European shipping companies are still lagging in ESG reporting despite pending regulations set to come into force in two years.
The European corporate social reporting directive is already kicking in for larger stock-listed companies that need to meet its requirements from next year.
It has been created to offer greater levels of transparency regarding company sustainability efforts.
Smaller listed companies get pulled into the requirements in 2026, with many already beginning to adapt their sustainability reporting to be compliant. This will include most listed European shipowners.
A new report from Oslo-based Position Green reveals that there are no shipowners with an A- grade when it comes to meeting the standards in transparency and detail in their sustainability reporting.
The report lists companies on the Oslo, Copenhagen and Stockholm exchanges as well as the top 100 European companies.
Position Green founder and executive chairman Joachim Nahem said listed shipping companies still have a lot to do to have sustainability reports that meet the European Sustainability Reporting Standards.
The European reporting programme is the standard that companies must adhere to in order to comply with the corporate social reporting directive.
He told TradeWinds that shipowners’ reports have been graded from B to F in Position Green’s ESG100 scorecard, but none have achieved top grades.
In last year’s ESG100 report, only three owners achieved an A grade.
“This stuff is complex and shipping is behind the curve,” he said. “This is not an exercise that you do in two seconds.
“This requires diligent work getting this data and because it needs to be assured and disclosed, you cannot just make it up.”
The European directive mandates the disclosure of detailed environmental, social and governance data and introduces stringent assurance requirements.
The standards that shipowners will be expected to align their ESG reporting with cover a wide range of topics, including climate change, biodiversity, human rights and governance practices.
Nahem pointed to the volume of information required to be disclosed by the European sustainability framework, which can pose a transparency challenge in itself.
The Position Green report has been published annually since 2018, but this is the first time the company has graded sustainability reports directly against the new directive.
Some companies that achieved a good grade last year have found they have a lower grade this time round as they struggle to apply the standards, Nahem said.
