- A group of leading banks signed up to environmental commitments known as the “Poseidon Principles”.
- Global shipping accounts for 2.2% of the world’s CO2 emissions and the industry is under pressure to reduce those emissions and other pollution.
- Recent study, at least $1 trillion of investment would be needed to enable the shipping industry to meet the IMO’s 2050 targets.
- The 17 lenders involved represent at least $140 billion of the total global shipping finance portfolio.
More hands join the initiative to link provision of shipping finance to cuts in carbon dioxide emissions, writes Jonathan Saul for an article published in Reuters.
CO2 emissions cut
Credit Suisse (CSGN.S), BNP Paribas (BNPP.PA) and French public investment bank Bpifrance are the latest lenders to join an initiative to link provision of shipping finance to cuts in carbon dioxide emissions.
- Global shipping accounts for 2.2% of the world’s CO2 emissions and the industry is under pressure to reduce those emissions and other pollution.
- About 90% of world trade is transported by sea.
Environmental commitments considered
Last year, a group of leading banks signed up to environmental commitments known as the “Poseidon Principles”.
Under this, financiers will for the first time while providing loans to shipping companies, will take account of their efforts to cut CO2 emissions.
Latest signups
BNP Paribas, Credit Suisse and Bpifrance’s subsidiary Bpifrance Assurance Export, the French export credit agency, announced that they had joined the “Poseidon Principles”.
Gabriel Cumenge, head of the French Export Credit Agency said, they will bring a political impetus, complementary to the financial incentives already promoted by commercial banks.
Gabriel added that the initiative will not achieve sufficient results without being embraced worldwide and are awaiting new members, especially in Asia.
Common baseline for assessment
The principles set a common baseline to assess whether lending portfolios are in line or behind the climate goals set by the U.N. shipping agency, the International Maritime Organization (IMO).
The IMO aims to reduce the industry’s greenhouse gas emissions by 50% from 2008 levels by 2050.
$1 trillion of investment
According to a recent study, at least $1 trillion of investment would be needed to enable the shipping industry to meet the IMO’s 2050 targets.
Credit Suisse’s global head of ship finance Mario Béhé said, “The Poseidon Principles are key to leading industry-wide change.”
The 17 lenders now involved, who also include Norway’s export credit agency, represent at least $140 billion of the total global shipping finance portfolio.
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Source: Reuters
