ESG in Shipping
Section 1
ESG Reporting Frameworks and Standards
Section 2
Mapping ESG Compliance – How Shipping Adheres to ESG Factors via Regulation
Section 3
ESG Reports in Shipping – A How To Guide
What is ESG?
ESG stands for Environmental, Social and Governance factors, and is a collective term to describe data collection of those factors to help businesses assess the risks and opportunities that may arise from environmental, societal and governance developments.
E – Environmental : measures undertaken to consider environmental impacts. This may include, for example:
- Reduction of carbon/GHG emissions through increasing operational efficiency
- Reduction of marine pollution and promotion of bio-diversity
- Enhancing and ensuring environmentally sustainable practices of ship recycling
- Increasing energy efficiency in both onboard and onshore practices
S – Social : measures which contribute to enhancing fair and equal employment opportunities, working environments. This may include, for example:
- Preventing abuse within supply chain, compliance with labour standards
- Providing sufficient training, supporting health, safety and wellbeing of personnel
- Promoting safeguarding of human rights, equality in the workplace, diversity and inclusion as standard
- Ensuring product is safe and customer data is secure
G – Governance: measures which enhance a business’ ethical behaviour and transparency to stakeholders about its activities. This may include, for example:
- Accurate and transparent financial reporting
- Anti-corruption measures, prevention of bribery for example
- Compliance with all applicable legal requirements, e.g. sanctions
- Ensuring leadership and managers are accountable for risk and performance management
Why is ESG important in shipping?
It is essential that the shipping industry, globally regulated by the UN International Maritime Organization, holds itself to the highest possible standards of operation when it comes to protection of the environment, safety and security of navigation and of ship, crew and passengers. Recognition of, and compliance with, ESG (Environmental, Social, Governance) sustainability factors is fast becoming integral to maritime transport business operations. ICS, in its horizon scanning capacity, provides key insight into what ESG means for the industry, how companies can enhance their ESG reporting on current sustainable practices, and ultimately continue to attract investment of finance and talent to contribute to the green transition.
Shipping is a capital intensive industry in the midst of the green transition. To achieve shipping’s ambitious environmental goals, we need to de-risk investment opportunities to facilitate the development of new green technologies and new sustainable operational practices. The industry must also ensure that shipping companies can attract and retain exceptional talent to help advance the green transition over the next 4 decades.
Investors, customers and stakeholders are increasingly looking to companies ESG factors to influence their investment decisions, impacting the ability to raise capital, enhance business sustainability and ultimately contribute to the resilience of the global maritime supply chain. To remain relevant, forward-looking and attractive, the shipping industry must be willing to interpret the actions it is already undertaking for the betterment of society, in an ESG light.
Disclaimer:
The information about ESG frameworks, reporting standards, providers and services contained on this website does not constitute endorsement or recommendation by ICS.