Sustainability concerns have rocketed up the shipping agenda over the past decade, with environmental, social and corporate governance (ESG) issues already influencing financing decisions, fleet renewal and regulatory change across the industry.
Decarbonisation of shipping is by far the most complex and pressing area. Most of the focus to date has been on the ‘E’ in ESG, but the ‘S’ (Social) and ‘G’ (Governance) elements also present growing challenges to the industry in areas such as transparency, diversity and crew welfare.
Some of these problems are down to simple organisational choices, but the environmental challenge – principally the reduction of CO2 emissions – is too large for any one company, even any one set of stakeholders, to address.
There are significant technological, financial and regulatory hurdles to clear before shipping has a viable path towards the International Maritime Organisation’s goal of 50% lower greenhouse gas emissions by 2050, including the recurring question of who shoulders the risk and cost of developing new technologies.
In addition, shipping faces structural upheaval. Longstanding pressures on smaller shipowners to consolidate may become difficult to ignore in the pursuit of a sustainable industry, while the privacy traditionally embraced by sections of the industry may come under pressure from demands for greater transparency from investors, lenders, regulators and customers.