industry-wide standards. By fostering an environment of learning, leadership, and collaboration, the maritime industry can align with ESG principles and contribute to a safe and sustainable future.

Peter Hult, CEO, VIKAND

Decarbonisation and digitalisation are the key drivers forging a more sustainable maritime industry which is great for the ‘E’ and ‘G’ in ESG but we must not forget the ‘S’. Shipping’s most important assets are its people and ensuring they are fit in both mind and body will mean that environmental and governance issues are properly maintained. Seafarers need to feel valued with proper ongoing training, a defined career path and good onboard facilities both in their working and rest periods. This will motivate them to carry out their duties diligently. Monitoring crew health is important too as a proactive approach can prevent illnesses becoming more serious and all the additional costs associated with emergency evacuations. So, look after your crew and they will look after your vessel.

Steven Mark Jones, CEO, Sustainable Shipping Initiative (SSI)

Cultivating a maritime ESG mindset is essential. This involves sense making across key areas, prioritising environmental stewardship, ethical responsibility, social equity and transparent governance. mWe must envision a future where ocean protection is a source of pride, where transparency guides governance, and social equity prevails. Maritime leaders must truly champion ESG initiatives, though a mindset of innovation and incentivising best practices. Following the key areas of the sustainability Roadmap, positive change is achievable through collaboration, digitalisation, and continuous learning. Aligning business strategies with ESG principles and integrating them into daily decision-making processes ensures a resilient and future-proof maritime industry. It also needs the voices of those who need change to be heard as loud as those who drive that change.

Marinos Kokkinis, Managing Director of OneCare Solutions

There’s a widespread requirement for fundamental ESG awareness training on all levels. Integrating the human capital dimension of health & wellbeing and learning & development into the organizational strategy is a progressive step within ESG initiatives. By prioritizing support to seafarers, including access to physical and mental health resources, nutritional assistance as well as personalised training, we enhance their overall wellbeing. This ultimately improves their health status and enriches their career trajectories, which in return benefits their communities, families, and companies. Today’s efforts resonate into tomorrow’s outcomes.

Captain Andre L. LeGoubin MNM MA FNI, President, The Nautical Institute

Shipping is currently awash with new laws, directives, and incentives. It is us, the seafarers that must engage, implement, and comply with them, often with massive penalties if we don’t. New systems are being continually implemented on vessels, especially alternative fuels. We must make sure that the training is sufficient to safely load and use these fuels and available to everyone that is STCW qualified or has a professional interest in the ship. The best way to ensure continuity of onboard training is by every new vessel carrying at least two cadets. A great way for future officers to learn. Today’s cadets are the brightest and best the world has ever seen. They must be listened to for most care deeply about our planet and if we engage and listen to them, and provide opportunity for them to sail, they will help us develop the right culture and mindset for an ESG-fit maritime future.

Irene Loucaides, Managing Director, Grow Sustainability Consulting

The maritime industry is very well positioned to adapt to a more sustainable mindset and culture in the sense that it has long been highly regulated and considered ESG criteria in its operations such as the environment, health & safety, anti- corruption measures etc Nevertheless, transitioning to a green economic model takes a number of transformative changes. Beginning with the way organizations are governed. We see a shift from shareholder to stakeholder capitalism as companies recognize the importance of including a number of key stakeholders in their decision making choices. The planet is now considered a SILENT stakeholder. We see the rise of the Chief Sustainability Officer to oversee the implementation of organizations’ ESG Strategies and action plans, the Chief Technology Officer as cyber security becomes the no. 1 global risk, Chief Happiness Officer as mental health becomes a priority in how employees are managed and diversity issues rising up the business agenda. Investing in capacity building around these topics will enable shipping’s workforce to appreciate the value they can create when managed effectively. So there is a lot of work that needs to be done still but I think we are on the right path.

Claudia Paschkewitz, Director of Sustainability, Diversity and Inclusion, Columbia Group

In my opinion, there are two driving forces: the internal one, which we grow through our convictions, and the external one, which is determined by rules and regulations. Investors, clients and stakeholders are increasingly taking ESG factors into account when making decisions. This is forcing the maritime industry to become ESG-fit, i.e. to demonstrate its commitment to positive environmental and social impact and strong corporate governance. Of course, external pressure does not automatically change the mindset or culture, but it is a good impetus to rethink and change perspective. Fortunately, the topic of ESG is now also highly valued in society, so that ESG is also practised internally by the company management, but of course also – and this is key – by the employees. At least I can say that for the Columbia Group. ESG is extremely important to us. The external requirements are therefore received positively and willingly and implemented accordingly.

Cathrin Prikker and Silke Fehr, Co-Managing Directors at Top Glory Marine

We clearly recognize that the maritime sector is increasingly focusing on clean energy – striving to reduce emissions, while from our perspective we are also experiencing a significant increase in demand for effective waste management. The performance of a company is no longer determined by sales alone, but by ethical behavior, environmental protection  and social commitment.  Establishing an ESG-compliant culture requires committed managers, the integration of ESG principles into strategy and active stakeholder involvement.  By deeply integrating ESG values and engaging with all stakeholders, the sector is addressing its environmental impact, promoting social responsibility and ensuring long-term success and resilience, thereby making an important contribution to a sustainable future.

