In this article, we examine the concept of ESG, which stands for environmental, social, and governance, and its application to the shipping industry. ESG is a way of measuring how well a company is doing in terms of sustainability and making a net-positive contribution to society. The shipping industry, which is responsible for almost 3% of global greenhouse gas emissions annually, has been significantly affected by the introduction of ESG. The article provides an overview of the environmental, social, and governance aspects of ESG and how they are relevant to the shipping industry. It also explores the significance of regulations, technology, and customer demand on the industry’s ESG performance.


Beyond Profit: The Importance of ESG in the 21st Century maritime Landscape

Environmental, social, and governance (ESG) is a framework for assessing a company’s sustainability and social impact. ESG has gained traction in recent years as a result of its potential to aid companies in performing well while also having a net-positive contribution to society on society. In 2005, the United Nations Global Compact published a report advocating for ESG, stating that it can help companies succeed while also having a positive influence.

ESG has become a global standard, with many organizations pledging their support for ESG by signing the United Nations Principles of Responsible Investment (UNPRI). These organizations represent a whopping $100 trillion in assets, making ESG a significant factor in the financial industry.

ESG is a risk management tool for sustainability and societal impact. This implies that when companies make investments, they can use ESG to assess how sustainable and beneficial their investments are to society. ESG is a comprehensive concept that intersects with other terms such as corporate sustainability and corporate social responsibility (CSR). However, ESG stands out because it provides more specific and standardized metrics for tracking progress.

The spread of ESG in Maritime

It is only natural that ESG would come knocking on the door of the shipping industry, with its global companies and fleets accounting for almost 3% of global greenhouse gas (GHG) emissions annually, and with the International Maritime Organization (IMO) focusing more than ever on environmental topicsESG, as a key factor in the Poseidon Principles and an evolving landscape in greener ship financing, will play a huge role in the day-to-day decision-making of ship owners and executives.

The ‘E’ in ESG

The “environmental” aspect of ESG refers to a company’s effect on our planet, including its use of natural resources, its greenhouse gas emissions, and its overall environmental footprint. It also includes the company’s policies and practices around environmental stewardship and sustainability. It’s especially important for the shipping industry.

Shipping is responsible for about 3% of global greenhouse gas (GHG) emissions, and that number is expected to grow. However, the environmental burden of shipping isn’t just limited to air emissions; noise pollution, vessel discharges, and other factors can also harm our ecosystems. The International Maritime Organization (IMO) has set strategic goals to reduce the carbon intensity of international shipping by 40% by 2030 and 70% by 2050 compared to 2008 levels. They also want to decrease total annual greenhouse gas emissions by 50% by 2050 compared to 2008 levels.

To meet these targets, new regulations have been introduced that require all ships above 400 GT to measure their Energy Efficiency Existing Ship (EEXI). Ships above 5000 gross tonnages must also be ranked based on their carbon intensity (CII). In addition, the European Union has proposed that shipping be included in the Emissions Trading Scheme (ETS) by 2024, which means that shipping companies will have to purchase emission allowances, adding to their compliance costs.

Air pollution with smoke in a port

Using technology to outperform compliance

To keep up with the changing regulatory landscape, marine stakeholders must take environmental performance seriously. Customers are demanding a net-zero supply chain, and investors are evaluating shipping companies based on ESG criteria. The Poseidon Principles, an industry framework for assessing and disclosing the climate alignment of ship finance portfolios, is just the beginning of this new era. Recent advances in artificial intelligence, along with a thriving ecosystem of maritime-focused technology companies and substantial investments in alternative fuels and infrastructure, should provide the tools necessary to help the shipping industry move towards a more sustainable future.

The ‘S’ in ESG

The social pillar of ESG refers to a company’s effect on society, including its employees, customers, suppliers, and the communities in which it operates. The qualitative nature of social impact makes it difficult to measure and analyze. Furthermore, social issues are estimated differently in different countries, which often leads to the social pillar being overshadowed by the pressing matter of climate change. However, a worldwide event like the pandemic changed that, highlighting the importance of this metric. Issues such as health and safety, human rights, labor standards, diversity, inclusion, and data privacy became more noticeable, pushing companies to examine how they treat their most important asset: their people.

