BNP Paribas, the world’s largest lender to global shipping, and Credit Suisse have signed up to the Poseidon Principles guidelines designed to accelerate decarbonisation efforts across the shipping industry
Signatories of the Poseidon Principles now represent around US$140Bn in loans to international shipping – about 30% of the total global ship finance portfolio.
This brings the number of financial institutions to have signed up to the initiative to 16, with more expected to join.
Poseidon Principles chair Michael Parker said this latest signing represented “another milestone for responsible ship finance,” adding “We welcome their leadership and we encourage other serious financial institutions to join them in serving global seaborne trade in a sustainable manner”.
Credit Suisse global head of ship finance Mario Béhé said Credit Suisse aimed to align its ship finance portfolio to be environmentally responsible, adding “Joining the Principles shows our clear and continued commitment to sustainable shipping – being there to support our clients in their business and in their transition to a low-carbon shipping industry.”
The Poseidon Principles were designed in 2019, to incentivise shipowners in reducing carbon emissions by 50% by 2050 and to help financial institutions to mitigate investment risks.
A new study from one of the associates of the Poseidon Principles, the Global Maritime Forum, says shipping will need capital investments over US$1Tn if it is to meet these goals.
At its launch, 11 lenders signed up to the initiative including Citi, Societe Generale, ABN Amro and ING.
The Principles are applicable to lenders, any relevant lessors, and financial guarantors including export credit agencies. They are implemented in internal policies, procedures and standards and applied in all credit products secured by vessels that fall under the purview of IMO. The Principles are also intended to evolve over time to include other issues that may arise.