ESG Watch: Expert thinking on ESG in the maritime industry

Iris Baguilat, President, Döhle Seafront Crewing (Manila), Inc., Chairperson, ALMA Maritime Group

As the chairman of a manning group responsible for deploying more than 175,000 Filipino seafarers, we echo the International Transport Workers’ Federation (ITF)’s call to “overhaul the Philippines’ broken system of seafarer workplace compensation” – a malpractice that has “overtime seen the rise of widespread predation of the crew by so-called ‘ambulance chasing’ lawyers.” These unscrupulous lawyers and firms do not seek the seafarer’s best interest – creating malicious or exaggerated medical claims and giving their victims “ethically questionable loans at predatory interest rates” that eats away their payout once received. The greater victims are the innocent seafarers who have been losing jobs as this led many shipowners and ship managers from avoiding hiring Filipino workers. As of writing, our untiring lobbying and work with key government agencies have made big waves in our country’s legislative body to enact a law that would hinder the proliferation of this malicious act and cripple the source of income of its perpetrators.

David Hammond, CEO, Human Rights At Sea (HRAS)

Complete public transparency of all Social activities, including self-certification initiatives centred around ESG frameworks and reporting. No transparency means no independent accountability, leading in turn to reduced consumer confidence, brand damage and persistent civil society scrutiny.

Sanjam Gupta, Founder, Maritime SheEO

One change that could have an immediate impact on the gender-related aspects of ESG performance in the maritime industry is the promotion of gender diversity and equality in the workforce. Despite progress in recent years, the maritime industry remains a male-dominated sector, with women accounting for only a small percentage of the workforce. This underrepresentation of women can lead to gender-based discrimination, harassment, and other issues that negatively impact the social and governance aspects of ESG performance. To address this issue, companies and organizations in the maritime industry can take several steps, including promoting gender diversity and equality in recruitment and hiring practices, providing equal opportunities for career development and advancement, and implementing policies to prevent and address gender-based discrimination and harassment.

Additionally, companies can provide training and support for women in the industry, including mentoring programs and access to networks and resources that can help them succeed and advance in their careers. By promoting gender diversity and equality in the workforce, the maritime industry can create a more inclusive and welcoming workplace environment, improve its social and governance performance, and attract and retain talented individuals, regardless of gender. Apart from gender, One thing that could have an immediate or profound impact on ESG (Environmental, Social, and Governance) performance in the maritime industry would be the widespread adoption of sustainable fuels, such as biofuels or green hydrogen, to power ships. Maritime transportation is responsible for a significant amount of greenhouse gas emissions, and these emissions are expected to increase in the coming years. The use of sustainable fuels would significantly reduce the industry’s carbon footprint and help meet global emissions reduction targets. Additionally, it would help reduce other forms of pollution, such as air and water pollution, associated with traditional fuels.

However, the adoption of sustainable fuels requires significant investment in infrastructure and technology, as well as the development of appropriate regulatory frameworks. Governments, industry leaders, and other stakeholders need to work together to create the necessary conditions for the widespread adoption of sustainable fuels in the maritime industry. Overall, the adoption of sustainable fuels would have a significant and positive impact on the ESG performance of the maritime industry, leading to a more sustainable and environmentally responsible sector.

Capt. Akshat Arora, Senior Surveyor, Loss Prevention

When it comes to ESG in shipping, generally environmental considerations tend to take precedence – for ‘E’, stricter regulations and enforcement mechanisms against maritime pollution have been deliberated and implemented. I feel that the social and governance aspects are equally important and necessitate a similar level of attention. As such, if I could change one thing that would have an immediate or profound impact on maritime ESG performance, it would be to promote ‘S’ and ‘G’ on equal terms as ‘E.’ I believe that this can be accomplished through a multifaceted approach that prioritizes seafarers’ safety and well-being, enhances collaboration amongst industry stakeholders, encourages transparency and accountability, and promotes public awareness.

