In an exclusive interview to SAFETY4SEA, Jan Dieleman, President, Cargill Ocean Transportation, Chair of the Sea Cargo Charter Association, and Chair of the Global Maritime Forum, highlights that the climate crisis is the biggest challenge, but only if addressing equally the Social and Governance elements, maritime industry can find a solution towards. For this purpose, industry must take leadership and join forces in creating a sustainable future.
urthermore, Mr. Dieleman notes that as long as there is no standard baseline for greenhouse gas accounting, it is difficult to benchmark emissions and here comes the Sea Cargo Charter which is a voluntary initiative that allows stakeholders to measure and report CO2 emissions in a standardized way.
SAFETY4SEA: What are the top priorities in your agenda with regards to the Sea Cargo Charter ESG for the next five years?
Jan Dieleman: The Sea Cargo Charter is a global framework for aligning ship chartering activities with climate goals. It establishes a common baseline for measuring CO2 emissions generated through chartering activities and publicly reporting them on an annual basis. It is an essential tool for taking meaningful action against the climate crisis. It provides an actionable methodology for Signatories to collaborate with our business partners and obtain data on the CO2 footprint of our activities, compare this data against GHG reduction trajectories, and track our progress year over year. But more than that – thanks to our commitment to transparently reporting our climate alignment scores – we send a message that taking climate action is a priority for us and that our participation in the Sea Cargo Charter is not just empty words. One of the top priorities for the Sea Cargo Charter Association is to strengthen the methodology of the Sea Cargo Charter. For the framework to remain relevant and robust, we are keeping track of the latest climate science and incorporating new knowledge into our methodology as it becomes available.
S4S: What are the key barriers that the maritime industry is currently facing with regards to ESG? What are your suggestions to turn these into opportunities?
J.D.: There is currently no standard baseline for greenhouse gas accounting. This means that it is difficult to benchmark emissions. We launched the Sea Cargo Charter to fill this gap – it is a voluntary initiative that allows us to measure and report CO2 emissions in a standardized way. By transparently reporting our climate footprint, we help keep companies accountable and encourage climate consideration weighting in their decision-making.
S4S: In your view, has our industry realized the importance of ESG? What should be the next steps towards an ESG-ready industry?
J.D.: I believe the maritime industry has realized that sustainability is not a niche trend but a system-wide transition that will only keep accelerating. We can sense this mindset shift in the membership of the Sea Cargo Charter. We launched the framework with 17 founding Signatories in late 2020. As of April 2022, the initiative counts 31 Signatories, and we expect many more to join. I believe the next step should be to expand our view of ESG. A lot of effort is currently being poured into the “E” in ESG – and these efforts should continue and accelerate to safeguard our future. However, we need to focus just as much of our energy on the “S” and “G.” The COVID-19 pandemic has shown that the human element of shipping is sharply undervalued and too often forgotten. Human sustainability issues such as human rights, wellbeing, safety, future skills and competencies, and diversity, equity, and inclusion also need to be addressed by all of us.
S4S: How can the maritime industry actually address all ESG requirements? What are the lessons learned from the Sea Cargo Charter?
J.D.: The Sea Cargo Charter gives Signatories consistent and common guidance on collecting emissions data on our environmental footprint. This provides us with a fact-based track record of our efforts to reduce emissions and evidence of their success – or failure. It also gives a head start in demonstrating our engagement to financiers, insurers, and other stakeholders who are increasingly asking for sustainability guarantees. I believe that applying this methodology to other ESG criteria would bring us a long way in addressing all ESG requirements. You can’t improve what you can’t measure and track. The Sea Cargo Charter provides a way to do this. While climate alignment is currently the only criterion considered, other environmental, social, or governance issues could be included in the framework at the discretion of the Signatories. Our framework can also serve as an inspiration for others committed to addressing global seaborne trade’s adverse impacts on people and the planet.
S4S: How do you expect ESG issues to evolve for the maritime industry in the coming years?
J.D.: Society is going through a transition towards more sustainability and reducing our impact on people and planet, and the maritime industry will need to follow. Companies will feel growing pressure from governments increasingly interested in corporate taxation and profit shifting, from customers who are calling for more due diligence and transparency throughout supply chains, and from investors committed to sustainable finance. I believe that the maritime industry will need to ramp up its efforts across all ESG criteria to retain its license to operate in the future. We play a vital role in global trade that has contributed to the historic growth of humankind’s prosperity. But this essential role brings the responsibility to perform it with respect towards people and planet. However, I’m optimistic about this challenge. Even as recently as five years ago, many people in the maritime industry were skeptical about how much could be achieved, but I believe we have already come a long way.
S4S: If you could change one thing in the industry to boost ESG awareness from your perspective what would it be and why?
J.D.: Increasing transparency is paramount. Publicly reporting climate alignment under the Sea Cargo Charter is what keeps us accountable to our targets. It might not be an easy commitment to make, and we recognize that our climate alignment scores sometimes might not make us appear in the best light. However, we must not make the perfect the enemy of the good. The Sea Cargo Charter recognizes that shipping decarbonization will be an incremental process and offers us a way to begin addressing the adverse impacts of our activities and continue adjusting along the way.
S4S: Do you have any new projects/ plans with regards to ESG that you would like to share with industry stakeholders?
J.D.: I would like to highlight that the first reporting period for Sea Cargo Charter is fast approaching. In June, Signatories will reveal their climate alignment scores and what they have learned so far from gathering and analyzing their emissions data. I look forward to seeing the insight this will provide us into our decarbonization journey, individually and at an industry level. In addition, I am excited to see a new initiative on the human element within the maritime industry starting to take shape. Our collective progress on diversity in the maritime industry is lacking behind other industries. This needs to change, which is why I have been working with other industry leaders, since the Global Maritime Forum’s Annual Summit in 2020, to establish the All Aboard Alliance – set to formally launch in May 2022. The Alliance will work towards a more diverse, equitable, and inclusive maritime industry to solve the long-term challenges the industry is confronted with and that require a strategic and immediate collective push for improvements.
S4S: What is your key message to industry stakeholders towards sustainable shipping?
J.D.: Join us. To be successful, we need to collaborate. Thankfully, many collaborative initiatives exist: the Sea Cargo Charter, the Poseidon Principles and the Poseidon Principles for Marine Insurance, the Getting to Zero Coalition, and many more. The climate crisis is the biggest challenge we face, and we need to work together to meet it with the urgency needed. However, to make sure the solution is fair and equitable for everyone, it is imperative that we also consider its social and governance elements. We as an industry must take leadership in co-creating a sustainable future for ourselves as well as society. So I repeat: Join us. Your voice is important.
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.