Ardmore Shipping: ‘walking the walk’ on transparency

The shipping industry must continue to progress its green initiatives and policies if it is to reduce carbon emissions in line with the IMO’s goal of a reduction of at least 50% of greenhouse gas (GHG) emissions from shipping by 2050, compared to 2008 levels.

Although progress is being made, industry collaboration, financial incentives, further regulatory progress and the transparent reporting of environmental, social and governance (ESG) performance, across the board are key elements which need to be improved upon if the industry is to truly facilitate decarbonisation.

For example, there is no denying that current green financial initiatives, such as the Poseidon Principles, offer a framework and incentivise vessel owners to reduce their carbon emissions output and increase transparency around reporting. However, industry regulators need to do more in ensuring a level playing field to enable vessel owners to transition to cleaner technology and greener operations, while maintaining economic viability in a competitive market. For example, zero carbon fuels at present, are not economically feasible in comparison with existing fuels – and will probably never be price-competitive without the right incentives. Therefore, although environmentally sustainable operations are now central to commercial operations, the future of the shipping industry and the global environment, there is not yet the structure and regulation in place to facilitate such a momentous change.

At Ardmore, we view corporate governance benchmarking and the transparent reporting of ESG performance as increasingly important in encouraging a progressive and high-performing industry. For example, corporate governance benchmarking provides a set structure and industry standard to rank companies by corporate governance in a way which is impactful and telling over time. The top performing companies are the ones which align the interests of the management team, shareholders and broader society to enable an ethical and responsible performance.

We certainly welcome the increased focus on ESG performance and the focus on ESG considerations in corporate strategy and decision-making; more specifically the environmental performance and sustainable operations of a company.

We are proud to be playing a leading role when it comes to ‘walking the walk’ on transparency. We recently featured in analyst Michael Webber’s report, ranking #3 out of 52 for corporate governance quality as well as for the clear reporting of our fleet carbon emissions. We were also the first US-listed shipping company to report carbon emissions for its fleet on a quarterly basis during 2019. We understand the importance of transparent reporting in turning numbers into actionable data. Industry collaboration is a vital element in ensuring the successful implementation of new regulations, measuring industry performance and enabling digitalisation. With this in mind, we joined those leading in the industry as part of the Getting to Zero Coalition; a partnership between the Global Maritime Forum, the Friends of Ocean action, and the World Economic Forum, to support the decarbonisation of the maritime industry through collaboration.

To summarise, from the perspective of a tanker operator keen to lead in the shipping industry’s decarbonisation efforts, the technology and willingness to change currently exists. However, if we are to encourage positive and sensible regulatory change toward reducing GHG emissions, we must seek to implement a better regulatory framework and the right incentives to ensure vessel owners are not forced to choose between staying competitive in a tough market versus decarbonising operations.

Ardmore Shipping’s chief operating officer Mark Cameron is a panellist of the “How Covid-19 is transforming tanker operations” webinar taking place as part of the Tanker Shipping & Trade webinar week.

You can view previous webinars, in full, in our webinar library.