Alvin Forster, Loss Prevention Executive, NorthStandard

The concept of ESG for companies in the shipping industry is sound – no arguments from me. But I believe its success relies on it being implemented thoughtfully and holistically. Fundamental to this is the common mindset of “you can’t manage what you don’t measure”. So, when a company decides on its vision for ESG, it will invariably set goals on what they want to achieve. This in turn will lead to the creation of KPIs to allow ‘performance’ to be measured. This all sounds reasonable, but this is where we can fall into the trap of unintended consequences. When people are given poorly thought out KPIs, the meeting of which impacts their career progression and financial bonuses, those initial good intentions can end up being counterproductive. We have seen similar with regard to safety targets and safety reporting. Ill-considered KPIs on safety metrics, such as LTIs, can foster a culture of fear of reporting incidents. On the other end of the scale, incentivising reporting or setting targets on the minimum number of near-miss reports can result in high numbers of pointless suggestions or fabricated scenarios which are not taken seriously by the crew or shore management. Neither help provide an accurate picture of what ‘safety’ is really like on board and it can be detrimental to organisational culture. So, with these lessons in mind, I would urge companies when they are setting targets and allocating KPIs on ESG related matters, to think about whether what you are measuring is actually useful and reflects the reality, and more importantly consider the unintended consequences it could have on other operations and safety as a whole.

Kostas Papoutsis, Sustainability Manager, EURONAV

While shipowners and operators are considering zero-emission fuels later this decade, these technologies are not commercially available at scale today and their adoption will be long and costly.  However, we can reduce fuel cost and emissions now by maximising operational efficiencies. A potential measure to improve energy efficiency immediately is speed optimisation via improved communication with charterers and ports to tackle Steam-Fast-Then-Wait practices. ‘Just in time’ operations when there are noticeable delays at port, are an effective way to attain this. It has been clearly demonstrated that optimising operational efficiency has the potential to reduce emissions by 200m tonnes of CO2 and fuel costs by $50 billion annually at today’s prices. Achieving operational efficiency is not simple, but it is possible.

Capt Yves Vandenborn, FNI, Director of Loss Prevention, NorthStandard

Seafarer wellbeing has always been a focal point of NorthStandard. Seafarers are at the heart of the maritime industry; without them, world trade comes to a halt. Yet seafarers remain unrecognised as key workers in some countries and their rights fail to be protected by law internationally. The club has signed the Neptune Declaration on Seafarer Wellbeing as well as published several posters and guidance on seafarer wellbeing. It is our firm belief that seafarers are the future of the industry. Only by treating them with respect can we forge an environment that is conducive to work in and shape seafaring as an attractive career option for generations to come.

Luisa Puccio, Director – Shipping & Trade Policy, ECSA

Accelerating the adoption of low- and zero carbon fuels would have a profound impact on the ESG performance of shipping. As a contributor to global emissions, reducing the industry’s carbon footprint is crucial in mitigating climate change. Accessible and reasonably priced fuels, as well as supportive infrastructure, are vital in making this transition a success. Not only would it benefit the environment, it would also create new business opportunities and promote innovation in the industry. Importantly, the energy transition and the demand for green skills have great potential to promote diversity in the sector, and enhance women’s participation. It is essential that we work together to accelerate this transition in order to secure a more sustainable future for our industry and the planet. Addressing this issue globally and in Europe is a top priority of ECSA.

Jenny Braat, CEO, Danish Maritime

Knowing it is controversial I believe that going from consensus to majority decisions would make a huge difference in IMO regarding our common level of ambitions. Of course, it is of great importance to make sure that all countries can see themselves in the work done in IMO, but it is also of great importance to move forward and raise the bar quicker than what is happening today. ESG performance is also about matching global demands and to make sure that an effective global enforcement is carried out. Looking at the environmental impact of the shipping industry our responsibility is obvious, but there is a gap between political decision making and the speed in which we develop new and better technologies. We could easily move faster, and I think we owe it to the next generations to do so

Christen Guddal, Chief Claims Officer, Gard P&I Club

I would focus on the health, welfare and working conditions of seafarers. They are the frontline workers who enable world trade and sustain the global economy. Seafarers who enjoy safe, healthy and positive working conditions mean less risk of maritime accidents. Why? Because the many important decisions taken by officers and crew on board are impacted by their physical and mental health, sense of psychological safety, alertness and confidence to act. Hence, it should be in everyone’s best interest to ensure that the human and labor rights of seafarers are upheld and improved. Taking good care of seafarers is – fundamentally – both the right and the wise thing to do.

