Big banks’ fleet emissions 20% off IMO net zero trajectory

Banks and financiers signed up to the Poseidon Principles—a framework for finance institutions to measure and report the alignment of their shipping portfolios with climate targets—have moved closer to alignment with the IMO’s greenhouse gas (GHG) emissions goals, according to its latest report. 

Signatories’ data showed the normalised emissions intensity of their combined fleets was 19.4% above the trajectory to reach IMO minimum targets, and 25% above the level needed to reach the IMO’s striving targets.

The initiative, which claims to account for almost 80% of the world ship finance portfolio across its 35 signatories, said its latest report shows “a noticeable progression” from last year towards aligning portfolios with the IMO’s goals. 

The IMO’s net-zero goals, laid out in the IMO revised GHG strategy, aim for net zero GHG emissions from shipping by or around 2050. The minimum and striving trajectories are derived from indicative checkpoints comparing emissions from shipping to those recorded in 2008; in 2030, the minimum target is a 20% reduction and striving is 30%; in 2040, the minimum target is 70% and striving is 80%.

The climate alignment score used in the Poseidon Principles report compares the emissions intensity of vessels in a fleet—the amount of CO2 emitted per deadweight tonne-nautical mile—against the allowed emissions intensity—the amount a vessel can emit under the given trajectory, based on the ship’s deadweight tonne capacity.

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Against the minimum target, the figures for the 2024 report improved by 7.2 percentage points over 2023, and by 7.0% for the striving trajectory. A narrower range of results showed less variability in and increased progress in cargo performance, said the report.

Scores from signatories ranged from 8% below the minimum trajectory to 61.5% above it, and from 3.5% below the striving target to 69.4% above that.

“The Poseidon Principles have redefined what is possible in transparent climate reporting for the shipping industry,” said Michael Parker, Poseidon Principles chair and chairman of global shipping & logistics, Citi.

"As we celebrate the fifth anniversary of this initiative, we recognise both the progress made and the opportunities ahead - this milestone shows how far we have come in five years, but also serves as a reminder that we are now five years closer to critical decarbonisation targets for 2030, 2040, and 2050. We must accelerate efforts, addressing key areas of misalignment and ensuring collective ambition turns into transformative action."

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The accuracy of the climate alignment scores has increased over the Poseidon Principles' history, with an average reporting percentage of 93.3% among signatories, and 80% of signatories reporting data for over 90% of their shipping portfolio. Eight of the 35 signatories reported 100% of their eligible portfolio.

The 35 signatories to the Poseidon Principles include Citi, DNB, Nordea, KFW Ipex-Bank, Standard Chartered, and ABN-Amro. The total increased by five compared to the 2023 report.

An initiative of not-for-profit Global Maritime Forum, the Poseidon Principles aims to increase environmental transparency and accountability in ship financing through climate disclosure reporting, highlighting climate and environmental impact to support risk management and strategic planning.

“We have much to celebrate in this annual disclosure report, especially in terms of increasing levels of transparency” said Paul Taylor, vice chair of the Poseidon Principles and global head of maritime industries, Societe Generale.

“However, alignment with 2050 net zero goals remains a challenge, in particular for certain vessel types that are facing operational complexities. Now, the Poseidon Principles’ adoption of well to-wake emissions reporting offers a robust foundation for addressing these challenges head on. The Poseidon Principles will continue to evolve, setting new benchmarks for transparency and commitment to a sustainable future.”

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