The phrase ‘take action now’ couldn’t speak more truth when it comes to decarbonisation, gender diversity and ESG in the maritime industry today. Increasing diversity, enhancing ESG and attracting more talent into our industry will help to enhance creativity, adaptability and problem solving, thus adding value for partners at a critical time where we seek to decarbonise shipping.
All About Shipping’s Anny Zade sat down with Dorthe Bendtsen, Head of Corporate Services at global marine energy provider KPI OceanConnect, to discuss the significance of ESG and DEI in maritime.
Could you please summarise to what extent the shipping industry has taken on board the ESG principles?
Many maritime stakeholders would argue that there is more that can be done to improve shipping’s position on ESG. Considering the relatively small proportion of shipping’s impact, in terms of global Greenhouse Gas (GHG) emissions, there have been many developments on the ‘E’ principle. For example, at COP26 last year, it was commonly agreed that the International Maritime Organization’s (IMO) targets for decarbonisation were unambitious. Some shipping companies are now taking matters into their own hands by committing to more ambitious targets, such as having a net-zero basis by 2050.
But things are moving in the right direction. The IMO’s Global Sulphur Cap is improving local air quality in and around ports, more ships are running on biofuels or LNG, and more investment is going into preparing vessels for future fuels. This clearly shows there is growing momentum behind decarbonisation action. But as an industry, we must deliver on it, and we need to accelerate the pace. Keeping stakeholders informed on sustainability policies, setting ambitious targets, and developing action plans on how the industry should tackle GHG emissions can ensure the industry is aligned on the ‘E’ principle.
On the face of it, shipping may appear to be slow to fully embrace ESG principles compared to other industries. However, the industry increasingly promoting greater diversity and it celebrates women in shipping through many initiatives and a dedicated global day. KPI OceanConnect is a vocal supporter of women in the shipping and bunkering industries, and we will continue to augment our own initiatives in this area to drive greater diversity and inclusivity.
From a governance perspective, shipping is a sector that commonly comes under intense scrutiny and attitudes towards good governance have changed dramatically, and will continue to change. As a global organisation, we pride ourselves on our responsible and transparent approach to doing business, where trusted partnerships are a key component of our organisation’s sustainability.
For most, ESG is an incremental process and responsible companies aim to act in the right way today, as well as making sure that they’re positioned to act in the right way in the future. That’s why all aspects of ESG are now important to the shipping industry and being continuously progressed.
What more needs to be done to drive this forward?
The next step for the entire maritime value chain is to set targets on each pillar and ensure an appropriate level of focus on each. By publicly monitoring and measuring these targets, this will allow for true accountability and for others to track performance.
Although this does pose challenges, as there may be short-term reputational risks involved, a business is at a far greater risk if they don’t undertake to track performance in order to improve.
Starting today and being at the forefront of ESG reporting will create many opportunities. For maritime stakeholders, now is a good time to invest to get ahead and be more transparent.
How can ESG claims be verified?
ESG rating agencies exist to encourage greater transparency, and there are established models that provide scores measuring how well a business is implementing and adhering to these principles.
Businesses need to be clear about what they have achieved already and what they are aiming to achieve so that observers can evaluate them against their objectives. Currently this appears to be the best way an organisation can continually improve their performance, renew their licence to operate and contribute to a sustainable future for the industry.
Some shipping companies have already been evaluated in this way, but the industry generally lags behind when compared to other sectors. With the support of agencies already operating in this space for other sectors, an increase in the number of organisations with ESG ratings in the shipping industry should be expected.
Being transparent about the current status on ESG performance, will set you on the right path for tracking future performance.
An article in TradeWinds earlier this year quoted experts as saying that investors in shipping stocks are backing off on the “E” more than the “S” or “G”, as concerns over near-term “energy security” begin to overshadow demands to transition to alternative fuels and renewables “that may still be a thing of the distant future.” Does that chime with your discussions with industry people, and if so, how could the “E” be returned to its former prominence?
The demand fortransparency and doing the right thing in terms of ESG principles is here to stay, and comes not only from the public, lenders and regulators but also from internal stakeholders. Employees or end consumers may have a different view of the principles to an executive team, but the demand for accountability remains.
The shipping industry is facing major regulatory changes to reduce its impact on the environment in the coming years, and it has already started to tackle environmental matters.
This can be seen in the IMO’s Global Sulphur Cap that was implemented in 2020, which has made a significant impact on local emissions by shipping, as well as investments in dual-fuel ships that can bunker traditional and alternative fuels.