Hendrik Stellamanns, Group Director Sustainability, CSM Germany

Establish equal opportunities.  Young talent is hard to find nowadays. Education levels and education opportunities vary vastly which is a general concern; but looking at the issue through the glasses of the shipping industry it becomes even more apparent that we need equal opportunities driven by equal and up to date education.  New technologies, regulations and practices are surfacing continuously and are increasing the requirements and expectations from the industry. As a result of the digital transformation but also that of climate change, both at sea and ashore all talent is required to make profound changes in order to help accomplish the technological advancements that are central to achieving the goals that have been set.

Paul Hexter, President, Waterfront Shipping

Since the IMO set a goal to reduce carbon intensity by 40 per cent, the shipping industry has taken significant steps to reduce its environmental impact. From a methanol industry perspective, as many new methanol dual-fuel vessels will start to come online over the next couple of years, regulation and compliance will be key drivers for shipowners to switch to cleaner fuels. We also need to ensure bunkering infrastructure is in place in ports around the globe to support methanol bunkering. With regard to the social in ESG, there is still work to be done to improve the mental well-being of seafarers. More training and mental health awareness are needed to prepare for and support seafarers with the challenges of being at sea. At Waterfront Shipping, we are working with our vessel owners to ensure the onboard environment is conducive to good mental health and have made this part of our annual safety visits protocol.

Natalie Shaw, MBE Director Employment Affairs, International Chamber of Shipping (ICS)

People are fundamental for any business to succeed, and creating an environment where everyone feels welcomed and comfortable to meaningfully contribute without fear, is important for our sector to thrive. At ICS we see focus on ESG as essential and desire more Diversity, Inclusion and Equity in the Maritime industry. Promoting diversity will widen access to the best talent pool, while inclusion allows effective engagement with them and equity helps us to deliver fair outcomes. Another aspect is to work to ensure a just transition in the years ahead. These initiatives will lead to enhanced creativity, progressive innovation, more productivity, better reputation and increased engagement which will have a profound impact on ESG performance.

Capt. Kuba Szymanski, Secretary General, InterManager

I would make company CEOs and Presidents fully responsible for their words. Words come far too easy in today’s very vertical, corporation types of shipping organisations. I believe they need to be backed up by actions. It is so much easier to work with someone who fully understands the needs of the ‘shopping floor’, someone who is not afraid to listen to their team and to empower them. Someone who can ‘walk the talk’.

Daniel Gent, Energy & Sustainability Manager, UECC

One key change that could have an immediate and profound impact on ESG performance in the maritime industry is the implementation of a global carbon pricing mechanism or emissions trading system. While the European Union is set to include shipping in its Emissions Trading System (ETS) in 2024, a global system would provide a level playing field for competition and incentivize companies to reduce their carbon emissions by internalizing the cost of carbon. By incorporating the true cost of emissions into their decision-making processes, companies would be motivated to adopt more sustainable practices and invest in cleaner technologies. Such a mechanism would not only benefit the environment but also improve the industry’s social and governance performance by increasing transparency and accountability. Ultimately, a global carbon pricing mechanism would help to align the interests of the industry with those of society and the planet, paving the way for a more sustainable future.

Mark Cameron, COO, Ardmore Shipping

Of all the pressing conditions that businesses are faced with, the most immediate relates to the ‘E’ of ESG reflecting environmental concerns, specifically emissions.  Of course, this does not diminish the relative importance of social and governance considerations, however emissions is effectively a ticking clock with a finite timeline to study, plan and effect a momentous change. The overall concept of ESG is effectively to encourage or promote positive change using the broad reach of influence – mostly coming from the investor community.  However, its outreach is being felt across the globe with different degrees of attention, nevertheless, there is no doubt it is already a significant change agent, and likely something that is here to stay for the foreseeable future.

