Subscribe to our Mailing Lists (It's free!)
Tuesday, May 17, 2022
SAFETY4SEA
  • Home
  • Safety
    • All
    • Accidents
    • Alerts
    • Loss Prevention
    • Maritime Health
    • Regulation
    • Safety
    • Seafarers
    • Security
    lessons learned

    Lessons learned: Lack of situational awareness leads to injury

    lessons learned

    Lessons learned: Dropped object with potential for injury

    iranian navy prevents piracy

    Iranian Navy prevents piracy attack on ship in Gulf of Aden

    Watch: RoPax ferry hits product tanker at dock

    Watch: Containership catches fire off East China sea

  • Green
    • All
    • Arctic
    • Ballast
    • Emissions
    • Fuels
    • Green Shipping
    • Pollution
    • Ship Recycling
    • Technology
    neste

    Neste achieves up to 80% emissions reduction with co-processed marine fuel

    scandlines

    Scandlines achieves up to 20% emissions reduction on ferry using wind power

    eastern pacific

    Eastern Pacific to retrofit two tankers with carbon capture and filtering systems

    suez canal

    Suez Canal Economic Zone signs $10 billion deal for production of green fuels

  • Smart
    • All
    • Connectivity
    • Cyber Security
    • E-navigation
    • Energy Efficiency
    • Maritime Software
    • Smart
    emsa drones

    EMSA drones to offer Denmark maritime surveillance

    TotalEnergies launches global drone-based methane and CO2 detection campaign

    TotalEnergies launches global drone-based methane and CO2 detection campaign

    remote offshore inspections

    Demonstration shows capability of drones to conduct remote offshore inspections

    uk ship shore integration

    North Star to use AI to cut SOVs emissions

  • Risk
    • All
    • CIC
    • Detentions
    • Fines
    • PSC Focus
    Ships Re-Inspected in the same port (RSP%): Key considerations

    Ships Re-Inspected in the same port (RSP%): Key considerations

    trade groups bottlenecks

    Ships Inspected vs Ships Called: An indicator for challenging ports

    abuja mou

    Abuja MoU: Just 14 West Central Africa countries carry out port checks on ships

    Deficiencies per Detention (DPD): An important KPI for Global Detentions

    Deficiencies per Detention (DPD): An important KPI for Global Detentions

  • Others
    • All
    • Diversity in shipping
    • Maritime Knowledge
    • Offshore
    • Ports
    • Reports
    • Shipping
    • Sustainability
    • Videos
    imo oceans

    Watch: IMO’s actions to protect the oceans

    amsa gender equity

    Watch: AMSA discusses importance of gender equity in shipping

    wildlife smuggling

    IMO agrees on guidelines to tackle wildlife smuggling

    women in maritime

    Maritime Authority of Jamaica: Women are advancing up the maritime career-ladder

  • Columns
    Career Paths: Catarina Fant, Wasaline

    Career Paths: Päivi Brunou, Wärtsilä Voyage 

    Career Paths: Catarina Fant, Wasaline

    Career Paths: Catarina Fant, Wasaline

    “Zero-Emission Shipping Mission” Roadmap promotes new green maritime solutions

    How EU ETS and IMO CII will change the Owner – Charterer relationship

    Trending Tags

    • Career Paths
    • Industry Voices
    • Maripedia
    • Maritime History
    • Resilience
    • Seafarers Stories
    • SeaSense
  • Events
  • Plus
No Result
View All Result
  • Home
  • Safety
    • All
    • Accidents
    • Alerts
    • Loss Prevention
    • Maritime Health
    • Regulation
    • Safety
    • Seafarers
    • Security
    lessons learned

    Lessons learned: Lack of situational awareness leads to injury

    lessons learned

    Lessons learned: Dropped object with potential for injury

    iranian navy prevents piracy

    Iranian Navy prevents piracy attack on ship in Gulf of Aden

    Watch: RoPax ferry hits product tanker at dock

    Watch: Containership catches fire off East China sea

  • Green
    • All
    • Arctic
    • Ballast
    • Emissions
    • Fuels
    • Green Shipping
    • Pollution
    • Ship Recycling
    • Technology
    neste

    Neste achieves up to 80% emissions reduction with co-processed marine fuel

    scandlines

    Scandlines achieves up to 20% emissions reduction on ferry using wind power

    eastern pacific

    Eastern Pacific to retrofit two tankers with carbon capture and filtering systems

    suez canal

    Suez Canal Economic Zone signs $10 billion deal for production of green fuels

  • Smart
    • All
    • Connectivity
    • Cyber Security
    • E-navigation
    • Energy Efficiency
    • Maritime Software
    • Smart
    emsa drones

    EMSA drones to offer Denmark maritime surveillance

    TotalEnergies launches global drone-based methane and CO2 detection campaign

    TotalEnergies launches global drone-based methane and CO2 detection campaign

    remote offshore inspections

    Demonstration shows capability of drones to conduct remote offshore inspections

    uk ship shore integration

    North Star to use AI to cut SOVs emissions

  • Risk
    • All
    • CIC
    • Detentions
    • Fines
    • PSC Focus
    Ships Re-Inspected in the same port (RSP%): Key considerations

