Global shipping accounts for nearly 3% of the world’s CO2 emissions and the industry is under pressure to reduce those emissions and other pollution.
About 90% of world trade is transported by sea.Last year, a group of leading banks signed up to environmental commitments known as the Poseidon Principles, whereby financiers take account of efforts to cut CO2 emissions when providing loans to shipping companies.
The principles establish a common baseline to assess whether lending portfolios are in line or behind the climate goals set by the U.N. shipping agency, the International Maritime Organization (IMO).
In the first climate assessment report issued by the signatories, which includes emissions data collected from borrowers, just three of 15 financiers – Bpifrance Assurance Export, Export Credit Norway and ING – were aligned with IMO decarbonisation targets in 2019.
“This is not about comparative scoring but taking portfolios as existed at the end of 2019 and creating a starting point for each signatory to improve or get into alignment by taking the relevant decisions on the new business they do,” Michael Parker, chairman of Citi’s globalshipping, logistics and offshore business, told Reuters.
The IMO aims to reduce the industry’s greenhouse gas emissions by 50% from 2008 levels by 2050, a target that will require the swift development of zero or low emission fuels and new ship designs using cleaner technology.Other lenders that have signed up to the principles are ABN AMRO, Amsterdam Trade Bank, BNP Paribas, CIC, Citi, Credit Agricole, Danish Ship Finance, Danske Bank, DNB, Nordea Bank, Société Générale, Sparebanken Vest.A further five – Credit Suisse, DVB Bank, SEB, SpareBank 1 SR-Bank, Sumitomo Mitsui Trust Bank – will submit their first assessments in 2021.