Chara Georgopoulou, Senior research engineer II, Head of R&D and Advisory Unit, DNV

If we’re looking to make an immediate or profound impact on ESG performance, there’s one key area that could make all the difference: digitalization. By integrating digital solutions for decarbonization and ESG reporting, we can unlock a range of benefits that can help elevate sustainability performance to new heights. Digital transformation can help us better monitor and analyze our impact on environmental sustainability and human well-being. By generating integrated solutions that allow us to optimize the value chain, daily operations, and business decisions, we can achieve a more comprehensive understanding of our ESG performance. Digital management systems can play a pivotal role in this regard, helping us streamline our operations and better use data to drive our sustainability efforts forward. By promoting the integration of digital solutions into our ESG strategies, we can create a more sustainable and resilient future for ourselves, our business and the planet as a whole.

Capt. Vijay Cherukuri, General Manager, HSEQA, Executive Ship Management (ESM)

The maritime industry urgently requires a shift in its focus to expand its investment in diversifying the talent pool of the seafarer before the scarcity of qualified seafarers worldwide reach a catastrophic proportion and throttles the future growth of the industry. For over two decades, ESM targeted its investment towards this end – not only training the future generation of seafarers but also ensuring their holistic growth and well-being. The result is phenomenal as each of our vessels run by these qualified, capable, and resilient sailors sail across the globe with great efficiency and finesse.  We urge all stakeholders to contribute towards developing a larger pool of seafarers instead of competing from a small pool of labor resources.

Bjørn K. Haugland, CEO, Skift – Business Climate Leaders

If I could change one thing that would have an immediate or profound impact on ESG performance in the maritime industry, it would be to enforce stricter regulations and penalties for non-compliance. While there are already regulations in place to promote ESG practices, they are often not enforced rigorously enough, which allows companies to prioritize profits over environmental and social responsibility. By imposing more severe penalties, such as fines, companies would have a greater incentive to comply with ESG standards, ultimately leading to a more sustainable and ethical maritime industry. Additionally, promoting greater transparency and accountability would also encourage companies to prioritize ESG considerations, as stakeholders would be able to hold them accountable for their actions. Implementing stricter regulations would be a crucial step in achieving a more sustainable and responsible maritime industry.

Alison Cusack, Principal Lawyer, Cusack & Co Pty Ltd

50%/50% gender participation at every level of the shipping industry. Boardrooms to below deck on vessels; if the industry had true gender parity (including pay) we would see a dramatic shift away from pure capitalist mentality and more holistic values driven economies. Seafarers were (and largely still are) a mere after thought during the pandemic. The participation rate of women seafarers has decreased from 1.9% to 1.2%. The patriarchy tells men to be strong and suffer in silence. Women seek to break the toxicity of the patriarchy for all its victims, men included. Cleaner seas, safer fuels, better working conditions. These all come about when people feel safe to speak up. Gender equity equals psychological safety. For all.

Jan Hoffmann, Head, Trade Logistics Branch, Division on Technology and Logistics, UNCTAD

We need to measure the external costs of shipping, and then charge a price equivalent to those costs. This will ensure that whoever pollutes, hurts or corrupts, will either reduce activities that incur negative externalities, or pay a price equivalent to their costs. Take climate change: Today, others are paying the price of increasing GHG levels in the atmosphere, while those who emit do not. A levy on GHG emissions from shipping would a) be an incentive to use alternative fuels (the external costs are avoided), or b) the funds generated can be used to help those affected by climate change to adapt or be compensated.

Darryl Anderson, MBA, Executive Director, Mercy Ships Canada

The rising tide of actions decarbonizing shipping is no doubt essential. Yet, if I could change one thing that would profoundly impact ESG performance, it would be for a heightened commitment from beneficial cargo owners to address seafarers’ rights and welfare, not only charterers and shipowners. Aside from the moral imperative, actively embracing the implications of environmental, social and governance perspectives will address changing consumer, investor and business demands, the work of NGOs and academics which influence and shape shipping regulations. The seafarer’s rights and welfare Code of Conduct for shipowners, operators, charters, and cargo owners developed by the Sustainable Shipping Initiative is an encouraging step.

Aleksander Askeland, Chief Sales Officer, Yara Marine Technologies

The availability of resilient port infrastructure to support shore power will have a profound and immediate impact on all aspects of ESG performance. Shore power minimizes the need for vessels to consume fuel while in port, providing tangible benefits for ship operators and charterers. It offers immediate social benefits to crew and coastal communities by minimizing emissions and noise while in port. And, if supported by data-gathering frameworks, can demonstrate compliance with increasingly strict emission regulations.

