Environmental Social Governance reporting is an emerging requirement, predominantly coming from investors and financial institutions, while charterers and other stakeholders are closely following, and it is directly related to the company’s Sustainability strategy and the efforts to achieve the ambitious targets of IMO.
In September 2015, the United Nations’ 193 Member States unanimously adopted the 2030 Agenda for Sustainable Development, including the 17 Sustainable Development Goals (SDGs) and 169 related targets. The Agenda emphasizes the need to simultaneously consider the three dimensions of sustainable development: social, economic, and environmental.
IMO announced an initial strategy to reduce shipping Greenhouse Gas (GHG) emissions to half of 2008 levels by 2050, in order to assist global climate ambitions of ensuring world temperatures do not exceed a 2 ◦C or 1.5 ◦C rise. As a result, shipping companies face an increasing need for regulatory compliance and optimization initiatives to sustain this transition period of IMO’s ambitious targets for emissions reduction through to 2030 and further to 2050.
Ocean Finance addresses the above requirements with the development of the OF “ESG – Sustainability Strategy” service, recognizing the growing interest from the ship owning companies and their stakeholders (designers, financiers, ship managers, charterers, etc.) for green and sustainable operations. The service provides a structured approach for the companies to build their sustainability strategy and meet the Environmental, Social, and Governance requirements, thereby ensuring a high degree of visibility and demonstrating to their stakeholders that they remain committed to safe, reliable and efficient operations.
We assist shipping stakeholders to
- Build their Sustainability Strategy to achieve compliance with decarbonization regulation, access to Ship Finance in line with increased demand for Green projects and optimum commercial and operations performance
- Identify commercial, technical and operational metrics and initiatives
- Specific to the company’s structure, size, planning and its operated fleet
- Measurable in a practical, results oriented method using the company’s existing tools
- Achievable with the company’s available technical resources and human capital
- Relevant to the compliance and optimization targets of the company
- Time-bound by the regulation deadlines and fleet commercial and operational constraints
- Develop ESG report in line with requirements of Financial institutions for Green financing (Poseidon principles, Green Loan Principles by ICMA, EU taxonomy regulation, Green Deal), the Global Reporting Initiative [GRI] standards and Sustainability Accounting Standards Board [SASB] materiality table linked to UN 17 Sustainable Development Goals, adopted by IMO
- Add value to Shipping Stakeholders by framing Company’s ESG performance through increased transparency, systematic measuring, reporting and improvement of major operational metrics, evidencing company’s initiatives and strengths in the commercial and technical performance of the fleet
- Engage all departments of the company in a cross-functional activity to collect, combine and process data relevant to Commercial activity, Legal concerns or disputes, Financial data, Technical matters and solutions, HSQE performance, Operational aspects, Supply requirements, HR details and initiatives, Crew matrix, Administration activities
- Align and Report actions in line with regulation and market standards
- Environmental regulation includes IMO 2030 – 2050 GHG reduction, IMO 2020 LS Cap, EEXI/ CII, IMO DCS/ EU MRV, IHM/ Hong Kong Convention HM, BWMS
- Social aspects refer to crew welfare, personnel turnaround, training and skills development, other social initiatives
- Governance (Internal audit, Diversity and inclusion, Integrity)
- Fleet planning (Fleet composition, Employment structure, Port Calls, Utilization, Reliability)
- Deliver an informative ESG report and its periodic updates, with the scope to solidify the position of the Company to the interest of its Shareholders, Employees and Management, address the needs and sensitivities of its Investors, Lenders, Charterers, Vendors and the wider shipping community the Company interacts with, and emphasize the values, ethics and best business practices adopted from Company’s inception to date
- Compose ESG Matrix with granular data input from different stakeholders, sourced by way of questionnaires, table filling, calculations or expert advice for the qualitative and quantitative assessment of:
- Environmental Issues (GHG emissions, ecological impacts)
- Employee Health and Safety
- Business Ethics
- Accident and Safety Management
- Fleet Metrics and operational data
- Propose Strategy and Select metrics: Compliance with regulation and optimization initiatives are identified from a pool of energy efficiency devices or operational measures for existing ships or by replacing older ships with new highly efficient vessels as well as by identifying areas for improvement on a social or governance level. The selected strategy is used to define the appropriate metrics for reporting, and targets for further improvement
- Collect and process data
- Commercial activity: Off hires, Spot vs Term charters, TCE
- Legal activity: Outstanding cases, Disputes resolution
- Finance: Key financial metrics
- Technical: Ships DD/ SS, Retrofits, Energy Efficiency Initiatives
- HSQE: LTIs, Class records, PSC records, Training
- Operations: Bunkering Activity, Hours at Ports, Deviations
- Supply: Procurement procedures, Costs, Logistics
- HR: Benefits, Objectives and Reviews
- Crew: Time on board, Crew Matrix, Internal Promotions
- Administration: Social Responsibility, Working Hours, Personnel Rewards
ESG Report from Concept to Publishing
ESG report serves as a guidebook to company’s commitment to future improvement and a communication tool with external stakeholders. Company’s sustainability strategy as comprehensively presented in the report is a reference point for its compliance with existing and upcoming environmental regulation, a link with the various risk factors the company understands, evaluates and mitigates, and also a green passport for sustainable ship financing.
Sustainability Strategy. We assist the Company in developing a corporate specific pathway to sustainability by identifying the commercial, technical and operational activities which will bring measurable results, using company’s existing tools and practices, on a timely and consistent manner.
ESG Performance. The Environmental Social Governance Report is the outcome of the coordinated activity of Company’s Departments to collect, analyze and present in a consistent and coherent format their individual work towards the joint purpose of delivering quality shipping services while staying compliant with the regulation and adherent to the principle of sustainable growth.