Our Duty
to Sustain Sustainably

Our Duty to Sustain Sustainably

ESG & Sustainability is not only a moral case, but also a powerful business case. At West we aim to proactively guide Members through the risks and become equipped to efficiently mitigate the damage if something goes wrong.

Environmental Regulatory compliance

The International Maritime Organization (IMO) has adopted a revised strategy during MEPC80 on the reduction of GHG emissions from vessels, with enhanced targets to tackle harmful emissions, with the levels of ambitions for (i) Carbon intensity of the ship to decline through further improvement of the energy efficiency for new ships (ii) Carbon intensity of international shipping to decline, (iii) Uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources and (iv) GHG emissions from international shipping to reach net zero.

The key strategic objectives include (i) the reduction of carbon intensity of international shipping by at least 20%, striving for 30%, by

2030, and (ii) to reduce the total annual GHG emissions from international shipping by at least 70%, striving for 80%, by 2040. From 1 January 2023, all vessels are required to calculate their attained Energy Efficiency Existing Ship (EEXI) to measure their energy efficiency and to initiate the collection of data for the reporting of their carbon intensity indicator (CII) and CII rating.

Furthermore, in accordance with the latest European Union (EU) proposal, the shipping sector will be included in the Emissions Trading Scheme (ETS) by 2024. The measures have an extra-territorial reach and will also affect the movement of cargo outside of the EU’s borders.

Gina Panayiotou,
ESG Manager

Access to financing and investments

Financial institutions and investors are integrating ESG risk factors in their decision-making processes. The Poseidon Principles are only the beginning, setting a global framework for assessing and disclosing the climate alignment of financial institutions’ shipping portfolios. Furthermore, in respect of public listed companies, ESG ratings provide transparency to investors regarding how exposed companies are to specific risks and how well companies are managing them.

Missing out on talent, creativity, innovation
and subsequently profitability

McKinsey & Partners published a business case for diversity in May 2022. With the largest data set gathered so far encompassing 15 countries and more than 1,000 large companies, the case revealed that companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile. In the case of ethnic and cultural diversity, the findings were equally compelling: in 2019, top-quartile companies outperformed those in the fourth one by 36 percent in profitability.[i]

[i] McKinsey & Company, Diversity Wins: How inclusion matters, May, 2020

The increasing number of ESG related regulations and requirements in shipping, are a reflection of the emphasis that clients, investors and other stakeholders are placing on the maritime sustainability agenda.