Namrata Nadkarni, Founder & CEO, Intent Communications

I think the most important aspect to boost ESG performance for the maritime sector would be to get the industry to accept a set of metrics and definitions. Not only would this mean that we can compare the efforts of individual organisations on an apples to apples basis, but it would be obvious where the gaps are so that more resources can be diverted towards those individual organisations or areas. In shipping, ESG discussions are still nascent and often limited to a single aspect of the topic (eg: for the environment, we focus on decarbonisation rather than a wider approach). It would be good to collaborate and learn from and support each other.

Capt. VS Parani, Vice President- Marine, Tufton Asset Management Ltd

On the Social aspect of ESG – improve crew accommodation spaces. If we want our seafarers to remain efficient and in optimum mental health over the several months that they spend onboard, spacious and comfortable accommodation helps. At the design stage, a human-centric focus can help bring pleasantness to crew living quarters. Focus on quality can ensure plumbing does not get corroded and that the temperature in all cabins is comfortable. Allow for time and resources for the upkeep of accommodation spaces. A happy crew is the first step towards a safe and efficient ship.

Dr Sian Prior, Lead Advisor, Clean Arctic Alliance

In the face of the Arctic climate crisis, the global biodiversity emergency, and expectation that Arctic tipping points are likely to be exceeded in the short term, the Clean Arctic Alliance is calling for the adoption of a precautionary approach in the choice of fuels by the shipping sector, and the voluntary use of distillate or other cleaner non-fossil fuels or methods of propulsion that could contribute to the reduction of black carbon emissions from ships when operating in or near the Arctic. Avoiding the use of exhaust gas cleaning systems (scrubbers) would eliminate the need to discharge toxic effluent into the Arctic Ocean, while lowering speeds would lessen the likelihood of ship strikes with marine mammals, reduce underwater noise, and decrease GHG emissions.

George Paleokrassas, Senior Partner, Watson Farley & Williams LLP

Global alignment on an emissions’ trading scheme (or other levy) – be it the EU ETS or another model – coupled with a meaningful portion of the revenues being set aside for investment in sustainability for shipping. Our new survey The Sustainability Imperative – Part 2 showed that 50% of respondents thought net zero would be impossible without such a scheme and that 69% supported the Ocean Fund (or equivalent).  While there is still a desire in the industry towards legislation and regulation needing to drive change rather than industry initiatives there is concern regarding the ability of the IMO to implement workable regulatory change on a timely basis as well as problems with enforcement.  A global ETS, however would build on existing momentum and, by effectively creating a carbon/emissions market, would become self-sustaining while also raising revenue to pay for the transition.

Georgia Allen, Projects and Relationships Manager, International Seafarers’ Welfare & Assistance Network (ISWAN)  I would make interactive, preventative education about equality, diversity, and inclusion mandatory for all. It is no use championing the importance of diversity of recruitment for the future of maritime if the environment is not in reality safe for a diverse workforce. It’s not enough for companies to be speaking proudly about employing 1% women seafarers, if that 1% lives in constant fear of sexual harassment or assault as part and parcel of their job. Women and all other minority groups including LGBT+ seafarers and ethnic minorities, must be treated as a priority and never an inconvenience. I believe the most effective, long-term route to this is preventative education, whereby all seafarers are not only educated on unacceptable behaviours but supported to change these through e.g. coaching and therapeutic exploration.

Antonis Trakakis, Technical Director, Marine, RINA

The ESG reporting serves to satisfy stakeholders’ demands for transparency on corporate responsibility issues and also conveys that the company has policies, initiatives and strategies in place to manage the ESG risks and opportunities. What I would seek to change is the reward that stakeholders, especially financing institutions will offer to companies that issue meticulous ESG reports. This because the commitment with which the financial services industry currently prioritize greener shipping companies is not confirmed, and financial benefits that greener companies may have over the competition is far from being guaranteed.

