Sustainability and diversity make the difference in the shipping industry

Kyveli Manta, executive of our Underwriting Department comments on the international maritime trends in the context of the Future Maritime Leaders Essay Competition of The Global Maritime Forum,

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which gave young people (aged 18-30) a chance for their voice to be heard in the debate about the future – and companies a chance to listen.

Sustainability and diversity, as well as a new collective spirit, can once again make our fragmented industry a beacon of hope for the future

In the past, shipping was better-integrated with society than it is today. Ships promised new horizons and the industry offered an outlet for adventure, ambition and advancement. Ships brought news and hope along with precious commodities.

Today, they generally load and discharge at remote terminals distant from city centres, and the industry is under-appreciated, both in terms of the service it provides and the jobs it can offer.

We believe that shipping can once again become a young person’s industry and a beacon of hope in our global future. To do so, the young generation of executives will be vital in taking the industry beyond the need to comply with decarbonisation requirements and buzzwords about digitalisation, the two topics that dominate current discussion in the industry.

Decarbonisation and digitalisation are indeed pivotal goals for the future of shipping but so much more is needed to bring about our vision for the maritime sector. The concepts of equitable growth, transparency, inclusion and diversity, as well as employee well-being and fulfillment are also part of a new, sustainable approach to the industry that is only just starting to be discussed.

The coronavirus pandemic has, ironically, enabled the industry to take faster steps in the direction of a digital future as well as highlighting the importance of seafarers  – even if this has occurred at the expense of crews suffering at seas without knowing when, or in some cases if, they can be relieved and go home.

We consider that a new pact with seafarers is pivotal to the future face of shipping and that principles such as human rights, gender equality, dignity, safety and education will be meaningless if applied to the wider maritime sector but not on board the ship itself. The industry should rededicate itself to the primacy of the human factor, together with training and ship-shore communication, albeit with an enhanced role for AI, automation and data in efficient, green operations.

 A focus on Environmental, Social and Governance (ESG) factors has lately been injected into the industry bloodstream and is being pushed by a number of investors, financiers and major charterers.  But this has yet to have much impact on the largest swathe of companies.

In our own marine insurance sector, for example, where we are well-placed as underwriters and clubs to help mold a new mentality, American Hellenic Hull Insurance Company is to date the sole specialised marine hull underwriter that has embraced sustainable principles as outlined in the United Nations Environment Programme Finance Initiative’s Principles for Sustainable Insurance initiative, UNEPFI’s Sustainable Blue Economy Finance Initiative and the Ship Recycling Transparency Initiative, hosted by the Sustainable Shipping Initiative. These and other programmes provide a useful guide for the maritime industry to follow.

The UN’s  sustainable development goals (SDGs) have been approved by the International Maritime Organization but many of the SDGs need to be further quantified for maritime and as yet uptake is relatively low.

The main focus at the IMO is reduction of Green House Gas emissions by 40% in 2030 and by 50% in 2050. The urgency of the targets means that the future of shipping is likely multi-fueled and a broad spectrum of fuel options and other strategies remains under consideration.

While shipping is called upon to be ambitious in contributing to the battle against the Climate Crisis, at the same time we should always encourage commercial decisions that support long-term sustainability for the maritime sector. For the GHG 2050 goals to be achieved, emerging green and sustainable technologies must become more commercially available and hence become a real option for shipowners.

Taking into account all the challenges the industry is facing, we propose that within the next five years it is important to develop a firm roadmap for the energy transition and also a heatmap quantifying the SDGs for the maritime adventure.

But the 2050 target for all the ESG issues in the maritime industry, including decarbonisation, is within reach only if all stakeholders are actively engaged. Only by sitting at the same table and jointly developing solutions and working out pathways to attain them will the maritime sector make the transition towards a more sustainable future on time.

In an industry where manufacturers, energy suppliers, financial services, shipowners and end-users – and even regulators – are used to strategising in their individual silos, and often engage in adversarial thinking, such a level of collaboration would be revolutionary. Yet progress is conditional upon it. International co-operations, synergies and working groups are the key to success. We envisage the need for new transitional bodies and alliances to be formed to advance the agenda of sustainability within shipping. The greater the interaction between different stakeholders and the more extensive the collectivity, the more innovation can be harnessed and the cost of new technologies be controlled.

We believe that for businesses today being sustainable is a key priority.  Embracing sustainable principles and practices can be a commercial game changer for shipping players of all types, while investors, financiers and major clients converge in partnering them while calling other, unsustainable businesses to account. 

The maritime sector has long argued that shipping is the most environmentally friendly transport sector and among the most globally-minded and people-oriented of all businesses. It is now time for it once again to “walk the talk”, which will be crucial to attracting a younger generation to the shipping community.  A younger generation of executives that puts value on tech innovation, green principles and diversity – but not on fragmentation and old adversarial tropes – will be vital if our hopes for the maritime sector are to be fulfilled.

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