In the shipping industry, social issues are prevalent, especially concerning the welfare of seafarers. Seafarers are often subjected to long working hours, poor living conditions, and inadequate wages. To address these issues, the International Labour Organization (ILO) has developed the Maritime Labour Convention, which sets out minimum standards for seafarers’ working and living conditions. Additionally, IMO’s International Safety Management (ISM) Code plays a pivotal role in providing an international standard for the safe management and operation of ships. Shipping companies are expected to comply with these standards to ensure the welfare of their employees.

Mental health and diversity at the forefront

There has been a particular focus on the mental health aspect of life onboard, with multiple studies in progress. Finally, efforts have been made to increase diversity in the maritime industry, especially with the attraction of more women in all job descriptions. Associations like the Women’s International Shipping & Trading Association (WISTA) and Celebrity Cruises which have increased the number of women working across the fleet from 3% to 32% are leading the way.

The ‘G’ in ESG

The governance aspect of ESG refers to the systems and processes used by a company to manage and oversee its operations, as well as the relationships between a company’s management, board of directors, shareholders, and other partners. Governance is an important aspect of ESG because it provides a framework for ensuring that a company operates transparently and responsibly. This includes establishing clear policies and procedures for decision-making, risk management, and financial reporting, as well as ensuring that the company’s leadership is accountable to shareholders and partners. In recent years, there has been a growing focus on the governance aspect of ESG, with many investors and stakeholders seeking greater transparency and accountability from companies. This has led to the development of a range of standards and guidelines, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), which provide a framework for measuring and reporting on a company’s governance practices as part of its overall ESG performance.

Anti-Corruption and Sanctions as the center of proper governance

The shipping industry is heavily regulated as a result all parties involved do have to abide by very strict rules about governance. Due to the global nature of the industry and the changing geopolitical landscape important challenges are being imposed which maritime stakeholders should navigate with caution, the work of the Office of Foreign Assets Control (OFAC) imposing sanctions together with laws such as the UK Bribery Act and the Foreign Corrupt Practices Act (FCPA) and many other examples highlight the importance of proper due diligence. Finally, the work of the Maritime Anti-Corruption Network (MACN) is an important step to fight corruption in continents that are more prominent.

ESG will become a competitive advantage for true believers

ESG in a digitalized world

In conclusion, the ESG framework has become a significant factor in the shipping industry, with its focus on environmental sustainability, social responsibility, and good governance. To succeed in this changing landscape, all parties involved need to adopt ESG practices and technologies and prioritize sustainability in all aspects of their operations.



Sustainability in Shipping Industry, ESG Performance Reporting

Sustainability in Shipping Industry ESG Performance Reporting

Shipping industry is required to comply with new regulatory requirements, standards and market trends around Sustainabilityincluding the protection of the Environment and the mitigation of climate change effects. These apply to the entire value chain, from the construction of a new building at the shipyard, to the recycling of the ship at the end of its useful life. As a result, shipping companies are called to respond to the new monitoring and reporting requirements related to Environmental, Social and Governance (ESG) factors, measuring the impact of their activities and adapt the way they operate to meet industry’s goals and targets.

ESG is rising in prominence due to changes in public sentiment, values and behavior, impacts on financial value, climate change risks and increasing of opportunities in sustainable investing. To meet the expectations of various stakeholders, shipping companies should go beyond compliance and become more transparent to their stakeholders by disclosing their ESG performance and commitments.

By issuing an ESG report, shipping companies have the opportunity to demonstrate to the public their commitment to protect the environment and marine biodiversityto highlight the high health and safety standards for crew and office employees welfare and to promote ethical principles and corporate governance best practices. Moreover, by demonstrating high ESG performance, shipping companies can attract investors, customers and have access to shipping finance.

ESG report disclose information related to the Environmental, the Social and the Governance factors, which is integrated in the decisions, actions and policies of shipping companies.

