Financial institutions have for some time required Environmental, Social and Governance (ESG) reporting from their customers. This trend is driven by requirements related to the offering of financial instruments such as green and sustainability-linked bonds and low-carbon funds, and through direct disclosure regulations such as the EU Sustainable Finance Disclosure Regulation (SFDR).
What does ESG mean for the shipping industry?
In the maritime world, similar to other industries, ESG reporting covers topics such as recycling, greenhouse gas emissions, other pollutants to air, ecological impacts, business ethics, employee health and safety, as well as accident and safety management.
ESG reports and sustainability reports aim to disclose performance on parameters within all three areas that are important for the company’s operation. The reporting serves to satisfy stakeholders’ demands for transparency on corporate responsibility issues. It also conveys that the company has policies, initiatives and strategies in place to manage the ESG risks and opportunities.