The Poseidon Principles for Marine Insurance, an initiative backed by the Global Maritime Forum to drive decarbonisation of international shipping through transparency, has issued its second annual disclosure report. This report arrives amidst a transformative year for the maritime sector marked by key events: the IMO’s adoption of the revised greenhouse gas (GHG) strategy at MEPC 80 in July, and ongoing challenges like congestion, personnel shortages, inflation, and sanctions linked to Russia’s war on Ukraine.
For the second year, signatories submitted two climate alignment scores based on the 50% and 100% CO2 reduction trajectories established against the 2018 IMO and Paris Agreement goals. The 50% CO2 reduction trajectory, as outlined in the 2018 IMO Initial GHG strategy, sets a target for a minimum 50% reduction in absolute CO2 emissions by 2050 compared to 2008. On the other hand, the 100% CO2 reduction trajectory takes steps towards alignment1 with the Paris Agreement on climate and aims to achieve 100% CO2 reduction by 2050 to limit global warming to well below 2, preferably to 1.5°C, compared to pre-industrial levels.
Delving into the scores of ten marine insurer signatories and the continued support from nine affiliate members spanning nine countries, the second annual report serves as a comprehensive account of the initiative’s journey, shedding light on the ongoing progress toward alignment with the climate ambitions of both the IMO and the Paris Agreement. While more progress is needed, there are positive signals, with two signatories showcasing scores within +5% of the IMO’s ambition, detailing both progress and challenges.
"We are dedicated to fostering continuous learning and progress, with a primary focus on advancing the decarbonisation of the global shipping sector and enhancing transparency," said Patrizia Kern-Ferretti, Chair of the Poseidon Principles for Marine Insurance. "This report aims to raise awareness of our endeavours, shedding light on the pivotal role marine insurance plays in the industry's transformation. It also underscores the work demonstrated by a small but growing group of insurers, exemplified through their involvement with the Poseidon Principles for Marine Insurance.”
It’s important to note that comparing scores across different years in the realm of marine insurance isn’t a straightforward process. Vessel coverage within a portfolio composition can vary from year to year and is influenced by factors such as one-year contracts and the “leader follower” mechanism2, implying numbers should be considered over a specific period.
“This report reflects commendable levels of data sharing between ship owners and marine insurers, but there is still room for improvement in both data collection and scoring methodologies,” said Rolf Thore Roppestad, Vice Chair of the Poseidon Principles for Marine Insurance. “The active involvement of both signatories and affiliate members plays a pivotal role in raising awareness about the Poseidon Principles for Marine Insurance and, consequently, propelling the industry towards positive change.”
The report highlights the importance of building connections and raising awareness, emphasising the affiliate members’ pivotal contribution to industry transformation. The Poseidon Principles for Marine Insurance will incorporate trajectories aligned with the revised 2023 IMO GHG in the upcoming phase, with checkpoints in 2030 and 2040, employing a comprehensive well-to-wake approach. Priorities involve refining data collection and expanding membership to enhance the initiative’s impact.
"Following MEPC 80's outcome of reducing total GHG emissions by at least 70%, with a goal of 80% by 2040, compared to 2008, the Poseidon Principles for Marine Insurance are becoming increasingly relevant to our work in assisting shipowners in the transition to the new regulatory era,” said Ilias Tsakiris, CEO of Hellenic Hull.“ We are pleased to be at the forefront of this development as a founding member of the initiative, and we look forward to collaborating with shipowners in this transition."
The Poseidon Principles for Marine Insurance 2023 Annual Disclosure Report is available for download here.
