While we are living a decade of action for climate and decarbonization across all business sectors, the need for identifying the critical ESG issues for our industry has emerged due to regulatory initiatives, investor expectations and stakeholders demand.
As such, we cannot overlook that decision making will be impacted from ESG topics and the first step should be to identify those and work on fostering an ESG-driven culture. In this context, Safety4Sea’s special column asks industry stakeholders to provide feedback on the following question: “Has the maritime industry realized the importance of ESG? Next steps towards an ESG-ready industry.”
Carleen Lyden Walker, CEO and Co-Founder, NAMEPA, IMO Goodwill Maritime Ambassador, said:
Global society is getting closer to the marine transportation system, especially with its demands for performance. What they are looking for is accountability for shipping’s ESG. While the focus for now is on the E, the S and the G are not far behind. In addition to your emissions, where do you stand on DEIA (Diversity, Equity, Inclusion, Acceptance)? What started as a “feel good” has now become a requirement. This is augmented by social justice organizations raising awareness through global communications, prompting companies such as Patagonia, Ikea, Cargill and others to demand performance indicators. Investors, too, are scrutinizing these metrics, begging the question: How does your company measure up? How will our industry be judged on the world’s stage?
Jan Dieleman, President, Cargill Ocean Transportation, Chair of the Sea Cargo Charter Association, and Chair of the Global Maritime Forum, NAMEPA Member, said:
I believe the maritime industry has realized that sustainability is not a niche trend but a system-wide transition that will only keep accelerating. We can sense this mindset shift in the membership of the Sea Cargo Charter. We launched the framework with 17 founding Signatories in late 2020. As of April 2022, the initiative counts 31 Signatories, and we expect many more to join. I believe the next step should be to expand our view of ESG. A lot of effort is currently being poured into the “E” in ESG – and these efforts should continue and accelerate to safeguard our future. However, we need to focus just as much of our energy on the “S” and “G.” The COVID-19 pandemic has shown that the human element of shipping is sharply undervalued and too often forgotten. Human sustainability issues such as human rights, wellbeing, safety, future skills and competencies, and diversity, equity, and inclusion also need to be addressed by all of us.
Oli Beavon, Managing Director, ITOPF, NAMEPA Association Member, said:
I think that the maritime industry is thinking about the environmental, social and governance aspects of what we do and I see significant effort from owners, insurers and regulators to up our game. I see ITOPF as part of the solution and we can work together with industry stakeholders to improve in all these areas. Are we doing enough? Not yet. We have a way to go to achieve the 17 UN sustainable development goals and for the industry to become carbon neutral, but the fact we are working on them is a good thing. As an organisation, ITOPF will strive to be a leading example and share our journey in coming years to invite collaboration and help others.
Yes, I think the industry is getting there in realizing the significance of ESG. Almost every maritime conference now has an ESG-themed discussion, indicating growing awareness of what the term means – that it’s not just being proactive about reducing emissions, although this is a crucial aspect – but also focusing on the S and G aspects of the sustainability journey. This means looking closely at the people involved in maritime through an equality and diversity lens, working to make it a sector that is accessible to all. General sentiment seems to be that shipping as a sector is much lacking in transparency. At RightShip we believe that you cannot manage what you cannot measure. To that end, I think next steps towards an ESG-ready maritime industry include harnessing data to regularly and honestly report on emissions levels and the impact of shipping on marine ecosystems, alongside a real focus on safety, crew welfare and responsible governance. A clearly articulated ESG profile provides a holistic picture of how the industry is functioning in its responsibility towards all stakeholders, including the community, employees, suppliers, shareholders and of course, the environment.
Maritime shipping is a capital-intensive industry attracting investments from around the globe. The measurable challenges and opportunities enabled by ESG provide a significant advantage for strategic decision-making. ESG performance has recently been embedded into shipping financing and there is also a growing number of shipping companies issuing ESG reports. However, whilst part of the industry may have realized ESG importance, it needs time to integrate ESG into their strategic orientation. To remain ahead of that momentum, the industry should demonstrate: (i) integrity for trustful and transparent ESG performance disclosure, (ii) adaptability to be able to navigate future ESG risks and uncertainties and (iii) cooperation to collectively drive impactful change.