Poseidon Principles for Marine Insurance published the first Annual Disclosure Report, as a step forward towards transparency in the maritime and insurance sectors.
In the report, eight of the world’s leading marine insurers have gathered and published client data to track their hull and machinery insurance portfolio’s climate impact. The goal is to support the industry’s green transition.
This level of transparency is a major milestone on our journey to decarbonise the maritime industry
said Patrizia Kern, Chair of the Poseidon Principles for Marine Insurance initiative and Marine Strategy Advisor – CEO Office at Swiss Re Corporate Solutions.
On average, the Signatories’ portfolios are 12.7% above being aligned with reaching the UN maritime goal of at least 50% reductions of the annual greenhouse gas emissions from international shipping by 2050, compared with their level in 2008.
The second trajectory the Signatories track takes is more ambitious and has a goal of zero CO2 emissions in the middle of this century. The simple average score of the 100% CO2 emission reduction track is 20.8% above the alignment.
It is evident that there is work to do, but hard data and transparency is a necessary first step
In the report, member companies describe individual takeaways and how this new information will influence decision-making. According to Rolf Thore Roppestad, Vice Chair of the initiative and CEO at Gard “there is room for improvement, both in our climate alignment score and in the data collection process itself, but that is why we wanted to be part of the Poseidon Principles for Marine Insurance.”
Signatories’ climate alignment scores
From the data that the eight Signatories reported, the following results have been gathered. In terms of 50% CO2 reduction, the average score was +12.7%; the simple average of all the reported climate alignment scores was calculated with each score being assigned equal importance.
Moreover, Signatories’ scores ranged from +1.9% to +24.6%, with two of them having a score of +5% or less.
To support the ambition of the Paris Agreement, Signatories also agreed from the very start to report against the 100% CO2 reduction trajectory and be transparent disclosing two different climate alignment scores.
In terms of 100% CO2 reduction, the simple average score was +20.8%, with Signatories’ scores ranging from +9.8% to +34.4%; of the eight Signatories, one had a score of +10% or less.
At the end of the first year of the Poseidon Principles for Marine Insurance, some Signatories have indicated that they will use their climate alignment scores to initiate constructive conversations with their clients to promote and support the transition of the shipping industry towards its decarbonization goal.
Hence, encouraging transparency and opening fact-based dialogue on how to eliminate the climate-related risks of their portfolio. Additionally, some Signatories also recognize the need to keep on engaging with clients and partners to broaden the portfolio coverage in the future.
Some Signatories have also noted that this framework will help them reinforce their decision-making on risks and allow them to identify, adopt, and better inform their sustainable decisions and strategies.
For others, being a Signatory is a way to play their part to help reach the objectives set by the IMO and the Paris Agreement, through measuring and reporting the carbon emissions of their H&M portfolios.
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