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SAFETY4SEA

SSI: Demand for ESG to become a key priority for shipping in the coming years

by Andrew Stephens
June 1, 2022
in Opinions, Sustainability
ESG in shipping

Credits: Shutterstock

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In an exclusive interview to SAFETY4SEA, Mr. Andrew Stephens, Executive Director at Sustainable Shipping Initiative & Ship Recycling Transparency Initiative, explains that addressing ESG requirements is not about making things more difficult for the maritime sector. To successfully address ESG, the maritime industry should strive for being transparent, using common sustainability reporting frameworks, and creating benchmarks to measure progress.

Mr. Stephens also highlights that currently decarbonization is a top priority for all business sectors. Latest IPCC report on climate change confirmed that we need to need to accelerate progress and urgently work towards a zero emission, sustainable shipping industry.

 

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SAFETY4SEA: What are the top priorities in your agenda with regards to ESG for the next five years?

Andrew Stephens: The top priority on everyone’s agenda is decarbonisation. At SSI, our focus at the moment is on making sure we decarbonise sustainably, taking into consideration the sustainability of alternative fuels and their production pathways – going beyond what’s being referred to as ‘carbon tunnel vision’ and exploring, for example, sustainable resource use, ecological impacts, and labour rights. We’re also starting to look at the design and construction phases of the ship lifecycle, and exploring how we can make ships more circular and thus more sustainable in the long run – reducing emissions from steel, making them easier to repair, and ensuring that their eventual recycling is safer and more sustainable.

 

S4S: In your view, has our industry realised the importance of ESG? What should be the next steps towards an ESG -ready industry?

A.St.: Many in the industry are certainly realising the importance of ESG factors, in particular as the push increasingly comes from shipping’s own stakeholders, including customers and investors who are in turn responding to pressure from their customers, regulators, among others. This is positive as pressure to change and become more sustainable comes from all sides, and as other stakeholder groups realise the opportunities and benefits of sustainability, shipping should not be left behind. However, the shipping sector is not a monolith, and we constantly see that the different industry segments (by vessel type, company size, geography and many other factors) are at different stages of their journey when it comes to ESG. Pushing for more awareness of these challenges throughout the industry is thus an important step toward action and raising the bar. So is proof of concept – developing, testing and scaling new technologies to show that it is possible to have a more sustainable shipping industry, and that ESG needs to be a core part of the business model – not a CSR exercise.

 

S4S: How maritime industry can actually address all ESG requirements? What are the lessons learned from other sectors?

A.St.: It’s important to be clear that addressing ESG requirements is not about making things more difficult for the maritime sector. It’s about identifying and addressing the externalities and negative impacts that shipping’s operations have today, whether through using fuels that pollute the air and marine environment, through lack of oversight when it comes to labour and human rights violations onboard ships, or through embedded practices of poor transparency. The only way to properly identify and address these issues is through transparency and reporting, and this will, sooner or later, become a requirement that shipowners need to comply with for regulatory reasons or if asked by lenders, investors, insurers, and/or customers. Thus, being transparent, using common sustainability reporting frameworks, and creating benchmarks to measure progress against are all key steps that the industry can undertake to address ESG requirements.

 

S4S: How will new trends, technologies, concepts and innovation influence our long-term ambitions and the way we achieve them towards ESG?

A.St.: New technologies and innovation can and will lead to a more sustainable shipping industry. Improvements to governance, transparency, carbon accounting, etc. will help shipping achieve things not possible or even dreamed of now. However, we cannot wait for the future to take action. We need to take action today based on the technologies and innovations available. We have what is needed to kickstart shipping’s decarbonisation. We have what is needed to create a more transparent industry. We have what is needed for improved human rights due diligence. So, the question becomes, how can we take action today to influence our long-term ambitions and the way we innovate for a more sustainable future?

 

S4S: How do you expect ESG issues to evolve for the maritime industry in the coming years?

A.St.: Demand for ESG will continue to grow and will become a key priority. Regulation will impact supply chains and make it imperative for shipping to be on a pathway to sustainability as governments try to keep their own economies in line with a 2-degree Celsius temperature increase. Scope 3 emissions will become a priority as shipping customers work to ensure their products are transported in a sustainable way, leading to more concern around the sustainability credentials of marine fuels as well the need for circularity to reduce resource use.

 

S4S: If you could change one thing in the industry to boost ESG awareness from your perspective what would it be and why?

A.St.: It would be making every stakeholder realise that they have a role to play in improving the shipping industry. Every company, every department and every individual can take action to make sure ESG factors are considered in every decision. No single stakeholder can do everything, but we can all do something – whether It’s raising an issue internally that you’d like to see prioritised, eliminating single-use plastics onboard, asking your suppliers about their sustainability credentials, or working to raise awareness of sustainability issues for shipping within your team.

 

S4S: Do you have any new projects/ plans with regards to ESG that you would like to share with industry stakeholders?

A.St.: All of SSI’s work touches on at least one of the three elements of ESG. On environmental and decarbonisation issues, we currently have ongoing work around the sustainability of fuels for shipping, as well as the potential for circularity throughout the ship lifecycle. Seafarers’ rights and wellbeing bring the often-forgotten S in ESG, and SSI’s Delivering on seafarers’ rights project launched last year, together with the Institute for Human Rights and Business, works to address systemic challenges facing seafarers. Finally, on the Governance side we have the Ship Recycling Transparency Initiative, which currently has 13 shipowners transparently disclosing their ship recycling policies and practices with the goal of driving change and positive impact in the industry.

 

S4S: What is your key message to industry stakeholders towards sustainable shipping?

A.St.: The IPCC report released in early April 2022 has shown that action needs to be urgent in order to cut carbon emissions and keep global temperature increase to below 2 degrees Celsius. According to Stephen Cornelius at WWF: “We know what we need to do and we can do a lot of it already, but every moment, every policy, every investment, every decision matters to avoid further climate chaos.” We know it’s possible for shipping to decarbonise, and we are seeing increased amounts of fuel trials, research projects, government commitments and other initiatives. What we need now is to accelerate progress, take on some of the research being generated, and urgently work towards a zero emission, sustainable shipping industry.

 

 

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.

SSI: Demand for ESG to become a key priority for shipping in the coming yearsSSI: Demand for ESG to become a key priority for shipping in the coming years
SSI: Demand for ESG to become a key priority for shipping in the coming yearsSSI: Demand for ESG to become a key priority for shipping in the coming years
Tags: Environmental Social Governance (ESG)future of shippingInterviewsSSIsustainabilitytrends
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Andrew Stephens

Andrew Stephens

Andrew has a truly international background in the maritime industry, working for leading maritime service providers, in the position of Chief Operating Officer, such as Wilhelmsen Ships Service and Wallem Group, in a career which has seen him working in the UK, UAE, USA, Norway and Hong Kong. He was responsible for leading and managing business transformation, continuous improvement, integration and change management programmes, drive strategic planning and implementation consequently delivering on improved customer satisfaction, business performance and efficiency. After a successful period in both international groups he joined The Sustainable Shipping Initiative in August 2018, where he is responsible for leadership of the Secretariat.

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