Charting a path to 2050: How investor engagement can accelerate the transition to zero carbon shipping

New analysis shows how investors can address portfolio companies’ shipping-related emissions

November 1, 2022
Michelle Collins,

Global shipping is a major source of greenhouse gas emissions, and investors have a vital role to play in pushing maritime shipping providers and users to set ambitious decarbonization targets and transition to zero carbon fuels. 

A new report published today by Environmental Defense Fund (EDF) and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping looks at how investors can engage with portfolio companies around shipping emissions, including commitments that companies should make on the pathway to decarbonization and disclosures that investors need to monitor progress.

The new report, “Maritime Makeover: The role for investors in decarbonizing shipping,” explores how the maritime shipping industry – responsible for roughly 3% of global greenhouse gas emissions – can align with Paris Agreement goals.

The analysis identifies a range of efficiency, operations and fuel-related strategies needed to decarbonize the sector. By taking steps to test and de-risk new fuel pathways, the industry can reduce long-term costs and manage the risk of price or fuel supply shocks in the future.

The upcoming year will be decisive as the International Maritime Organization (IMO) updates industry decarbonization targets and considers the adoption of market-based measures to help reach them. Investors, shipping customers and shipping providers alike should advocate for clean shipping policies and industry decarbonization.

"The transition to zero carbon shipping requires massive investments in new technologies, alternative fuel infrastructure and adjustments to the global fleet,” said Bo Cerup-Simonsen, CEO at the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping. “Investors can help accelerate the transition by requesting and financing real climate action from stakeholders across the maritime ecosystem. Ambitious global regulation can help create the certainty and confidence needed for investors to get this dynamic going."

Maritime shipping is central to the global supply chain, with nearly 100,000 commercial vessels moving 11 billion tons of goods each year. The world’s ocean fleet has doubled in capacity since 2005; if maritime shipping were a country, only five nations would emit more greenhouse gases. Emissions from the maritime shipping industry could increase 40% by 2050 if no changes are made.

Through the United Nations-backed Race to Zero, more than 500 major financial institutions have pledged to bring the emissions of their financed portfolios to net zero by 2050, reporting annually on progress. Cutting emissions from maritime shipping will be important to meet those goals.

“It’s crucial that we act on the limited window available to get the maritime shipping sector on track to achieve zero carbon emissions by 2050, as shipping is vital to the worldwide supply chain and plays a pivotal role in the global economy,” said Mark Brownstein, Senior Vice President of Energy at EDF. “This report reinforces the importance of immediate action and collaboration across investors, policymakers and shipping industry leaders to deploy strategies and technologies available today drive new zero carbon innovation and policies.”

Download the report here.

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