Charlotte Rumbol, Consultant, Human Rights At Sea

Cultivating an ESG-fit culture in the maritime industry necessitates a transformative approach that intertwines ESG and human rights principles. We are advocating for the adoption of The Geneva Declaration on Human Rights at Sea (GDHRAS), which holds a crucial position in shaping the ESG framework of the maritime industry. Our international initiative underscores the rights of all individuals at sea, aligning perfectly with strategies for environmental, social, and governance compliance. By integrating the principles of the GDHRAS into industry frameworks, education, and collaborative engagement, the maritime sector can significantly strengthen its commitment to human rights, fostering a more inclusive and accountable culture. The GDHRAS acts as a guide, steering the industry towards a future where ESG values and human rights navigate the seas together and reassuring stakeholders of the industry’s unwavering dedication to human rights.

Georgia Spencer-Rowland, Shipping Policy Manager, ICS

At ICS we believe that ESG needs to be thought of both systematically and holistically. The first part of achieving this mindset shift is to recognise that, currently, the efficiency of ESG reporting frameworks for maritime is being undermined through a lack of harmonization. What may be considered good performance under one framework is not necessarily the same under another. Alignment of reporting standards on a global scale would help to overcome this by providing the clarity on reporting that industry desperately needs. Many shipowners and shipping companies are already working towards creating an ESG focused environment, for example through promoting diversity and inclusion in the workplace, practicing sustainable ship recycling, working towards decreasing greenhouse gas emissions. Now, we need to make sure we have alignment of reporting frameworks so that the work the industry is already undertaking to create an ESG-fit maritime industry is clear to all stakeholders.

Hendrik Stellamanns, Managing Director, COLUMBIA Cruise Services

Establish equal opportunities.  Young talent is hard to find nowadays. Education levels and education opportunities vary vastly which is a general concern; but looking at the issue through the glasses of the shipping industry it becomes even more apparent that we need equal opportunities driven by equal and up to date education.  New technologies, regulations and practices are surfacing continuously and are increasing the requirements and expectations from the industry. As a result of the digital transformation but also that of climate change, both at sea and ashore all talent is required to make profound changes in order to help accomplish the technological advancements that are central to achieving the goals that have been set.

George Teriakidis, Area Manager East Mediterranean & Black Sea, DNV Maritime

ESG is not only about compliance. It is very much about creating trust in stakeholders. For companies in shipping, regulators, banks, insurers, and investors are focusing more and more on managing ESG risks, forcing the maritime industry to show it has control of its ESG risk exposure. Understanding how ESG risks will be impacted by stakeholder expectations and future regulation is an essential first step. Then it’s about developing and building a process. Dialogues with stakeholders and an ESG materiality assessment can help to develop that understanding. Asking questions like: What is important for your company and why? Then looking at existing processes and finding the adjustments or additional measures are needed. But it’s not all gloom, ESG risks can be turned into opportunities if you can show stakeholders how your company meets or exceeds expectations. This is why having a robust ESG strategy and executing it, is essential.

Cecilia Müller Torbrand, Chief Executive Officer, Maritime Anti-Corruption Network (MACN)

Over the past decades the maritime industry has made progress in developing a culture of operationally focused workplace safety, whether employees are based in an office, on an oil rig, or onboard a vessel. The industry now has the opportunity to take these learnings to further its commitments towards an ESG-fit maritime industry. The Maritime Anti-Corruption Network (MACN) has seen first-hand how the governance aspects of ESG are fundamental to creating the right tone from the top, internal controls, and incentives to drive change across the Environmental, Social and Governance pillars. If the maritime industry fails to get the Governance right, it will founder in governing any of the ESG pillars or achieve its long-term sustainable development goals

Capt. Yves Vandenborn, FNI, Head of Loss Prevention Asia-Pacific, NorthStandard

Creation of something meaningful begins through conversation. For the right culture and mindset to take root, the importance and benefits of ESG to the maritime industry must be made clear to all stakeholders. This can be achieved though companies’ ESG reports. A consistent and transparent reporting mechanism is instrumental in facilitating stakeholders in their assessment of a company’s ESG performance. With increased engagement, stakeholders and companies can develop a better understanding of each other’s ESG expectations and requirements. Such interactions lay the foundations for the betterment of ESG issues in the long term. When such synergies reap returns, it will send ripples through the maritime industry and inspire companies to pledge commitment to ESG principles by integrating them into the company’s mission, vision, and values.

Sandra Welch, CEO, Seafarers’ Hospital Society

It is heartening to see shipping proactively work to address key issues impacting working culture, such as the planned updates to regulatory standards like the STCW and the MLC, focus on addressing the gender imbalance in certain sectors, and the prioritisation of a Just Transition for decarbonisation. We are making significant progress and I applaud it, even as I acknowledge that we have much left to achieve. It is now imperative that we not only implement changes that will anchor the headway shipping has achieved — whether at the level of individual organisations or at a wider regional and global scale — but also track successes or new/ ongoing challenges through anonymised industry benchmarking, such as with SHS’ Maritime specific KPI toolkit for seafarer welfare. This will allow our industry to lay the cornerstones of positive company culture: communication, collaboration, feedback and action.

Mike Yarwood – Managing Director, Loss Prevention, TT Club

We believe that the key is to work as one industry, supporting each other and facilitating the open flow of information, guidance and learnings from those further along their ESG journey. This is at the heart of TT Club’s mutual ethos. Our mission is to make the global transport and logistics industry safer, more secure, and more sustainable. To deliver on this mission, we recently launched an online ESG toolkit, sharing experience and knowledge from our membership and wider network of innovative solution providers – readily accessible to all. This is not the time to hold cards close to one’s chest – we will all benefit from being open and transparent about our successes and failures.

The views presented are only those of the author and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.