Regulation ‘drawing clearer levels of ambitions’ for the shipping industry as a whole – Sustainable Shipping Initiative

This is the first of a two-part series on what it takes for the maritime industry to meet its net-zero ambitions by around 2050. The second part of this series can be read here. 

Responsible for carrying around 90% of traded goods globally, the shipping industry’s decarbonisation efforts will have significant implications – which could include increased costs being passed onto consumers.

After failing to reach a consensus on a hard target to achieve net-zero emissions after two weeks of negotiation in 2023, the 175 member states of the International Maritime Organisation (IMO) settled for “by or around 2050.”

Even so, this target remains challenging, as it takes all greenhouse gas emissions into account across the full life cycle – from production to the combustion of fuels.

Regulations alone will not suffice. The IMO’s Revised Strategy has singled out public-private partnerships as a key accelerator to bridge the gap between the target and actions needed.

Speaking to GovInsider, the Head of Decarbonisation with the Sustainable Shipping Initiative (SSI), Andreaa Miu, breaks down the multitude of factors needed to meet this target.

1. Your organisation represents a diverse group of stakeholders. What are the common challenges and concerns different members (shipowners, cargo owners, investors, etc.) face regarding the transition to net-zero?

SSI brings together leaders across the shipping industry ecosystem for a sustainable future. And so, addressing the common challenges and concerns of our diverse stakeholders is vital.

Within SSI, the transition to net-zero and wider sustainability involves recognising unique perspectives and priorities and building a common way forward through translating opportunities and pressures into action.

SSI has been at the forefront of emergent change and sustainability ambition for almost 15 years, and more recently we have seen regulation draw clearer levels of ambition for the industry as a whole, and the drivers necessary to push forward are clearly and more compelling than they ever have been before.

The continued common challenges span innovation, compliance, financial implications, data and reporting, collaboration, workforce transition, all while aligning with market demand and consumer expectations. There is much still to be done, but with our members, partners and stakeholders we have a pivotal role in fostering dialogue and collaboration.

Together, we seek an environment conducive to developing and implementing collective solutions. Through initiatives, knowledge-sharing, and innovative projects, SSI is committed to guiding its members and the wider industry toward a sustainable, net-zero future.

2. Collaboration is key, but different stakeholders have varying priorities and goals. How can we bridge these gaps and build consensus around effective decarbonisation strategies?

In navigating the diverse landscape of stakeholder priorities and goals, the key lies in fostering open and transparent communication. SSI recognises that collaboration is pivotal for effective decarbonisation, and bridging gaps requires understanding and respecting the unique perspectives of each stakeholder.

To build consensus and bridge gaps, SSI employs a multifaceted approach. Through our member relationships, our partners, and collaborators but also wider stakeholder engagement and consultation. We actively seek to understand pain points, pressures and priorities, our sense making approach is key to ensure inclusivity in decision-making.

Identifying common ground and shared objectives is a priority, focusing on overarching sustainability goals aligning with the broader maritime industry vision. SSI is committed to facilitating change and acting as a neutral platform for stakeholders to come together, share insights, and collectively shape the future of sustainability in the maritime sector. By promoting inclusivity and collaboration, we aim to bridge gaps and build consensus for effective and sustainable strategies.

3. Transparency and accountability are crucial for achieving net-zero. What role can industry initiatives and reporting frameworks play in ensuring progress and addressing potential greenwashing concerns?

Robust transparency initiatives and reporting frameworks are required to ensure sustainability progress and address the risk of greenwashing. These frameworks often set clear guidelines for, for example measuring and disclosing climate-related risks, fostering transparency in emission reduction efforts.

By actively participating in such frameworks, the industry can standardise reporting practices. Additionally, industry initiatives often foster collaboration, encouraging companies to share best practices and lessons learned.

SSI advocates for the adoption and adherence to such initiatives and frameworks, promoting a culture of accountability and facilitating honest reporting on the journey towards net-zero and sustainability in its widest sense. This collective commitment enhances the credibility of sustainability efforts and contributes to the industry's genuine progress.

Greenwashing is a huge concern, and one that must be taken seriously. However, by telling the stories of real success then we can show what it takes to make real change. When we can develop a view of what good really looks like, we can tell what greenwashing sounds like.

4. Financing remains a key hurdle for many decarbonization projects. What specific measures can financial institutions and investors take to support the transition to a net-zero maritime sector?

Unlocking financing for sustainability requires willingness and insight. It needs banks, funds, institutions, and investors to rally to the cause of decarbonisation and beyond and collaborate to drive the industry forward.

To accelerate the sustainability transition, a multifaceted approach to financing is essential. This involves developing risk mitigation instruments like green bonds and carbon credits, creating incentive structures tailored to the maritime sector, and introducing specialised green financing products such as loans and venture capital.

Collaborative financing platforms and industry consortia can pool resources and streamline investment processes, while industry-specific certification standards can enhance project credibility. This is the joined dotted line between finance in, certification for reassurance, and the mechanism to respond to growth.

Encouraging long-term investment commitments, fostering knowledge transfer initiatives, and promoting public-private partnerships with rigorous due diligence on Environmental, Social, and Governance (ESG) criteria are vital components. These measures collectively empower financial institutions and investors to support sustainable maritime projects effectively.

5. The maritime industry plays a vital role in global trade. How can we ensure a sustainable future for the industry while balancing economic considerations and social responsibility?

Ensuring a sustainable future for the maritime industry requires a delicate balance between economic considerations and social responsibility. Therefore, we must take a holistic approach and comprehensive strategy to ensure a sustainable maritime future.

On one side of the equation, this involves investing in low and zero emissions technologies, such as alternative fuels, energy efficiency measures, and zero emissions vessels, aligning with environmental goals and ensuring long-term economic viability.

Encouraging research and development initiatives fosters economic growth through innovation that addresses both environmental and social concerns. Prioritising socially responsible practices, including fair labor practices for seafarers, such as the SSI IHRB Code of Conduct, can contribute to a positive industry image and a sustainable workforce.

Collaboration and stakeholder engagement, transparent reporting mechanisms, education and training programs, incentives for sustainable practices, embracing circular economy principles, and involving local communities in decision-making processes further enhance the industry's responsible and balanced approach.