The Poseidon Principles’ group of shipping lenders has updated its framework for evaluating and reporting on the climate impacts of financial institutions’ shipping portfolios to strengthen the maritime industry’s commitments to curbing greenhouse gas (GHG) emissions
The Poseidon Principles, initiated in 2019 and by 2021 including financial institutions representing more than a third of the market for shipping finance, is a tool for assessing and managing the climate impact of ship lending portfolios. The initiative said it operates on climate alignment, accountability, enforcement and transparency and currently includes some 30 signatories.
With the revised alignment, signatories must incorporate the International Maritime Organization’s (IMO) updated climate targets, agreed at the Marine Environment Protection Committee (MEPC) 80 meeting in July 2023, into their lending decisions and reporting processes. The new targets will influence financing for vessels, infrastructure, and maritime projects.
IMO’s new targets update the organisation’s initial strategy on reducing GHGs – which focused on at least halving emissions by 2050 – to a new set of targets that require the industry to reach net-zero emissions close to 2050. IMO’s revised strategy also sets out ’indicative checkpoints’ in 2030 and 2050 with reductions in GHG emissions of at least 20% by 2030 and at least 70% by 2040.
Poseidon Principles chairman and global head of shipping at Citi, Michael Lichtenstein said, “In 2019, when we launched the Poseidon Principles, we chose to be transparent in our portfolio alignment against the then IMO ambition set in 2018. We, as the Poseidon Principles Association, are now raising our targets to align with IMO’s new ambition announced at the end of MEPC 80 this July. Our focus is on working with our clients to help them to a greener, more sustainable maritime future through the energy transition to net zero once the fuels, ships and technology are available at scale.”
According to the initiative, the Poseidon Principles reporting scope will be expanded to include all GHG types and to account for well-to-wake emissions, aligning with the revised IMO regulations.
"More detailed information will be provided in the fourth Annual Disclosure Report, published at the end of 2023. IMO’s evolving ambition is propelling us closer to a 1.5°C future. As it concentrates on enacting this forward-looking strategy, the Poseidon Principles has postponed the introduction of an extra pathway for measuring climate alignment with a 1.5°C future until 2024, in harmony with the processes of the Net-Zero Banking Alliance," the group said.
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