In October 2022, we discussed how the Poseidon Principles Association had announced a more ambitious emissions reductions policy. In addition to aligning with the existing IMO aim to reduce greenhouse gas emissions by at least 50% by 2050 (relative to 2008 levels), signatories portfolios' would also align with the Paris Agreement’s target of ensuring global warming does not exceed 1.5 C above pre-industrial levels by 2100, as well as reaching net-zero carbon by 2050.
The third edition of the Poseidon Principles Annual Disclosure Report published in December 2022 showed that only 7 out of the 28 reporting banks were in line with the IMO's greenhouse gas reduction target, prompting, perhaps, some speculation that the targets being set were too ambitious. However, Michael Parker, Chair of the Poseidon Principles, is not discouraged, pointing out that it will take time for members' portfolios to reflect their focus on reducing greenhouse gas emissions. In addition, the report collates data reported by the signatories during 2021 and this data shows that during 2021, COVID-19 continued to have a negative impact on climate scores due to congestion and the slow recovery of the cruise business.
Since the Poseidon Principles were launched in 2019, the members have grown from 11 to 30, representing approximately $200 billion in shipping finance. There is no doubt then that financiers recognise that they have an important role to play in the drive to make shipping a greener industry.
To actually meet targets, however, will require all participants in the shipping industry to work together in a transparent and collaborative way. The good news is that initiatives are underway. For example, the UK and the US have agreed to launch a Green Shipping Corridor Task Force that will focus on developing green shipping routes.
Hopefully, the next edition of the Poseidon Principles Annual Disclosure Report will show that further progress has been made.