A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE...A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE...

A GLOBAL FRAMEWORK FORRESPONSIBLE SHIP FINANCE

N O V E M B E R 2 0 1 9

A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE │ NOVEMBER 2019 │ 2

HOW DID THE POSEIDON PRINCIPLES COME TO BE?

Poseidon Principles

Financial InitiativesShipping sector commitments


PRINCIPLE 1 – ASSESSMENT OF CLIMATE ALIGNMENT

https://www.poseidonprinciples.org/#home



PRINCIPLE 2 – ACCOUNTABILITY




PRINCIPLE 3 – ENFORCEMENT




PRINCIPLE 4 – TRANSPARENCY




IMPACT ON SHIPPING COMPANIES

AER data to be shared with banks

via new loan covenant

Bank data requirement aligned with

IMO

More communication with financiers

re operational efficiency of vessels

Greater liquidity available

for new eco-friendly vessels

Less liquidity available for older less

efficient vessels seeking refinancing

Generally positive feedback from

majority of shipowners “The [Owner] shall, upon the request of [any Lender] and at the cost

of the [Owner], on or before [31st July] in each calendar year, supply

or procure the supply to [the Facility Agent] [such Lender] of all

information necessary in order for [any Lender] to comply with its

obligations under the Poseidon Principles in respect of the preceding

year, including, without limitation, all ship fuel oil consumption

data required to be collected and reported in accordance with

Regulation 22A of Annex VI and any Statement of Compliance,

in each case relating to the [Vessel] for the preceding calendar year

[provided always that [no Lender] shall publicly disclose such

information with the identity of the [Vessel] without the prior written

consent of the [Owner]/[.For the avoidance of doubt, such

information shall be [“Confidential Information”][“Information”] for the

purposes of [Clause [•] (Confidential Information)][Section [•]

(Treatment of Certain Information; Confidentiality)]] but the [Owner]

acknowledges that, in accordance with the Poseidon Principles, such

information will form part of the information published regarding the

[relevant] [Lender’s] portfolio climate alignment”


EXAMPLE OF DISCLOSURE REQUIREMENT SUBMISSION


CALCULATING THE CLIMATE ALIGNMENT OF VESSELS

Alignment requires:

• Individual vessel’s annual carbon

intensity (gCO2/tnm)

calculated from IMO DCS data

• Decarbonization Trajectory

provided by secretariat

Key:

• Alignment delta (∆𝒊)The % difference between a

vessel's carbon intensity and the

decarbonization trajectory at the

same point in time: expressed as a

(+/-) %.


IMPACT ON FINANCIERS

Create alignment with our clients re

operational efficiency of vessels

Encourages greater transparency

and accountability re our activity

Enhanced risk management via

measurement of portfolio

More closely partner our clients in

new projects

Be a leader and bring innovative

solutions to our clients

Bring climate alignment into our

credit decisions


NEXT STEPS

Government intervention to

incentivize new investment

Create a market standard

Extend Scope to other Social

Factors

A benchmark for other industries

Lobby Asian banks, export credit

agencies and lessors

A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE...A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE...

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