Copenhagen, 12 December 2024 – The latest findings from The Poseidon Principles, a global framework aimed at aligning shipping finance with ambitious decarbonisation targets, reveal significant strides towards meeting the International Maritime Organization’s (IMO) goal of eliminating emissions from international shipping by 2050. The fifth Annual Disclosure Report, published today, underscores the growing climate transparency within the shipping finance sector and highlights the efforts of 35 major financial institutions across 14 countries, collectively representing nearly 80% of the global ship finance portfolio.
The Poseidon Principles, launched in 2019 as the first sector-specific framework to assess climate alignment in ship financing, have made remarkable progress in driving the shipping industry towards its decarbonisation goals. Celebrating its fifth anniversary this year, the initiative has evolved from a concept discussed at the 2018 Global Maritime Forum Annual Summit in Hong Kong to a leading model for transparent climate disclosure—one that has influenced similar frameworks in other industries, such as steel, aluminium, and aviation.
Key Findings from the 2024 Report:
Increased Transparency: The report shows a marked improvement in transparency across the sector, with an impressive 93.3% of portfolio activity disclosed on average. Notably, all signatories provided emissions data for at least 70% of their portfolios, with 28 signatories reporting at rates of 90% or higher, and eight institutions achieving 100% emissions data disclosure.
Improved Climate Alignment: The financial portfolios of signatories have demonstrated notable improvement in aligning with the IMO’s “minimum” and “striving” decarbonisation pathways. The report shows that financial institutions are increasingly working to meet these targets, reflecting the shipping sector’s commitment to achieving net zero emissions by mid-century.
Growing Collaboration: The report highlights enhanced cooperation between financial institutions and shipping clients. This growing partnership is crucial for achieving the IMO’s 2023 Greenhouse Gas Strategy, which lays out the roadmap to decarbonisation by 2050.
Michael Parker, Chair of the Poseidon Principles and Chairman of Global Shipping & Logistics at Citi, emphasized the importance of this progress. “The Poseidon Principles have redefined the standard for transparent climate reporting in shipping,” he stated. “While celebrating the progress made over the past five years, we must recognize that we are now only five years closer to the critical decarbonisation deadlines of 2030, 2040, and 2050. There is still work to be done, and we must accelerate efforts to turn collective ambition into real, transformative action.”
A Clearer Path Toward Decarbonisation
The Poseidon Principles’ integration of real emissions data into financial decision-making is helping to shape sustainability-linked financing decisions, drive investment in green technologies like biofuels, and support the adoption of alternative propulsion systems. By making emissions data central to financial portfolios, the initiative fosters closer collaboration between financial institutions and shipowners, reinforcing a shared commitment to decarbonisation.
Despite the progress, the report acknowledges the continued challenges in achieving full alignment with the IMO’s net zero target, particularly for certain vessel types facing operational complexities.
Paul Taylor, Vice Chair of the Poseidon Principles and Global Head of Maritime Industries at Societe Generale, noted, “While there is much to celebrate, particularly in terms of increasing transparency, aligning with the 2050 net zero goal remains a challenge. The complexities of specific vessel types and operational limitations persist. However, the adoption of well-to-wake emissions reporting by the Poseidon Principles provides a solid foundation for tackling these challenges and setting new standards for transparency and sustainability in the maritime industry.”
Well-to-Wake Emissions Reporting
In 2023, the Poseidon Principles introduced well-to-wake emissions reporting, encompassing the full lifecycle emissions of fuels used in shipping. This move aligns the framework with the latest climate science and strengthens the initiative’s support for the IMO’s updated climate ambition.
A Global Standard for Transparency
Over the past five years, the Poseidon Principles have established themselves as the global standard for climate transparency in ship finance, inspiring similar initiatives in other sectors. These include the Sustainable STEEL Principles for steel financing, the Sustainable Aluminium Finance Framework, and the Pegasus Guidelines for aviation financing.
As the Poseidon Principles enter their sixth year, the Association celebrates the power of collective action and the tangible progress made in decarbonising global shipping. While challenges remain, the continued commitment from signatories, shipping clients, and stakeholders underscores the potential of collaboration and transparency in transforming the industry towards a sustainable future.
The Poseidon Principles’ continued growth and influence illustrate a significant shift in the shipping sector, marking a critical step forward in the industry’s journey towards achieving its 2050 net zero emissions target.
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