Whether he planned it or not, Michael Webber's name has become synonymous with corporate governance in shipping as investor focus is keener — and greener — than ever.
It has also been taken in vain by disgruntled shipowners who have landed on the wrong end of his “scorecard” rankings.
The spotlight he has shone on related-party fees, incestuous boardroom relationships and other shaky practices is not fading.
Carbon focus
The analyst has taken his former Wells Fargo Securities ratings to his new shop, and is about to expand it to rank owner transparency on carbon emissions.
Speaking to TradeWinds, Webber gave insight into how he pushed the research on an industry, and the momentum behind the environmental and social governance (ESG) movement.
“We were able to lean in on the issue because of the position we’d built,” Webber said.
“We had a strong client base and were fortunate to start getting some public recognition right before ... the initial scorecard,” he said, alluding to an Institutional Investor magazine annual investor vote.
“We knew we had some defensible ground to try to move the needle.
“Shipping’s quest for better governance started well before we put out the first scorecard. We were just in a strong enough position that we could help ramp up the volume, and not worry as much about the pushback.”
And yes, Webber and his team got pushback.
As much as owners toward the top of the tables embraced the research, the dozen or so at the bottom were not amused.
Interesting calls
“We got a lot of interesting phone calls — some angry — and even a few formal complaints over it that ultimately went nowhere. We took great pains to make sure we were buttoned up and accurate."
Webber announced last year that the scorecard would be updated this spring to evaluate owners’ transparency in publicly reporting their carbon emissions. For now, Webber is not scrutinising levels, merely the reporting.
“Carbon emissions is something that shipping companies are taking very seriously and they’re working on disclosure,” Webber said.
“The writing is on the wall. The smart management teams have recognised that energy transition is not a fad and they need to keep this on their dashboard.”
Webber praised Citigroup’s Michael Parker and other major lenders who crafted the Poseidon Principles, a framework that links availability of debt capital with green shipping.
ESG importance
Likewise, he noted the increasing importance of ESG for owners.
As much as “environmental” is the first word in that acronym, Webber noted that “governance” remains very much a factor for shipping.
“Capital stewardship in general is still the most important factor.
"Investors who have seen multiple cycles — particularly generalist portfolio managers — they may not remember every detail about the space, but they remember who lied to them. That’s something they do not forget.”
While such scars compound shipping’s general image problem with investors and probably have amounted to blacklisting in a few cases, Webber struck a positive tone.
“It may not feel like it, but it really is getting better,” he said.
“These aren’t quick changes, and the lack of capital markets activity kind of masks it a bit. Considering the momentum behind ESG fund flows, restrictions in lending, and regulations driving a higher degree of transparency, everyone is having to grow up a bit, even if they don’t want to.”
