Shipping banks will for the first time incorporate climate considerations into lending decisions to incentivize maritime shipping’s decarbonization. Namely, the Poseidon Principles will be a framework for assessing and disclosing the climate alignment of financial institutions’ shipping portfolios.
The Poseidon Principles meet the policies and ambitions of the Initial GHG Strategy adopted in April 2018 by the IMO. They specifically set out a common baseline to quantitatively assess and reveal if financial institutions’ lending portfolios are complying with adopted climate goals. Therefore, they also serve as an important tool to manage critical investment risks.
The Principles aim to evolve over time as the IMO adapts its policies and regulations and when further adverse environmental and social impacts are identified for inclusion. They also aspire to support other initiatives developed to address climate, environment, and social risks, like the Principles for Responsible Banking, Energy Transitions Commission, and the Task Force of Climate-Related Financial Disclosures.
Moreover, the Poseidon Principles can be applied to lenders, relevant lessors, and financial guarantors including export credit agencies. They are implemented in internal policies, procedures and standards, as well as in all credit products secured by ships that fall under the purview of the IMO.
The founding Signatories of the Poseidon Principles are the following:
- Societe Generale Societe Generale
- ABN AMRO
- Amsterdam Trade Bank (ATB)
- Credit Agricole Corporate and Investment Bank (Credit Agricole CIB)
- Danish Ship Finance
- Danske Bank