Poseidon Principles – aligning with a new trajectories

The new roadmaps, once established, will go well beyond the existing guidance for ship financiers, currently built on the International Maritime Organization (IMO) roadmap of 50% greenhouse gas (GHG) reductions by 2050. Michael Parker, Citi’s leading shipping, offshore and logistics banker, who chairs the Poseidon Principles, detailed how the new trajectories will be set that will set signatories to the Poseidon Principles for ship finance through 2050 on a path in toward net zero.

Intermediate targets for 2030 will guide thinking. Parker pointed to the Net-Zero Banking Alliance (NZBA), an initiative that is part of the broader Glasgow Financial Alliance for Net Zero (GFANZ), which aims to set targets for the end of this decade by the end of 2024. He said banks must “maintain connectivity with the IMO’s evolving ambitions,” pointing to the upcoming MEPC 80, which will take place in the summer of 2023. developed by the IMO in 2018 would be replaced by a “well-to-wake equivalent 1.5C trajectory” ideally consistent with what the IMO decides at the MEPC 80 – a path looking towards 2030 .

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Poseidon Vice-Chairman Paul Taylor, Global Head of Maritime at Société Générale, said: “Each of the signing banks will be incorporating climate alignment into their lending decisions…this is all very new…but it has started and will continue to move into this new trajectory.” “.

Questions arose like “What happens if the IMO does not set a new emission reduction target [beyond the present 50% by 2050] at MEPC 80?” In his responses, Parker referred to the NZBA and said that “2030 is a key date”. In his statement on the likely revision of the IMO’s GHG reduction targets, he said “I’m pretty confident that they will have a target for 2030”, but in the question-and-answer session he stressed that the Poseidon Principles are independent The IMO could develop trajectories of this if it did not revise its goals.

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Insurance topics were also part of the briefing. Patrizia Kern-Feretti, Chair of the Poseidon Principles for marine insurance, which launched in the summer and is now attracting more members, and Head of Marine at Swiss Re Corporate Solutions, said that all shipowners she has been in contact with would have looked at opportunities to reduce emissions. Stressing that the Poseidon Principles insurance arm’s benchmark of 100% reduction in greenhouse gas emissions by 2050, which the financiers will now align with, depends on the accuracy of measuring shipowners’ emissions, saying: “The principles are based on Access to transparent data on real emissions to evaluate our activities.”

In previous comments, Citi’s Parker noted that the signers used IMO’s DCS data “which is publicly available,” and he acknowledged the IMO’s DCS initiative as an integral part of advancing the Poseidon Principles. Rolf Thore Roppestad, Chief Executive Officer, Gard, and Vice Chair of Insurance Efforts, also stressed the usefulness of IMO’s involvement beyond the data aspect, saying: “They may be moving slowly… but we’re talking about a long-term course… It’s very important.” to have them on board. History has shown that IMO is really powerful when they step in there.”

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Citi’s Parker said he hopes to see continued alignment between the marine finance and insurance arms of the Poseidon Principles, but was quick to note that different incentives apply to marine credit (longer term) versus hull insurance (which is renewed annually).

He also gave some hints on future developments that will lead to further collaborations, saying: “You will hear some announcements pretty soon…other industries are following our approach…and will bring their own principles…and their skills are some examples that we can learn from these…which allow us to say as we evolve our methodology that’s actually a pretty good idea.

“We cannot be static – we must keep progressing,” he said.

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