Poseidon principles: big banks align to launch new green charter for shipping
A selection of the world's biggest banks have joined forces with the Global Maritime Forum and other industry leaders to develop the Poseidon Principles, a world-first global agreement among financial institutions seeking to decarbonise shipping. Will it work?The Poseidon Principles aim to reduce carbon emissions by aligning financial institutions' shipping portfolios with the IMO's target of a 50% emissions reduction by 2050. Credit: Flickr / International Maritime Organization.The initiative is named after the Greek God of the sea and, for the shipping industry at least, it is certainly expected to make waves. Adopted in June, the so-called Poseidon Principles aim to reduce carbon emissions in the sector by aligning financial institutions' shipping portfolios with the International Maritime Organization's (IMO) target of a 50% emissions reduction by 2050.
The global framework - which will establish a common way of assessing and disclosing whether a bank's lending portfolio is in line with broader climate goals - has been described as the first ever sector-specific, self-governing climate alignment agreement between financial institutions.
The initiative comes as industry figures call for “unparalleled innovation” across the entire maritime value chain to help accelerate the process of decarbonisation and meet the IMO's ambitious new climate goals.
“To deliver on ambitious climate targets, zero-emission vessels will need to enter the fleet by 2030,” said Søren Toft, chief operating officer of AP Møller-Mærsk. “This leaves us only ten years to develop the new marine fuels, propulsion technologies and infrastructures that will be required. The Poseidon Principles will help us catalyze this transition. ”
As part of the agreement, banks will pledge to make sure that any lending decision they make takes into account a variety of climate considerations. Dr Tristan Smith, reader in energy and shipping at UCL's Energy Institute, says that the goal is to bridge the long-term risk of climate change with the short-term decisions that usually get made within the sector.
“The Poseidon Principles are a mechanism to try and incorporate that long-term risk within the shorter-term time frame in which mortgages and loans are established and reviewed by financiers,” says Smith, who is on the advisory council of the Global Maritime Forum , an international non-profit organization.[...]
Patrick Kingsland, Ship Technology
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