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ESG towards Sustainable Shipping
Wearing my NAMEPA hat, I was invited by Green4Sea to participate in their Annual Forum discussing ESG and sustainability. It was my honor to be included amongst a panel which featured Kostas Gkonis, Secretary General, INTERCARGO; Jan Fransen, Executive Director, Green Award Foundation; Stavros Meidanis, Managing Director & Chief Sustainability Officer for Capital-Executive Ship Management Corp; and Maria Kryratsoudi, Business Development Manager for ABS.
With the topic of the day being sustainability, we were asked what should be the industry’s top priorities for sustainability? I won’t speak for my fellow panelists, but I responded that companies need to have a clear sense of what ESG is, how it applies to their current practices. Then they need to know where they are now, where they need to be, and how to get there. There are many tools to assist in that, including NAMEPA’s Maritime Sustainability Passport, Sustainable Shipping Initiative’s roadmap and others with an eye for “end to end” impacts. Sustainability must be the “new normal” especially in the face of increased public scrutiny.
We were then asked which are the key barriers towards a more sustainable industry and how these can be turned into drivers and opportunities? I replied in order to manage a global industry and ensure equity, or at least a level playing field, we need strong regulation which will not be proscriptive in HOW we reach goals but will set those goals so that industry moves collectively towards them. Following, those regulations must be enforced by the governing bodies—flag and port state control.
Additionally, industry needs the financial support from all related parties in order to achieve these global goals. Investment in research and development, as well as an assignment of the costs across the entire value chain, from manufacturers to charterers to passing along the cost to the consumer. Recently someone said the compliance cost would result in about a 7-cent increase in a pair of shoes.
Finally, it should go without saying that we all need to be equally committed to success. This is an effort to ensure a future for our planet and our human race. We all need to be participants, not merely bystanders expecting the other person to be the player.
Lastly, we were asked if there are any best practices and lessons to be learned from the past and/or other industries? I don’t believe we have to look to the past or to other industries to see the emergence of best practices. Collaboration is key, and we are seeing more and more of them develop and become effective. We have a good foundation of success upon which we can develop, including recent ones, where our industry has acted in concert to achieve a goal. Last year’s adoption of IMO2020 Low sulfur fuel cap is one where a significant global regulation was implemented successfully and nearly seamlessly. A lot of work went into preparing for it, and it worked. I believe the key is to have clear goals, require a high level of transparency, and be prepared for the tough work of enforcement. The requirement for double hull tankers and the ISPS Code are others which have dramatically improved industry’s safety record.
We also cannot lose sight of the work we need to do in the “Social” and “Governance” side of the equation as demonstrated by the recent crew change crisis. As an industry, we need to do more to harmonize higher standards of support for our mariners. Through collaborations such as the Neptune Declaration we can achieve this.
With the recent grounding of the Ever Given in the Suez Canal, we are in the public’s eye. Let’s make sure what they see is the value proposition of our industry as the most efficient mode of transporting goods and energy.
To learn what the other panelists had to say, register for Green4Sea’s Virtual Forum being held April 21st and 22nd! I’ll “see” you there!