The Poseidon Principles establish a framework for assessing and disclosing the climate alignment of ship finance portfolios. They set a benchmark for what it means to be a responsible bank in the maritime sector and provide actionable guidance on how to achieve this.
The Poseidon Principles are consistent with the policies and ambitions of the International Maritime Organization (IMO), including its ambition for greenhouse gas emissions (GHG) to peak as soon as possible and to reduce shipping’s total annual GHG emissions by at least 50% by 2050.
As a result, the Poseidon Principles will enable financial institutions to align their ship finance portfolios with responsible environmental behavior and incentivize international shipping’s decarbonization – to shape a better future for the shipping industry and society.
The Poseidon Principles are applicable to lenders, lessors, and financial guarantors globally. They are intended to evolve over time to address other adverse impacts.
Principle 1 — Assessment of Climate Alignment
Commitment: Signatories will measure the carbon intensity of their shipping portfolios on an annual basis and assess their climate alignment relative to established decarbonization trajectories. This assessment is based on a robust industry-appropriate methodology.
Principle 2 — Accountability
Commitment: Signatories recognize the important role that classification societies and other recognized organizations play in providing unbiased information. They support and rely on the mandatory regulation established by the IMO for collecting data on fuel consumption from ships.
Principle 3 — Enforcement
Commitment: Signatories commit to making compliance with the Poseidon Principles contractual in their new business activities. They will use standardized covenant clauses and work together with clients and partners to meet this requirement.
Principle 4 — Transparency
Commitment: Signatories are required to report their portfolio alignment score on an annual basis. All Signatories’ scores will be published annually by the Secretariat of the Poseidon Principles.
To-date, 17 leading banks, jointly representing approximately USD$140 billion in shipping finance or about 30% of the total global ship finance portfolio have come together to commit to the Poseidon Principles: ABN AMRO; Amsterdam Trade Bank; BNP Paribas; BPIfrance; Citi; Crédit Agricole; Credit Suisse; Danish Ship Finance; Danske Bank; DNB; DVB Bank SE; Eksport Kreditt Norway; ING; Nordea; Société Générale; and Sparebanken Vest.
In January 2020, the world’s largest global shipping lender, BNP Paribas, leading wealth manager, Credit Suisse, and French credit insurer, BPIfrance, became the 15th, 16th, and 17th financial institutions as signatories.
The Poseidon Principles are the world’s first sector-specific, self-governing climate alignment agreement amongst financial institutions. They establish a common framework to quantitatively assess and disclose whether financial institutions’ lending portfolios are in line with climate goals set by the IMO, a specialized agency of the United Nations responsible for regulating shipping. The IMO’s target is for GHG emissions from international shipping to peak as soon as possible, and to reduce the industry’s total annual GHG emissions by at least 50% by 2050, with a strong emphasis on zero emissions.
The Poseidon Principles are designed to support ship owners in achieving the “at least 50% by 2050” reduction target and to help financial institutions in managing critical investment risks – to the benefit of business and society. “The decision of BNP Paribas and Credit Suisse to sign on to the Poseidon Principles represents another milestone for responsible ship finance. We welcome their leadership and we encourage other serious financial institutions to join them in serving global seaborne trade in a sustainable manner,” says Michael Parker, Chairman, Global Shipping Logistics & Offshore, Citi and Poseidon Principles Association. “As a leading and longstanding lender to the global maritime industry, we welcome the establishment of the Poseidon Principles, an industry-wide and self-volunteered initiative that reflects our own commitment to combat climate change and protect the oceans,” says Vincent Pascal, Head of Shipping & Offshore Finance EMEA, BNP Paribas.
“The Poseidon Principles are key to leading industry-wide change. 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. Joining the Principles shows our clear and continued commitment to sustainable shipping – being there to support our clients in their business and in their transition to a low-carbon shipping industry,” says Mario Béhé, Global Head of Ship Finance, Credit Suisse.
On 30-January-2020, BPRfrance signed up. “Bpifrance is a key player in the French shipping sector and a leading actor strongly committed to the ecological transition. By becoming a signatory of the Poseidon Principles, we aim at aligning our portfolio with the sustainability objectives set out by the IMO and we reaffirm, more broadly, our commitment to the ecological transition of France,” says François Lefebvre, General Manager, Bpifrance Assurance Export.
The Poseidon Principles were developed by Citi, DNB and Société Générale in collaboration with A.P. Møller Mærsk, Cargill, Euronav, Lloyd’s Register, Watson Farley & Williams, and technical expertise from Global Maritime Forum, Rocky Mountain Institute, and University College London Energy Institute.
The Poseidon Principles was established in June, 2019. The organization is based in Copenhagen, Denmark.
Source:
- https://www.poseidonprinciples.org/principles/