Sumitomo Mitsui Finance and Leasing (SMFL) has become the first specialist leasing company to join the Poseidon Principles for responsible and sustainable ship finance.
It is also only the second Japanese ship financer to sign up, following in the footsteps of Sumitomo Mitsui Trust Bank.
Poseidon Principles Association chair Michael Parker, chairman of global shipping, logistics and offshore at Citi, has previously told TradeWinds he expects to see more banks sign up.
From this year, SMFL will record the reductions in carbon emissions achieved from its financed fleet in line with the initiative's reporting requirements.
“Through the Poseidon Principles initiative, we will enhance our commitment to the decarbonisation agenda and support our maritime clients' financing needs in the context of contributing to the efforts to build a carbon-free and renewable energy-based society,” SMFL said.
One shortcoming of the Poseidon Principles is that it has not been able to attract support from financers in Asia, a major source of ship finance.
Japanese and Chinese long-term leasing arrangements have been major growth areas in ship finance since the withdrawal of European and US banks following the 2008 financial collapse.
Japan’s long-term lease scheme with call option, known as Jolco, has been one of the most popular forms of newbuilding finance over recent years.
Speaking at a recent Capital Link conference, Sumitomo Mitsui Trust Bank’s head of global ship finance, Koichi Onaka, a Poseidon Principles steering committee member, said he expects more Japanese banks to join.
“The Japanese mega-banks will follow, especially since Prime Minister [Yoshihide] Suga said Japan will reduce to zero emissions by 2050. The environment is a key issue and shipping is not an exception,” he said.
The Poseidon Principles aim to contribute to shipping's commitment to mitigating climate change risk, based on the medium to long-term reduction target for greenhouse gases agreed at the International Maritime Organization.
