Will Asia’s banks join the movement to decarbonise shipping?

(Eco Business, 25 Sep 2019) Chinese, Japanese and Korean banks are among the shipping industry’s top lenders. A new framework to promote low-carbon shipping needs Asian players on board to have wider impact.

Shipping, which the world relies on to move cargo around, accounts for about 2.5 per cent of global carbon emissions.

Three months ago, 11 international banks including Citi, Société Générale and ING signed a framework to promote responsible ship finance called the Poseidon Principles. Named after the god of the sea in Greek mythology, the framework will tie shipping finance to climate targets that are in line with the International Maritime Organisation’s (IMO) goal to halve shipping’s greenhouse gas emissions by 2050.

The 11 banks together represent a loan portfolio of about US$100 billion to shipping, or about 20 per cent of the total.

With ship financing pivoting east in recent years, however, the community knows it is vital to get Asian banks and financiers on board for the Poseidon Principles to have wider impact.

“We need and expect the Chinese, Japanese and Korean financiers, plus others in Asia, to sign up,” said Paul Taylor, Société Générale’s London-based global head of shipping and offshore.

“Asia is at the heart of the shipping industry and banks, lessors and export credit agencies have the opportunity to demonstrate their leadership in sustainable shipping finance by signing the Poseidon Principles,” said Taylor, who spoke to journalists on a recent trip to Singapore.

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Eco Business, 25 Sep 2019: Will Asia’s banks join the movement to decarbonise shipping?