RightShip and Thetius’s report, “From Pledges to Practice: Anchoring Safety, Sustainability and Crew Welfare in Vessel Selection,” reveals a persistent disconnect between the shipping industry’s stated ESG (Environmental, Social, Governance) pledges and the day-to-day vessel selection decisions made by charterers.
The ESG Gap: Intent vs. Incentive
The core finding is that shipowners are investing in higher ESG standards, but charterers are not consistently rewarding these efforts, leading to a breakdown of incentives.
- Owners’ Investment: A majority of shipowners report exceeding baseline compliance in key areas: 73% in safety, 60% in sustainability, and 67% in crew welfare.
- Charterers’ Reward: Conversely, only 27% of charterers report offering better terms or financial incentives to owners who exceed these baselines.
- Operational Pressure: This gap is driven by tight profit margins, short deadlines, and urgent delivery demands, which force charterers to prioritize speed and cost over higher ESG standards during vessel selection.
- Commercial Impact: The cost of neglecting safety and welfare is tangible. For instance, a small safety lapse, such as a mooring line failure (costing only $4,000), can lead to several hours of lost loading time, equating to millions of dollars in lost cargo value.
Four Key Recommendations to Close the Gap
RightShip’s report outlines four steps necessary to embed ESG principles into commercial decision-making, turning responsible performance into a competitive advantage.
- Reward ESG Leadership
The industry must move from supporting the idea of incentives (backed by 93% of owners and 60% of charterers) to implementing them.
- Mechanism Examples: Implement sustainability-linked charter contracts, offer long-term Contracts of Affreightment (CoAs), and utilize ESG-indexed loan facilities.
- Goal: Directly link commercial advantage (profit) to responsible performance, accelerating investment in safer and cleaner fleets.
- Define and Standardize Expectations
A lack of a clear, shared definition of “good” ESG performance is hindering progress, with 96% of maritime professionals agreeing on this lack of clarity.
- Action: Charterers, owners, and terminals must align through frameworks to establish common, measurable benchmarks for safety, sustainability, and crew welfare across all vessel types.
- Goal: Ensure ESG leadership is measurable, comparable, and credible throughout the global fleet.
- Embed Trusted, Decision-Grade Data
Owners report that 87% of charterers lack effective mechanisms to assess crew welfare, safety, and sustainability.
- Action: Integrate verifiable and accessible data (from inspection records and emissions data) directly into existing risk management and chartering workflows. AI can transform static data into continuous intelligence.
- Goal: Enable earlier risk identification and ensure ESG becomes a fundamental part of everyday decision-making at the fixture desk.
- Elevate Recognition
ESG performance currently lacks sufficient visibility, leaving leading owners unrewarded.
- Action: Introduce annual league tables comparing the ESG performance of owners and charterers. Expand transparency initiatives like the Sea Cargo Charter to include social and safety metrics.
- Goal: Transform ESG excellence from an internal ambition into a publicly recognized mark of industry leadership, putting pressure on laggards to improve.
The CEO of RightShip emphasized that closing the gap requires collaboration across the value chain, ensuring that safety, sustainability, and crew welfare are linked not only to ethics but also to a commercial advantage.
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Source: Safety4sea