    Ships Re-Inspected in the same port (RSP%): Key considerations

    trade groups bottlenecks

    Ships Inspected vs Ships Called: An indicator for challenging ports

    abuja mou

    Abuja MoU: Just 14 West Central Africa countries carry out port checks on ships

    Deficiencies per Detention (DPD): An important KPI for Global Detentions

    Deficiencies per Detention (DPD): An important KPI for Global Detentions

  • Others
    • All
    • Diversity in shipping
    • Maritime Knowledge
    • Offshore
    • Ports
    • Reports
    • Shipping
    • Sustainability
    • Videos
    imo oceans

    Watch: IMO’s actions to protect the oceans

    amsa gender equity

    Watch: AMSA discusses importance of gender equity in shipping

    wildlife smuggling

    IMO agrees on guidelines to tackle wildlife smuggling

    women in maritime

    Maritime Authority of Jamaica: Women are advancing up the maritime career-ladder

  • Columns
    Career Paths: Catarina Fant, Wasaline

    Career Paths: Päivi Brunou, Wärtsilä Voyage 

    Career Paths: Catarina Fant, Wasaline

    Career Paths: Catarina Fant, Wasaline

    “Zero-Emission Shipping Mission” Roadmap promotes new green maritime solutions

    How EU ETS and IMO CII will change the Owner – Charterer relationship

    Trending Tags

    • Career Paths
    • Industry Voices
    • Maripedia
    • Maritime History
    • Resilience
    • Seafarers Stories
    • SeaSense
  • Events
  • Plus
No Result
View All Result
SAFETY4SEA

How ESG affects shipping: Key challenges

by Aishwarya Iyer
May 10, 2022
in Green Shipping, Maritime Knowledge, Opinions
esg shipping

Credit: Shutterstock

FacebookTwitterEmailLinkedin

 

During the 2022 GREEN4SEA Virtual Forum, Aishwarya Iyer, ESG Manager, RightShip, analyzed the role of ESG in shipping, and how it can affect the sector. Ms. Iyer highlighted the standards that help promote ESG, also citing the challenges that ESG pose to the maritime sector.

The need for shipping to decarbonise is well-documented and extensively discussed with clear goal-setting by IMO and other regulatory bodies. This forms the environmental aspect of ESG. However, there is greater awareness of the importance of crew welfare including safety, decent living/working conditions, medical care, mental wellbeing, among others, giving emphasis on the social aspect.

Now, the shipping sector has the opportunity to capitalize on these trends– clean fuels/upholding human rights – and catalyse real change by contributing to global sustainability goals

Stated Ms. Iyer.

All this, requires responsible governance that effectively oversees the implementation of measures under E and S pillars. Going forward, E-S-G will both complement and reinforce each other as responsibility towards the environment and towards seafarers increases.

RelatedNews

Book Review: How Tor Andreas Svanes affected shipping’s digital journey

Applying KAIZEN in shipping: Changing business through an endless process of improvement

GET THE SAFETY4SEA IN YOUR INBOX!

However, as with any change, there are challenges. Namely, there is a growing list of challenges and questions as shipping positions itself for meaningful impact through ESG. Among others:

  • What does ESG readiness look like?
  • What is the basis for a fair comparison on ESG factors?
  • Who will bear the cost of upgrading vessels or ensuring compliance with ESG elements?
  • How should we rate vessels or shipowners on ESG?
  • Does ESG ranking or scoring impact one stakeholder class disproportionately versus others?
  • Which ESG reporting standard/framework is most appropriate to use?

Standards and reporting frameworks

Speaking of standards and frameworks, currently there are a number of them, but four main standards are the:

  1. GRI (Global Reporting Initiative): This is focused on impact and addresses a broad range of stakeholders.
  2. SASB Marine Standard: This is a sector-specific standard focused on information needs of various stakeholders.
  3. Task Force on Climate-Related Financial Disclosures: It reports impact of an organisation on global climate.
  4. UN SDG: This is a broad blueprint aimed at achieving a sustainable future for all.

There are of course more frameworks, such as the ASEAN Sustainable Finance taxonomy, and the EU Sustainable Finance taxonomy, both of which are more region specific.

All these standards and frameworks exist so that information disclosed by companies can be compared with each other. Given the existence of multiple frameworks in this space, there is a movement towards aligning and consolidating these.

That is what happened after a lot of requests to consolidate these frameworks. In fact, the International Sustainability Standards Board (ISSB) was formed in November 2021 at COP26, to allow sustainability reporting to be at par with financial reporting. ISSB will consolidate the main ESG standards.

There is also the EU’s proposed Corporate Sustainability Due Diligence directive. This intends to enforce social responsibility in supply chains, such as no child labour, no slavery, tackling inadequate workplace safety, pollution, ecosystem degradation, while at the same time aligning with Paris climate goals.

