Marine insurance providers, along with leading banks that finance the shipping industry that have signed on to follow the Poseidon Principles frameworks, have agreed to increase the standards by which they measure climate alignment in the maritime industry.
According to a statement from the Global Maritime Forum, the Poseidon Principles have committed to adopting an emissions reduction trajectory in line with net-zero commitments, as soon as such a trajectory or trajectories become available.
As part of these commitments, which align with ambition of the UN and the latest available climate science, 30 shipping banks and 16 marine insurance providers and brokers participating in the Poseidon Principles will benchmark their portfolios against two trajectories.
The first one will be aligned with the IMO’s 50% reduction by 2050, and one aligned with net-zero by 2050 and a maximum temperature rise of 1.5C above pre-industrial levels by 2100, to meet the temperature goals of the Paris Agreement.
For the second trajectory to be consistent with a 1.5C future, the scope will be expanded to include all greenhouse gas species, and to account for well-to-wake emissions.
According to the statement, the new commitment means that once a new trajectory based on credible and well-recognised sources is established and adopted by the members of the individual initiatives, both benchmarks would be in play.
“The urgency is clear. Because of the role that shipping plays in the global economy, we must accelerate our ambition towards the Paris Agreement’s 1.5C temperature goal. This new ambition will allow the Poseidon Principles to continue playing our role in incentivizing and supporting the decarbonization of shipping,” said Michael Parker, Chairman, Global Shipping, Logistics & Offshore, Citi and Chair of the Poseidon Principles for Financial Institutions.
The Poseidon Principles are already aligned with the International Maritime Organization’s ambition to reduce GHG emissions from international shipping by at least 50% by 2050. The Poseidon Principles for Marine Insurance also benchmark against an emissions reduction trajectory in line with a 100% reduction by 2050.
“Access to real emissions data through the Poseidon Principles creates tangible impact in our business as well as in the real economy. Establishing common global decarbonization trajectories will help us make business decisions that reflect the latest available climate science. This is the right thing for us to do,” said Patrizia Kern-Ferretti, Head Marine, Swiss Re Corporate Solutions and Chair of the Poseidon Principles for Marine Insurance.