Shipping banks are unhappy with the lack of clarity on the industry’s approach to environmental issues.
DNB’s global head of shipping, Christos Tsakonas, told the Marine Money Asia conference in Singapore that environmental considerations are “extremely important”, but said the question is how far must banks go.
“I look at my competitors here and say, ‘Would you stop financing companies and say no to profitable deals if you are not satisfied with the way they recycled their ships?’,” he said.
“There is a lack of clarity. Which convention do you want people to adhere to? Is Hong Kong enough, or are we going to have our own standards? It is something we need to look at very seriously.”
Tsakonas described it as a “very complicated situation”. He does not think it is enough just to say “we will comply”, it is also a question of how you do it — and if people do not meet the necessary requirements, what are the consequences?
Financial institutions' growing role
Societe Generale’s shipping head for Asia-Pacific, David Gore, said financial institutions have a growing role in promoting sustainable practices.
“We believe that, and take active steps to promote the environment and sustainability, including being a founding member of marine LNG-fuelling industry coalition SEA\LNG, as well as partnering the EIB [European Investment Bank] in their green shipping programme,” he said.
On scrubbers, Tsakonas and Gore appeared sceptical, but said they are willing to help shipowners finance installation.
“I think a lot of people are scratching their heads as to what is the best solution. We will certainly — and I think I speak for all banks here — look to finance projects that assist the environment,” Tsakonas said.
“Personally, I am not convinced that this is the optimum solution, but it is the one we have to adhere to. So we will look at financing scrubbers.”
Gore agreed that the jury is still out on how green the technology really is, but said Societe Generale has allocated a “certain amount of capital” for scrubber financing.
“We have a specific allocation for that because one of the challenges of scrubber financing is that it is often unsecured financing. You cannot get a mortgage on the scrubber in the same way as you would do with a ship,” he said.
