The Poseidon Principles group of banks has agreed a “significant” revision to its reporting framework to move shipping portfolios closer into line with Paris climate targets.
The 30 signatories said the move also aligns with “ambitious” new International Maritime Organization decarbonisation goals.
The banks, which are committed to measuring and reporting the carbon intensity of their loan portfolios, represent about 65% of global ship finance.
They will now aim for net zero emissions in their portfolios in or around 2050.
Targets of between 20% and 30% emissions reductions by 2030 and 70% to 80% by 2040 are included in the new agreement, against a 2008 baseline.
The decision was unanimous, the group said, and followed the IMO’s adoption of a revised greenhouse strategy in July.
The Poseidon Principles explained that the framework was designed to be “living” and “evolving continually to meet the dynamic challenges of climate change”.
“In 2019, when we launched the Poseidon Principles, we chose to be transparent in our portfolio alignment against the then-IMO ambition set in 2018,” said chair Michael Parker.
“We, as the Poseidon Principles Association, are now raising our targets to align with the IMO’s new ambition announced at the end of MEPC 80 [the IMO’s Marine Environment Protection Committee] this July.”
The focus is on working with clients to help them to a greener, more sustainable maritime future through the energy transition to net zero once the fuels, ships and technology are available at scale.
Vice chair Paul Taylor said the revision goes beyond mere reporting, instead providing financial institutions with “invaluable data-driven insights”.
“The updated trajectories will empower Poseidon Principles signatories to elevate their ambition levels in measuring and reporting emissions. It’s a clear demonstration of their commitment to not just meeting but collaboratively advancing climate goals,” he added.
Taylor had signalled that changes were afoot during London International Shipping Week in September. He said a meeting had been set up later that month to toughen up targets that would ultimately result in a cutback in shipping finance.
But the group has postponed the introduction of an “extra pathway” for measuring climate alignment with a 1.5C future until 2024. This is being done “in harmony” with the processes of the Net-Zero Banking Alliance.
More details on the changes will be published in the Poseidon Principles’ annual report at the end of the year.