Capt. Rahul Khanna, Global Head of Marine Risk Consulting for Allianz Global Corporate & Specialty (AGCS)

There are several factors that could provide strong impetus to shipping decarbonization and ESG such as adopting more ambitious emissions targets, additional capital availability as well as enhanced investor and public awareness. However, if I have to choose one, I would say the most significant impact is likely to be through development and adoption of new technologies for zero-emission vessels. New technologies such as Hydrogen fuel cells, alternatives fuels, including methanol, ammonia, synthetic LNG amongst others, battery powered propulsion vessels and wind assisted propulsion are showing promise and a few such vessels have already been successfully delivered. The challenge is to scale these and make them commercially viable in all market conditions.

Georgia Spencer-Rowland, Senior Adviser (Shipping Policy), International Chamber of Shipping (ICS)

For the shipping industry, clarity is key. If we are truly to think about ESG systemically, we have to recognise that the current frameworks are sometimes at odds with one another. Performing well above baseline standards under one ESG framework may not necessarily translate to acceptable performance in another. While admittedly a tough ask, the one thing which would have a profound impact on ESG performance would be a move towards global harmonisation of reporting standards so that reporting for one framework does not undermine efficiency in the other. Ultimately a holistic approach will lead to greater overall sustainability practice. To achieve shipping’s ambitious environmental goals, we need to de-risk investment opportunities to bring about new technologies and operational practices. This requires huge capital investment, the attraction and retention of talent and an open, transparent transition to greener shipping, all vital tenets of an ESG strategy. Investors, customers, and stakeholders increasingly look to a company’s ESG factors to influence their investment decisions. For shipowners and operators, that means access to products from green finance to marine insurance is increasingly predicated on reporting on ESG criteria.

James Frew, Business Consultancy Director, Lloyd’s Register

The acceptance and internalisation by stakeholders is that there is no silver bullet to the energy transition, and therefore it is going to be messy. Any transition – including business as usual-  is going to involve putting capex at risk, and in fact business as usual is definitely not a low risk strategy. A similar acknowledgement is that any transitional fuel is going to be more expensive and require more storage capacity than VLSFO, so if charterers want to encourage adoption they have to start saving energy elsewhere today to allow methanol or ammonia vessels tomorrow.

Fabiana Martins, Manager Partner, SMA (Brazil)

If I could change one thing in the industry with regard ESG I would push forward the issue of under-representation of women in management positions in shipping. The shipping industry is still very male dominated and the participation of the female talents – as more than half of the world population – is imperative to take the industry to a new level of innovation, diversity and sustainabiity, facilitating the communication and achieviment of global logistic goals among Nations. The social aspect of ESG in my view shall reflect all the society, being more visible and accessible to all.

Peregrine Storrs-Fox, Risk Management Director, TT Club

Undoubtedly more efficient data collection and analysis.  Organisations must take advantage of the current advances in digitalization and the technology surrounding data retrieval in order to better design and implement their ESG strategies.  Questions remain as to which data should be garnered as a priority, such tools will result in improvements in problem solving and operational efficiency. Examples of emissions reduction through more accurate measurement of vehicle performance on terminals and less environmental damage from toxic fires via better identification of hazardous materials in transit are becoming more common. Workforce safety and well-being, both ashore and at sea can be enhanced by advanced monitoring of work practices and potentially dangerous or ill-maintained machinery of vessels.  All made more efficient by the use of careful data collection and analysis. More accurate communication of information and financial transactions become possible through greater data transfer capacity and error identification. The collection of granular near-miss data would afford opportunities to develop a deeper understanding of the risk landscape and manage associated hazards.  Among other advantages in a world of increased governance cyber security is strengthened, fraudulent activity easier to locate and record keeping more precise via advanced data interrogation.

Sinikka Hartonen, Secretary General, One Sea Association

To see automation and advances in autonomous technologies viewed in a more positive light. Autonomous technologies can deliver a wide range of benefits from improving ship performance to streamlining port operations and improving working environments and ship safety. However, while any risks associated with new technology need to be understood – financial or otherwise – risk often becomes the primary focus. We need to be careful not to demonise technology and instead adopt a more open approach where the benefits of automation and new technologies can be fully realised. I believe this small change in approach could have a positive impact not only on ESG performance, but on the maritime industry as a whole.

