Continued growth of climate transparency from financial institutions show that the global finance portfolio for shipping has moved closer to alignment with ambitious decarbonisation trajectories set by the International Maritime Organization (IMO), aiming to remove emissions from international shipping by 2050.
The new insights are revealed in The Poseidon Principles’ fifth Annual Disclosure Report, which showcases the climate alignment of 35 major financial institutions across 14 countries, representing nearly 80% of the global ship finance portfolio. The Poseidon Principles are a global framework for financial institutions to assess and disclose the climate alignment of their shipping portfolios, aiming to promote decarbonisation in the maritime industry.
This year’s report, which also marks the fifth anniversary of the Poseidon Principles, highlights the progress achieved since its launch in 2019, when it became the world’s first sector-specific framework for measuring and reporting climate alignment in shipping finance. What began as a conversation in 2017 and was introduced as a concept under development at the first Global Maritime Forum Annual Summit in Hong Kong in 2018 has since evolved into a model for industry-specific, transparent climate disclosure in shipping.
Key findings from the 2024 Annual Disclosure Report include:
- Transparency on the rise: An average of 93.3% of signatories’ portfolio activity was reported, with all signatories reporting ship emissions data from at least 70% of their portfolio, 28 signatories achieving a reporting rate of 90% or above, and eight achieving 100%.
- Climate alignment performance: The average climate alignment scores showed a noticeable progression from last year, with portfolios’ alignment to the IMO’s “minimum” and “striving” decarbonisation trajectories improving.
- Increased collaboration: Collaboration and engagement are increasing between financial institutions and their shipping clients, demonstrating the initiative’s pivotal role in guiding the industry toward achieving net zero emissions by 2050 in line with the 2023 IMO Greenhouse Gas Strategy.
Furthermore, by integrating real emissions data into financial decision-making, the framework has also enabled signatories to use climate alignment scores to shape financing decisions, guide sustainability-linked lending, and support investment in green technologies such as biofuels and alternative propulsion systems. Increased transparency has also fostered closer collaboration between financial institutions and shipowners, reinforcing a shared commitment to decarbonisation.
While acknowledging the significant progress, the report also acknowledges the challenges of aligning with IMO’s ambitious roadmap.
Alignment with 2050 net zero goals remains a challenge, in particular for certain vessel types that are facing operational complexities. Now, the Poseidon Principles’ adoption of well to-wake emissions reporting offers a robust foundation for addressing these challenges head on.
…said Paul Taylor, Vice Chair of the Poseidon Principles and Global Head of Maritime Industries, Societe Generale.
In 2023 the Poseidon Principles adopted well-to-wake emissions reporting, encompassing full lifecycle emissions of fuels and setting a new benchmark for climate reporting in line with the latest climate science and supporting the IMO’s latest ambition.