The initial IMO GHG strategy demands from shipping industry to reduce CO2 emissions at least 40% by 2030 and total annual GHG emissions at least 50% by 2050 compared to the previous years. For this purpose, IMO adopted a Data Collection System (DCS) requiring from ships over 5,000 gross tonnage to submit their annual administration reports on fuel oil consumption. In order to comply with those shipping companies shall monitor report and verify maritime vessels’ CO2 emissions annually and can share their performance with stakeholders through ESG report.

In a fast changing world, shipping sector will strive to improve and promote gender diversity and equal opportunity, targeting in a gender-balanced environment with loyalty, creativity, innovation and ultimately performance from crew and office employees. On top of that, health, social and security systems are steadily implemented in shipping sector the last two decades. Through ESG report, shipping sector by promoting its Social factor has the opportunity to share these initiatives to the rest of the world and increase the awareness of the public.

Moreover, a modern corporate governance structure is considered necessary to be adapted from the modern shipping companies increasing transparency and reduce business exposure by focusing into their business strategy, ethics and policies for the day-to-day operation.

Aegean Shipping Management issued its first Annual Environmental, Social and Governance Report (ESG), for the year 2019, which is publicly available over the Company’s web- site. The ESG report describes our Company’s ESG strategy and approach with actual performance compared to previous years, industry benchmarks and future targets which include plan to increase our disclosures and to take over additional targets on these below three issues regarding our continuous improvement and future sustainability performance.

In our Environmental protection approach, we put great value to the protection of the environment with energy and environmental policy, to environmental regulations compliance (IMO DCS Database), to energy efficiency, to GHG emissions and take measures to minimize our environ mental footprint with ship recycling, Ballast Water Management, Waste Management and use of eco-friendly chemicals  and lubricants. Based on MRV Shipping Regulation (EU 2015/757), we monitor, report and verify (MRV) carbon emissions for all ships on voyages to, from and between EU ports. In addition, we participate in voluntary environmental activities such as the Global Voluntary Coastal Cleanup movement, in order to contribute in keeping healthy our ecosystem.

In our Social protection approach, we have established high health and safety standards that are applying with our Health and Safety Management System, concentrated in development and welfare for our on-board personnel and on-shore employees. We place a great value on maintaining sustainable and responsible long-lasting relationships with reliable and qualified suppliers and we implied in a wide range of community investment initiatives such as scholarships and donations.

In our corporate Governance approach, we have established an Executive Committee, which is responsible for the day-to-day management of the company and performance of activities related to the delivery of our services. Furthermore, we are dedicated to encourage an honest and trustworthy working environment both in our on-board personnel and in on-shore employees with strong ethical values, Whistleblowing Policy and Harassment and Bullying Prevention Policy.





The constant trend towards the expansion, rationalization and standardization of the “ESG principles” is emerging in the business world and the adoption of ESG criteria has and will continue to have a significant role in the evaluation of shipping companies.

In this report we analyse:

  • The lessons learned from the shipping ESG sustainability reports
  • The importance of ESG criteria in Shipping finance nowadays
  • How the ESG performance relates to ROI in shipping stocks
  • How the ESG map has been shaped around shipping
  • The ESG strategic issues that concern shipping companies worldwide.

ESG is about addressing transformation, by understanding and controlling risks and opportunities, and how it affects your maritime business.(MARITIEM ESG)

The shipping industry is experiencing an increased attention towards ESG and decarbonisation from multiple stakeholders like regulators, financiers and cargo owners. There is a demand for a fact-based scientific disclosure of your sustainability story. Business as usual is not an option anymore.

DNV supports customers with a broad range of services related to Environmental, Social and Governance (ESG). These include ESG due diligence, ESG framework development, the establishment of relevant ESG KPIs and ESG strategies, as well as roadmaps for ways to improve ESG performance and ESG rating and reporting.

What is ESG reporting in the shipping industry?

In the maritime world, similar to other industries, ESG reporting covers topics such as recycling, greenhouse gas emissions, other pollutants to air, ecological impacts, business ethics, employee health and safety, as well as accident and safety management.

ESG reports and sustainability reports aim to disclose performance on parameters within all three areas that are important for the company’s operation. The reporting serves to satisfy stakeholders’ demands for transparency on corporate responsibility issues. It also conveys that the company has policies, initiatives and strategies in place to manage the ESG risks and opportunities.




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