Climate transparency from financial institutions is on the rise, and its implications for the global shipping portfolio are significant. This article delves into the details of The Poseidon Principles' fifth Annual Disclosure Report and explores how it is shaping the future of decarbonisation in the maritime industry.

Unveiling the Path to Shipping's Decarbonisation

Transparency: A Key Driver of Change

The latest Annual Disclosure Report by The Poseidon Principles showcases a remarkable increase in transparency. An average of 93.3% of signatories' portfolio activity is being reported, with all reporting ship emissions data from at least 70% of their portfolio. Twenty-eight signatories achieved a reporting rate of 90% or above, and eight even reached 100%. This level of transparency is crucial in understanding the climate alignment of major financial institutions and their shipping portfolios.It allows for a more accurate assessment of the progress made and the challenges that lie ahead. By having a clear picture of emissions data, financial institutions can make more informed decisions and take appropriate actions to promote decarbonisation.

Climate Alignment: Stepping Towards a Greener Future

The average climate alignment scores have shown a notable progression from last year. Portfolios are aligning better with the International Maritime Organization's (IMO) "minimum" and "striving" decarbonisation trajectories. This indicates that financial institutions are actively working towards reducing emissions and moving towards a more sustainable future.The adoption of well-to-wake emissions reporting by The Poseidon Principles in 2023 has set a new benchmark for climate reporting. It encompasses full lifecycle emissions of fuels and supports the IMO's latest ambition. This comprehensive approach helps in addressing the operational complexities faced by certain vessel types and provides a solid foundation for achieving net zero emissions by 2050.

Collaboration: The Power of Collective Effort

Collaboration between financial institutions and their shipping clients is on the rise. This initiative is playing a pivotal role in guiding the industry towards net zero emissions. By working together, financial institutions can provide the necessary support and resources to shipowners for the investment in green technologies such as biofuels and alternative propulsion systems.Increased transparency has fostered closer relationships between financial institutions and shipowners, reinforcing their shared commitment to decarbonisation. This collaborative effort is essential in overcoming the challenges and achieving the IMO's ambitious roadmap.While significant progress has been made, there are still challenges to overcome. Aligning with the 2050 net zero goals remains a complex task, especially for certain vessel types. However, with the tools and frameworks like The Poseidon Principles in place, there is hope for a more sustainable shipping industry.…said Paul Taylor, Vice Chair of the Poseidon Principles and Global Head of Maritime Industries, Societe Generale.DOWNLOAD THE REPORT HERE