SHIP-FINANCING institutions participating in the Poseidon Principles initiative have moved closer to alignment with the International Maritime Organization’s 2050 decarbonisation, a new report has found.
The Poseidon Principles are a framework for financial institutions to assess and disclose the climate alignment of their shipping portfolios. The association published its fifth Annual Disclosure Report on 12 December via the Global Maritime Forum (GMF).
There are now 35 signatories to the principles, representing 14 countries and nearly 80% of the global ship finance portfolio. Financiers from Denmark, France, the USA, Norway, the Netherlands, Sweden, Switzerland, Japan, Finland, Singapore, Italy, the UK, Germany and Spain are all involved.
Signatories reported an average of 93.3% of their portfolio activity. They all reported ship emissions data from at least 70% of their portfolio, with 28 signatories achieving a reporting rate of 90% or higher, and eight achieving 100%.
The average climate alignment scores showed a “noticeable progression” from last year, according to the GMF, with improvement in portfolios’ alignment to the IMO’s “minimum” and “striving” decarbonisation trajectories.
GMF highlighted a rise in transparency and increased collaboration in this latest round of reporting.
Michael Parker, Poseidon Principles chair and Citi’s chairman of global shipping & logistics, said the principles have “redefined” what is possible in transparent climate reporting for the shipping industry.
“As we celebrate the fifth anniversary of this initiative, we recognise both the progress made and the opportunities ahead – this milestone shows how far we have come in five years but also serves as a reminder that we are now five years closer to critical decarbonisation targets for 2030, 2040, and 2050,” Mr Parker said.
“We must accelerate efforts, addressing key areas of misalignment and ensuring collective ambition turns into transformative action.”
Paul Taylor, vice chair of the Poseidon Principles and global head of maritime industries at Societe Generale, said, “We have much to celebrate in this annual disclosure report, especially in terms of increasing levels of transparency.
“However, 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.
“The Poseidon Principles will continue to evolve, setting new benchmarks for transparency and commitment to a sustainable future.”
GMF said climate disclosure reporting helps enhance the transparency and accountability of climate and environmental impact, risk management, and strategic planning of participating organisations and their clients.
The forum said the principles have “set the global standard for climate transparency in ship finance” and inspired other financial disclosure initiatives like the Sustainable STEEL Principles for steel financing, the Sustainable Aluminium Finance Framework for aluminium financing and the Pegasus Guidelines for aviation financing.
The 2024 Annual Disclosure Report is available here.
