The Push for ESG Data is Coming to the Maritime Industry – The Maritime Executive

The Push for ESG Data is Coming to the Maritime Industry The Maritime ExecutiveThe Push for ESG Data is Coming to the Maritime Industry The Maritime ExecutiveThe Push for ESG Data is Coming to the Maritime Industry The Maritime Executive

Public domain image. The corporate world is increasingly tying profitability and sustainability to environmental and social criteria. The shipping industry can expect both challenges as well as benefits. Customers, financiers, insurers, regulators, and customers are all pushing for ESG. These include companies like Amazon, Unilever and HP as well as IKEA and many other large companies. ESG is not a static topic. Ship owners and operators must embrace ESG strategies and take advantage of the opportunities. Otherwise, they risk being left behind. If ESG sounds like greenwashing to you, this is because global ESG assets are expected to surpass $53 trillion by 2025. This represents more than a third the $140.5 trillion in total assets under management according to Bloomberg Intelligence. How can the shipping industry make a difference and what data structures will it need to show its performance over time? OneWeb, a satcom company, sponsored a discussion on these issues with a panel of experts, including ship owners, innovators, and insurers. K D Adamson, a leading futurist, pointed out that we choose and prioritize data that is relevant to our worldview. “This is important because what you value is intrinsically tied to what you measure. Until now, financial data was dominant, linked to centuries-old economic, environmental, and societal priorities and assumptions. Adamson stated that these priorities are changing and that new metrics, both non-financial and the Human Development Index, provide a completely new view of the world. Investors, consumers, and employees are demanding reliable, standardized information to support long-term assessments on decarbonization, resource scarcity management, talent management and data security, crew welfare and diversity, as well as business ethics. She believes we are moving into an era where there is more transparency than just more regulation. Anthony Gurnee (CEO of Ardmore Shipping) recalled a quote by a professor of strategic who predicted that companies will need to reach the twin peaks in economic performance and social progress in order to succeed in the 21st Century. “We are witnessing generational changes and you need a new approach to attract the best people. He said that they are very happy with this. He added that ESG is a set external metrics and businesses will naturally score higher if they have the right culture and philosophy to deliver these metrics. A company that has a progressive culture and focuses on performance improvement in all ESG areas, such as crew welfare, environmental performance / carbonization, and crew welfare, will be more successful than one that is trying retrofit its conduct to meet specific criteria. Amy Barnes, a Marsh risk advisor and insurance broker head of climate strategy and sustainability strategy, was a fellow panelist. She noted that the financial sector is moving at a faster rate than the IMO’s 2050 goals because they are concerned about stranded asset and their portfolio’s contribution towards climate and sustainability. The goal of all insurers is net zero underwriting. She stated that although it is difficult to pinpoint the data that is most important, being data-ready is crucial as everything is moving at a faster rate than many of us anticipated. Shipping cannot rely on the IMO for action as the opportunities and needs will be dynamic and driven both by land and sea activities. Roberto Coustas (CEO of DeepSea’s maritime AI tech company DeepSea), reminded us that the solutions will not come from simply collecting large amounts of data and then deciding which information is useful. In fact, this is counterproductive. He suggested that companies should start by focusing on the data that is necessary to create value. This was a view that was supported by other panellists. Managers and ship operators should start with smaller data sets, and use these to test hypotheses or inform their ideas. It is expected that the ESG metrics required at an industry level will be relatively straightforward as an initial basis for first comparisons. Big data is not the enemy. Big data is an essential part of the solution. However, it is important to know how to use the data. Industry leaders will be able to perform data triage and curate data to extract insights. This will make them stand out from others struggling with complex, opaque data. This trend will continue to grow. Already, machine learning and AI solutions are playing a pivotal role in areas like vessel optimization and sanctions risk mitigation. ESG success is dependent on a long-term perspective. Although the pressures are real, it is a marathon and not a sprint. Independent, listed, or family-run boards need to have a long term vision and ensure that ESG strategies become part of their overall corporate strategy. This must be driven from the top, as well as a collaboration between value-chain partners. It can be difficult to see the benefits of improving ESG-related performance when you are trying to navigate these complexities. Success will result in more investment, talent, and customers. Ships can be elevated in commerce and communities by being seen as data-driven platforms that offer opportunities to create more financial value and societal value. OneWeb’s head of maritime is Carole Plessy. These opinions are not necessarily those of The Maritime Executive.

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