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Poseidon Principles add BNP Paribas and Credit Suisse, but Asian financiers remain elusive

The Poseidon Principles has added two more global shipping banks, BNP Paribas and Credit Suisse, to support the UN climate targets, but it has thus far not yet attracted any Asian financial institutions.

BNP Paribas and Credit Suisse have become the 15th and 16th financial institutions to join the Poseidon Principles, the world’s first sector-specific, self-governing climate alignment agreement amongst financial institutions.

The signatories of Poseidon Principles include ABN Amro, Amsterdam Trade Bank, Citi, Credit Agricole CIB, Credit Industriel et Commercial, Danish Ship Finance, Danske Bank, DNB, DVB, Export Credit Norway, ING, Nordea, Societe Generale, and Sparebanken Vest.

The 16 signatories now represent around $140bn in loans to international shipping, or about 30% of the total global ship finance portfolio.

However, Societe Generale’s global head of shipping and offshore Paul Taylor said earlier that with Asia at the heart of the shipping industry and banks, lessors and export credit agencies have the opportunity to demonstrate their leadership in sustainable shipping finance by signing up to the Poseidon Principles.

Two state-owned Chinese banks, Bank of China and Export-Import Bank of China (China Exim), are the big lenders to shipping accounting for $33.5bn in loans as at end-2018, according to Petrofin Research.

Other big Asian players include the Export-Import Bank of Korea, China Development Bank, Korea Development Bank, Hiroshima Bank, Japan Bank for International Cooperation and Singapore’s DBS Bank.

At the Global Maritime Forum held in Singapore last October, Michael Parker, chairman, global logistics and offshore for Citi, expressed optimism in bringing onboard Asian banks. Kristin Holth, executive vice president, global head of ocean industries at DNB, weighed in to concur it is “important now to get more banks, Asian but also American (…).”

The Poseidon Principles prescribes to the strategy that greenhouse gas (GHG) emissions from international shipping must peak as soon as possible and that the industry must reduce the total annual GHG emissions by at least 50% by 2050 from 2008 levels, with an emphasis on zero emissions eventually.

The Poseidon Principles are applicable to lenders, relevant lessors and financial guarantors including export credit agencies. They are implemented in internal policies, procedures and standards and applied in all credit products secured by vessels that fall under the purview of the IMO.

The principles are intended to evolve over time to include other issues where the collective influence of financial institutions can help improve the contribution the maritime industry and its lenders can make to society.

Mario Behe, global head of ship finance at Credit Suisse, commented: “Along with our co-signatories, we aim to align our ship finance portfolio to be environmentally responsible and to lead by example in the reduction of GHG emissions.”

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