ESG: SHIPPING’S SUPERHERO?

The shipping industry undoubtedly suffers from an image problem – one that is indirectly putting stakeholders within the sector under immense scrutiny and increased pressures.

Additionally, it threatens the sector’s resilience, making maritime less attractive to the talent required to safeguard its sustainability and develop the solutions needed for a better future.

As ocean-going trade accounts for 90% of all global trade, ensuring the shipping industry’s resilience on all levels is crucial for a sustainable world.

Environmental, social and governance (ESG) – if embraced with the correct intent – has the power to step in like a superhero and shift that dynamic. This is especially true for shipowners that have put in good work for years, which has gone unnoticed.

Shipping is one of the world’s most highly regulated industries and owners have applied good practises all along. Many have consciously taken care of their people, while protecting the oceans and maintaining high operational standards.

Utilising their ESG strategy to put these elements into a structure allows them to remain at the forefront of stakeholders’ increasing demands.

A successful ESG strategy should have three elements: it should help you showcase your impact so far, detect where you have even greater power to influence positive change and outline measurable targets on how to achieve this.

During a time of great uncertainty post pandemic, with the Ukraine-Russian war ongoing, a recession fast approaching and the billion-dollar question of what the “fuel of the future” looks like, planning ahead can seem difficult.

ESG is the only tool shipowners can utilise with certainty to maintain their market position, whether it be meeting charterers’ requirements, reporting standards, remaining attractive to financiers, and so on.

As shipowners implement their individual strategies for meeting the highest environmental, ethical and regulatory standards, adhering to increased governance requirements and being able to create an even safer, a healthier and more diverse industry, they need to have behind them a robust support system.

P&I Clubs have a unique role to play in this journey. They are perfectly placed to proactively provide shipowners with the technical expertise and guidance to overcome challenges.

Furthermore, P&I’s role is to mitigate the risk when something goes wrong. In every transitional period where trial and error are the norm, having an infrastructure that can operationally and financially contain the damage efficiently allows the shipowner to push ahead with confidence and a greater amount of certainty.

This is what P&I Clubs were created to do – and now more than ever we need to support shipowners and the industry.

At West, it is important for us to be the partner our members can rely on, ensuring we are always a step ahead when sharing knowledge or providing them with the technical expertise to navigate the challenges that these new solutions bring.

Furthermore, while ESG practises are not new to the industry, it remains new as a concept.

Therefore, we also place great emphasis on assisting our members to understand how they can utilise ESG in the best way possible, to capitalise on the long-term opportunities and all the benefits of progressing toward a more sustainable maritime industry.

Sean McLaughlin , Strategy Consultant at Houlder, discusses the results of a survey the company recently undertook