Leading shipping finance banks have joined industry players in support of faster action to cut carbon emissions by the sector.
In April, the United Nations shipping agency reached an agreement to reduce CO2 emissions by at least 50 percent by 2050 compared with 2008 levels, which fell short of more ambitious targets.
The UN’s International Maritime Organization (IMO) is meeting in London this week to work on an initial strategy on cutting greenhouse gas emissions.
In the meantime, bankers in the shipping sector have come together for the first time aiming to boost momentum toward de-carbonization.
“We believe it is important for banks to support the IMO’s vision in making shipping a cleaner and more environmentally sustainable industry,” said Michael Parker, global head of shipping with Citi.
“We encourage other lenders to the industry to join us in supporting this call to action,” he said in a statement on Wednesday.
The initiative has been led by the Global Maritime Forum (GMF), an international non-profit foundation trying to drive change in the shipping industry.
The GMF said it was working with financial institutions, shipowners and other bodies “on a set of principles for the inclusion of climate alignment and climate risk considerations in lending decisions”.
The GMF said the shipping industry’s greenhouse gas cuts would require “absolute reductions” in carbon emissions to accommodate an expected growth in global trade.
“The requirement for the industry to work toward a de-carbonized future is accepted by the GMF,” said Peter Stokes, chairman of the GMF, who is also head of shipping with financial advisory firm Lazard.
The shipping sector, along with aviation, avoided specific emissions-cutting targets in a global climate pact agreed in Paris at the end of 2015, which aims to limit a global average rise in temperature to “well below” 2 degrees Celsius from 2020.
Other banks involved included Norway’s DNB, Germany’s KfW IPEX-Bank and France’s Societe Generale Corporate & Investment Banking – all of whom are active lenders to the industry.
The banks are part of 46 companies that have joined GMF, which also include trade houses Cargill, Trafigura and shipping groups such as A.P. Moller Maersk and Euronav.
“The shipping sector clearly shares a collective responsibility to transform its operations, build new technologies and infrastructure, and make sustainable shipping a reality,” said Jan Dieleman, president of Cargill’s Ocean Transportation division.
Shipping accounts for 2.2 percent of world CO2 emissions, according to the IMO.
The IMO has adopted mandatory rules for new vessels to boost fuel efficiency as a means of cutting CO2 from ship engines. A final IMO plan on measures is not expected until 2023.
In separate climate action, the IMO, which responsible for regulating pollution from ships, has set new rules that will ban ships from using fuels with a sulfur content above 0.5 percent from Jan. 1 2020, compared with 3.5 percent now unless they have equipment to clean up sulfur emissions.