A group of leading banks will for the first time include efforts to cut carbon dioxide emissions in their decisionmaking when providing shipping company loans, executives said yesterday.
International shipping accounts for 2.2 percent of global carbon dioxide emissions and the UN’s International Maritime Organization (IMO) has a long-term goal to cut greenhouse gas emissions by 50 percent from 2008 levels by 2050.
Working with non-profit organizations the Global Maritime Forum, the Rocky Mountain Institute and London University’s UCL Energy Institute, 11 banks have established a framework to measure the carbon intensity of shipping finance portfolios.
The banks involved in the “Poseidon Principles” initiative, which will set a common baseline to assess whether lending portfolios are in line or behind the adopted climate goals set by the IMO, represent about a fifth or US$100 billion of the total global shipping finance portfolio.
The results are to be published annually in individual sustainability reports and the data would be obtained by banks from borrowers under existing loan agreements.
“We are helping the shipping industry emerge into the 21st century in a responsible way,” said Michael Parker, global head of shipping at Citigroup Inc.
Those involved so far are Citigroup, Societe Generale SA, DNB ASA, ABN Amro Group NV, Amsterdam Trade Bank, Credit Agricole CIB, Danish Ship Finance A/S, Danske Bank A/S, DVB Bank SE, ING Groep NV and Nordea Bank AB.
Banks will in the longer term be more selective about which ships they include in their lending portfolios, bankers said.
“Will there be companies that will find it difficult to get finance as they have less efficient ships, yes, it will be a consequence of it — but it’s not going to be used to look for those companies and somehow find a way of getting them out,” Parker said.
Danske Bank global head of shipping Oivind Haraldsen said more institutions would join the efforts to cut the carbon footprint of the sector.
“All of us have to push — we as banks probably have more power than we are aware,” he said.
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