Shipping finance “moves closer” to maritime decarbonisation
The global finance portfolio for shipping has moved closer to alignment with ambitious decarbonisation trajectories set by the International Maritime Organization (IMO), according to a new report.
The new insights in The Poseidon Principles’ fifth Annual Disclosure Report, showed climate alignment of 35 major financial institutions across 13 countries, representing nearly 80% of the global ship finance portfolio.
The Poseidon Principles are a global framework for financial institutions to assess and disclose the climate alignment of their shipping portfolios, aiming to promote decarbonisation in the maritime industry.
Key findings include a rise in transparency, with an average of 93.3% of signatories’ portfolio activity reported, with all signatories reporting ship emissions data from at least 70% of their portfolio, 28 signatories achieving a reporting rate of 90% or above, and eight achieving 100%.
The average climate alignment scores also showed a noticeable progression from last year, with portfolios’ alignment to the IMO’s “minimum” and “striving” decarbonisation trajectories improving. Collaboration and engagement are increasing too between financial institutions and their shipping clients.
This year’s report, which marks the fifth anniversary of the Poseidon Principles, highlights the progress achieved since its launch in 2019, when it became the world’s first sector-specific framework for measuring and reporting climate alignment in shipping finance. By integrating real emissions data into financial decision-making, the framework has also enabled signatories to use climate alignment scores to shape financing decisions, guide sustainability-linked lending, and support investment in green technologies such as biofuels and alternative propulsion systems.
While celebrating significant progress, the report also acknowledges the challenges of aligning with IMO’s ambitious roadmap.
Michael Parker, Poseidon Principles Chair and Chairman of Global Shipping & Logistics, Citi, said:
“The Poseidon 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.
“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, 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.”
Image of report courtesy of the Poseidon Principles