Carl Erik Høy-Petersen, Business Development Leader, DNV Maritime

We see that what gets measured, gets done, however without clear an aligned metrics across value chains and geographies stakeholders are not able to compare performance and make informed decisions. In Maritime we have seen that having clear metrics and reporting requirements has created a significant momentum on the GHG reporting and improvement side. Based on this I strongly believe that a global alignment and disclosure on key ESG metrics will have significant impact on ESG performance. Starting with key KPIs that are on the stakeholder agenda, e.g. crew welfare, safety performance metrics, diversity & inclusion (in management positions), sustainable sourcing and ethical business practice, ship recycling principles.

Nick Austin, Shipping Partner, Reed Smith’s Transportation Industry Group

The need to implement effective ESG policies in the shipping industry is as immediate and pressing as it is in other industries. It is also immensely challenging in a sector that many see as slow to embrace change in the ESG space. But the overwhelmingly negative reaction of the maritime world to the IMO’s Carbon Intensity Indicator (CII) regulations, rolled out in January 2023, is a welcome sign that the industry is more than willing to make rapid change when it needs to, in this case to meet the IMO’s laudable goal of reducing the carbon intensity of shipping by at least 40 per cent by 2030. Several workable alternatives have been proposed to measure shipping’s carbon intensity more accurately than the CII regulations, and so be more effective at reducing it. CII is a good idea, but if I could change one thing, it would be for the IMO to listen to the industry about how to make it better.

Efi Tsolaki, Chief Scientific Officer, ERMA FIRST

Transformation of ESG to a solution. Businesses must think about and manage their impact on the planet in new ways. Sustainability is a new aspiration and the key to achieving it is the development of sophisticated ways of measuring ESG activities and impact. One of the key points would be to integrate management practices for ESG into the core business strategy rather than treating it as a separate issue. GHG emissions are the ideal starting point for developing specific and objective metrics for the most important and immediate ESG reports.

Rohit Agarwal, Managing Partner, GUIDESHIP CONSULTING SERVICES LLP

If I could change one thing that would have an immediate or profound impact on ESG performance, it would be to encourage companies to prioritize material ESG issues in their business strategy and operations. By doing so, they can go beyond compliance and deliver tangible results that meet stakeholder expectations. There is no one-size-fits-all approach to addressing climate and ESG risks and opportunities for companies. Each company faces a unique set of challenges and opportunities when it comes to mitigating risks and capitalizing on opportunities related to climate and ESG issues. With an ever-increasing range of ESG issues to track and understand, companies cannot address every issue equally given the breadth of stakeholders and topics. Moving from intention to results is the next evolution that the stakeholders are looking for. This requires open, thoughtful and well researched dialogue on specific ESG issues and a transparent and strategic approach to addressing them. By making ESG issues central to their business strategy and operations, companies can outperform their competitors and communicate their superior performance, ultimately benefiting both the company and its stakeholders.

Irene Loucaides, Managing Director, Grow Sustainability Consulting

In my view, a company’s impact on the environment and society depends first and foremost on how it is governed. So the G in ESG is just as important as the E and the S. Good governance is fundamentally about improving transparency and accountability within existing systems by setting up a structure that is aligned with the company culture and values, appropriate policies that take into consideration sustainability principles and responsible business practices through a notified code of ethics and conduct, a clear corporate purpose which lies at the heart of the organization’s business strategy guiding all strategic decisions with a clear commitment from the top of the organizational hierarchy and takes a risk based approach to sustainability which extends beyond its own operation to that of its value chain by using specific and measurable KPI’s. That can have an immediate and profound impact on an organization’s ESG performance.

Gina Panayiotou, ESG Manager, West of England P&I

I would change corporate structures. For ESG to succeed it has to be fully immersed with the business strategy, so if all organisations had within their Board, ESG and change management experts, greater gender equality and age diversity, talent acquisition specialists, innovation and tech experts, that is when we would see and be able to reap the true benefits of ESG and the profound effect it can have on the performance of our sector; or at the very least have an advisory board with such composition feeding directly into the Board on a regular basis. We need all of these voices to have a “seat at the table” in order to future proof maritime. Determining the actual fuel, or energy source of the future is one thing; but for a long-term sustainable solution you need all talent on board, not just 50% of it, you need a compelling story, you need innovation, and you definitely need to be meeting shifting stakeholder expectations and requirements. Which is why my top pick as the one thing to change would be ensuring leadership and support teams are equipped for the ride.