Key ESG challenges in shipping

Environmental

  • Emissions from shipping.
  • Impact on marine life/marine biodiversity from spills or effluent discharge.
  • Shipbreaking – impact on marine ecosystems.
  • Underwater noise pollution.

Social

  • Access to medical care, clean water and sanitation, protection of mental health.
  • Protection of human and labour rights throughout the supply chain.
  • Adequate rest hours, appropriate working conditions.
  • Access to training and education.
  • Occupational health and safety management including adequate insurance.

Governance

  • Business ethics – port calls in countries ranked as corrupt; Incidents of bribery.
  • Governance (Oversight) relating to emissions management and environmental sustainability.
  • Governance (Compliance) relating to safety management, human and labour rights policies.
  • Transparency and end-to-end accountability.

How much money does shipping need, to decarbonise? 

Moving on to a slightly different topic, there are several studies that focus on the financing that shipping needs in order to achieve decarbonization. More specifically:

  • A study suggests that a US$ 6 trillion investment between 2020 and 2050 in green ammonia and renewable energy plants will be needed to decarbonise just 40% of shipping by 2050.
  • Another claims that US $3.1 trillion are required to finance fleet renewal and US$2.1 trillion are required to finance fleet growth over the next 5 years.
  • Finally, leading ship financiers currently provide US$300bn in financing every year. An additional US$1.7trn will be required until 2050, just to develop future fuels.

These large numbers clearly indicate the role that financial institutions will play in funding sustainability in shipping

Said Ms. Iyer, adding that banks and financial institutions will measure whether their portfolios are aligned to IMO climate goals and UN SDG which covers human and governance. This is being done through ESG assessment of shipping portfolios.

Then, shipping should find the real link between ESG and financing needs, by analyzing the stakeholder loop. Namely, corporates are looking for green investments, then banks are interested in green financing. In turn, shareholders demand sustainable business practices, before moving on to the regulators, who enforce compliance with ESG frameworks. Finally,  there are the institutional investors who look for green investment opportunities, which close the cycle, which then goes back to corporates.

Credit: Rightship

We see that the maritime sector can position itself as a key participant in attaining global net zero goals through transparent ESG reporting that in turn, offers credibility in obtaining financing and uplifting reputation

Finally, reduced maritime emissions, conservation of marine ecosystems, upholding human rights at sea, ensuring transparent and ethical operations, are all key factors in making a sustainable impact in maritime ESG.

Above article is a transcript text of Ms. Iyer presentation during 2022 GREEN4SEA Forum.

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.

Tags: decarbonizationESGgreen practicesGREEN4SEAreducing shipping emissionsSAFETY4SEAsustainabilityvideos
Aishwarya Iyer

Aishwarya Iyer

Aishwarya Iyer is ESG Manager at RightShip (world’s biggest third-party maritime risk assessment and due diligence organization) and is passionate about sustainability. Aish is an experienced financial analyst, having worked with leading players in the commercial and investment banking space. More recently, she has been actively involved in aligning ESG risks with broader financial risk management frameworks to enable focus on sustainable lending. She brings across this experience in promoting and anchoring RightShip’s sustainability proposition and helping the business and maritime community understand ESG risks and opportunities to support better decision-making.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

Ships Re-Inspected in the same port (RSP%): Key considerations

Ships Re-Inspected in the same port (RSP%): Key considerations

May 17, 2022
imo oceans

Watch: IMO’s actions to protect the oceans

May 17, 2022
MARITIME EVENTS

Newsletter

GET THE SAFETY4SEA IN YOUR INBOX!

Explore

  • Safety
  • Green
  • Smart
  • Risk
  • Others
  • Events
  • Plus

Useful Links

  • About
  • Disclaimer
  • Editorial Policies
  • Advertising
  • Contact

© 2021 SAFETY4SEA

No Result
View All Result
  • Safety
    • Alerts
    • Accidents
    • Loss Prevention
    • Maritime Health
    • Regulation
    • Safety
    • Seafarers
    • Security
  • Green
    • Arctic
    • Ballast
    • Emissions
    • Fuels
    • Green Shipping
    • Pollution
    • Ship Recycling
    • Technology
  • Smart
    • Connectivity
    • Cyber Security
    • E-navigation
    • Energy Efficiency
    • Maritime Software
    • Smart
  • Risk
    • CIC
    • Detentions
    • Fines
    • PSC Focus
    • Vetting
  • Others
    • Diversity in shipping
    • Maritime Knowledge
    • Offshore
    • Ports
    • Reports
    • Shipping
    • Sustainability
    • Videos
  • Columns
    • Opinions
    • Career Paths
    • Industry Voices
    • Maripedia
    • Maritime History
    • Seafarers Stories
    • SeaSense
  • Events
  • Plus

© 2021 SAFETY4SEA

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Disclaimer.