The global shipping finance sector continues to advance toward decarbonisation goals, aligning more closely with the ambitious trajectories set by the International Maritime Organization (IMO) to eliminate emissions from international shipping by 2050.
This progress is detailed in the Poseidon Principles’ fifth Annual Disclosure Report, which highlights the climate alignment of 35 major financial institutions spanning 13 countries. Together, these institutions represent nearly 80% of the global ship finance portfolio. Launched in 2019, the Poseidon Principles provide a global framework for assessing and disclosing the climate alignment of shipping portfolios, fostering transparency and promoting decarbonisation in the maritime sector.
Key Findings in the 2024 Report
- Rising Transparency: On average, 93.3% of signatories’ portfolio activity was reported. All signatories reported emissions data for at least 70% of their portfolios, with 28 achieving a reporting rate of 90% or higher, and eight reaching 100%.
- Improving Climate Alignment: Portfolio alignment with the IMO’s minimum and striving decarbonisation trajectories showed measurable progress compared to the previous year.
- Enhanced Collaboration: Financial institutions and shipping clients are increasingly working together to advance net-zero goals, underscoring the Poseidon Principles’ role in guiding the industry toward the IMO’s 2050 targets.
Five Years of Progress and Future Challenges
Reflecting on the framework’s evolution, Michael Parker, Chair of the Poseidon Principles and Chairman of Global Shipping & Logistics at Citi, emphasized its impact: “The Poseidon Principles have redefined what is possible in transparent climate reporting for the shipping industry. This milestone shows how far we’ve come in five years, but also serves as a reminder that we are now five years closer to critical decarbonisation targets for 2030, 2040, and 2050. We must accelerate efforts to ensure collective ambition turns into transformative action.”
Over the past five years, the framework has enabled financial institutions to integrate emissions data into decision-making processes. This includes sustainability-linked lending, investment in green technologies like biofuels and alternative propulsion systems, and closer collaboration with shipowners.
However, challenges remain, particularly for vessel types facing operational complexities. Paul Taylor, Vice Chair of the Poseidon Principles and Global Head of Maritime Industries at Societe Generale, noted: “While transparency levels are rising, alignment with 2050 net-zero goals remains a challenge. Adopting well-to-wake emissions reporting provides a solid foundation for addressing these challenges head-on.”
Setting New Benchmarks for Climate Reporting
The adoption of well-to-wake emissions reporting in 2023 marks a significant advancement, encompassing the full lifecycle emissions of fuels and aligning with the latest climate science. This shift reinforces the Poseidon Principles’ leadership in climate disclosure and has inspired similar initiatives in other industries, such as the Sustainable STEEL Principles for steel, the Sustainable Aluminium Finance Framework, and the Pegasus Guidelines for aviation.
As the Poseidon Principles enter their sixth year, the Association celebrates the collective progress made while acknowledging the urgency of meeting the IMO’s net-zero targets. The continued commitment of financial institutions, shipping clients, and stakeholders underscores the transformative power of collaboration and transparency in driving the maritime sector toward a sustainable future.
