Banks report emissions data for ship finance portfolios

A group of international banks have released emissions data relating to their ship finance portfolios, as part of the third Poseidon Principles Annual Disclosure Report, offering detailed information about vessels’ carbon footprints.

Out of the 28 financial institutions reporting their emissions data this year (up from 23 the year before), seven banks are aligned with the International Maritime Organization (IMO)’s stated ambition of reducing greenhouse gas emissions from international shipping by at least 50% by 2050.

“This year’s reporting is the most granular and extensive yet, and more banks have joined the initiative, which is very encouraging,” said Michael Parker, Chairman, Global Shipping, Logistics and Offshore, Citi, and Chair of the Poseidon Principles.

“I am pleased that signatories have been willing to be even more transparent about the make up of the carbon footprint in their portfolios. Being transparent is the only way we can make change happen and better support clients in the crucial years for shipping decarbonisation ahead of us.”

“We are on a multi-year journey, but with this data we can see our performance, and support our decision-making with insight. Reducing GHG emissions has become a priority in the maritime industry, including for ship finance. However, ships have a 20+ year lifecycle. It will take time for this trend to be reflected in our portfolios, even with the banks favouring low-carbon projects.”

The Annual Disclosure Report collates ship emissions data collected by lenders from their clients for their activities in 2021. This data is then compared to a decarbonisation trajectory for the same year to show whether, at that point in time, a ship finance portfolio was compatible with a 50% reduction of emissions by 2050.

This year’s report also introduces more granularity in the data reported. In addition to their overall portfolio climate score, 14 contributors disclosed individual scores for passenger vessel portfolios, cargo vessel portfolios, or both.

This data generally showed that COVID-19 continued to have a negative impact on climate scores due to congestion and the slow recovery in the cruise business, with much shorter cruises typical as the sector started to resume activity.

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Rob O'Dwyer

Rob is Chief Network Officer and one of the founders of Smart Maritime Network. He also serves as Chairman of the Smart Maritime Council. Rob has worked in the maritime technology sector since 2005, managing editorial for a range of leading publications in the transport and logistics sector. Get in touch by email by clicking here, or on LinkedIn by clicking here.

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