The Carbon Intensity Indicator (CII), which comes into effect in January 2023, will require the shipping industry to increase its carbon efficiency over time. Ship owners and operators will have to invest to meet these criteria, and it will be up to banks to start lending funds to help them comply. With or without the energy security challenges, the direction of the sector is set, and so the industry will need to work together around the constraints. Committing to transparency and working hard to meet the environmental goals and solve any challenges that stand in the way of achieving them is now essential.
With limited supplies available of ‘green’ fuel for shipping, how can the industry fulfil pledges to move rapidly to sustainable practices and newbuilding efficiencies?
Maritime decarbonisation is a journey with multiple pathways. As the marine fuels landscape continues to evolve, navigating this market requires innovation, trust, collaboration and knowing your counterparts.
Having conversations that engage the whole maritime value chain will encourage more investment where it’s needed. It’s essential to inject resources into the right points within the chain.
We’ve seen various industry players, large and small, coming together to collaborate on investment and R&D. As a marine energy solutions provider with a partnership approach, we’re always open to collaboration with industry stakeholders of all sizes.
By putting the right people together in the supply chain and sharing knowledge, shipping can make a positive impact. An example of this can be seen with the development of our future fuels division, that monitors the progress of alternative fuels. It has also led to more conversations with our partners, where we exchange knowledge and learn of their needs to support the industry’s decarbonisation trajectory. This places us in a prime position to support our partners in identifying and implementing the solutions needed to achieve the industry’s goals.
How practical is the international ambition to establish significantly more zero-carbon shipping corridors by 2030?
Green corridors are a good thing, especially for the companies, ports and countries involved as they should reduce the cost of decarbonisation and speed up the industry’s achievement. The clever idea behind green corridors is that other routes will be able to learn from them and copy them to deliver a decarbonised shipping industry.
The main concern would be whether green corridors would evolve into a form of picking winners. Decarbonisation needs to follow the lowest cost, safest, lowest net emissions pathway. This might not be the same for all operators in all ports, or even for all operators involved in a given green corridor. It will be important to monitor whether these matters can be easily resolved. If not, green corridors have the potential to disrupt decarbonisation, rather than aid it. Most importantly, operators across the shipping industry should be able to access decarbonisation technologies as soon as they become commercially available.
Do the new technological developments in shipping pave the way for greater female participation in the industry?
Shipping is known for being a male-dominated industry, with only 29% of the global shipping industry’s overall workforce being women, according to the 2021 IMO/WISTA Women in Maritime Survey Report. Positive strides are being made towards becoming a more diverse industry, with many organisations and initiatives already focused on improving the gender balance by using different tools to attract more women into the industry, and highlighting the significant change it is going through.
Shipping is currently going through a major transition, and that offers attractive careers. It’s extremely rewarding to be a part of the solution to a great challenge. In shipping’s case, all parties will need to work together to develop, source, and embrace solutions for a better, more sustainable future. Highlighting this will make shipping appear as more enticing and realistic career option for women.
It’s worth noting, that a lot of research have established that having greater diversity in the workplace enhances creativity, adaptability and problem solving, which in turns adds more value to business partners. As the maritime industry faces up to the challenge of decarbonisation, this is exactly what the industry needs.
What educational steps should be taken to encourage more women to enter the industry?
There are many ways in which we can attract more talent into the shipping industry. As a starting point, there is a growing need to attract people into the shipping industry, and for shipping to be better represented to those outside the industry looking in. For example, introducing more educational programmes within schools, colleges and universities for children and young adults to learn about the industry and the benefits that come from being part of it. The shipping industry also has a role to play in contributing more to these programmes by attending open days and having conversations with prospective workers.
Embracing digitalisation today and utilising the right channels for communications are also key. By opening up conversations using different sources of information and sharing developments, we can encourage more women to join the industry on its course to a more sustainable, inclusive and gender equal future.
Within the workplace, setting clear expectations and responsibilities for both the company and employees is crucial to achieving a truly inclusive and supportive environment where people thrive and grow.
In general, wellbeing is one of the core deliverables for any company. Ensuring flexible working environments for employees and inspiring innovative thinking is essential to business. We believe our employees should be able to be who they are when they come to work for us. We set out to do just that, as can be seen in our Women in Shipping initiative launched earlier this year, where we strive to make a great future together by encouraging greater diversity and inclusivity within our organisation and beyond.
Creating a community where we inform, inspire and attract more women into careers in the maritime industry, as well as pushing for gender diversity and inclusivity, should be a priority for all businesses. Our people are at the heart of our organisation, we want to hire people who want interesting careers that make a difference in the world. We can then invest in our new hires, as with our all employees, to help them further develop their passion for our industry, embracing our core values of innovation, knowledge and sustainability.
