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Poseidon Principles makes first report on decarbonisation target

Photo: Global Maritime Forum Poseidon Principles.jpg
Launch of the Poseidon Principles in June 2019
A first-of-a-kind climate finance report has been disclosed by the 15 bank signatories of the Poseidon Principles, showing that the average decarbonisation trajectory fell short of IMO’s initial greenhouse gas (GHG) emissions target.

The assessment by each signatory includes emissions data collected from clients and the portfolio information from 2019, compared to a decarbonisation trajectory for the same year.

It shows that three financial institutions’ ship finance portfolios are aligned with IMO’s initial GHG strategy, representing 20% of the results, while 12 banks’ portfolios are not.

The IMO’s initial GHG strategy aims for international shipping to reduce its total annual GHG emissions by at least 50% of 2008 levels by 2050, whilst pursuing efforts towards phasing GHG emissions out as soon as possible in this century.

The Poseidon Principles first report’s average score was +1.2%, with scores ranging from -44.92% to +32%. The average climate alignment score of reporting signatories was broadly in line with the IMO initial GHG goal. Of the misaligned signatories, half had a score of +5% or less.

“The report marks a significant milestone for global ship finance and for climate finance reporting as a whole. I commend my fellow signatories for their pioneering efforts to be transparent and accountable for their role in promoting responsible environmental behavior. I encourage other serious banks and export credit agencies to join us in supporting global seaborne trade in a sustainable manner,” said Michael Parker, Chairman, Global Shipping, Logistics and Offshore, Citi, and Chair of the Poseidon Principles Association.

The Poseidon Principles Annual Disclosure Report 2020 includes climate alignment reporting from 15 financial institutions, most of which became signatories in 2019, including ABN Amro, Amsterdam Trade Bank, BNP Paribas, Bpifrance Assurance Export, CIC, Citi, Credit Agricole Corporate and Investment Bank, Danish Ship Finance, Danske Bank, DNB, Eksportkreditt Norge, ING, Nordea, Sparbanken Vest, and Societe Generale.

Announced in June 2019, the Poseidon Principles became the first sector-specific climate alignment agreement for financial institutions.

Today, there are 20 financial institutions in the Poseidon Principles represent over $150bn in loans to international shipping – more than a third of the global shipping finance portfolio.