This report is released ahead of a key IMO meeting on GHG Emissions from Ships in London commencing Oct 23rd.
This report reveals how the shipping industry has aggressively lobbied the UN to obstruct climate change action for shipping, ensuring it remains the only sector in the world not currently subject to any emission reduction measures.
Despite being responsible for close to 3% of global greenhouse gas emissions, the shipping sector remains outside of the UN Paris Climate Agreement. A 2015 European Parliament report estimated that shipping could be responsible for 17% of global greenhouse gas emissions by 2050 if left unregulated, potentially jeopardizing global ambitions set out under the Paris Agreement.
Progress on regulation has been stalled by powerful shipping trade associations, with the International Chamber of Shipping (ICS) leading efforts to oppose action on climate change at the IMO. ICS, alongside BIMCO and the World Shipping Council, have collectively lobbied to delay implementation of any climate regulations until 2023 - even then refusing to support anything but voluntary regulations that may not reduce the sector's overall greenhouse emissions.
This research has further uncovered that at the most recent IMO environmental committee meeting 31% of nations were represented in part by direct business interests. The IMO appears to be the only UN agency to allow such extensive corporate representation in the policy-making process.
This research shows conclusively how the shipping sector is maintaining its business model regarding carbon emissions by capturing the regulatory process. The shipping sector's lack of disclosure contrasts with increasing investor expectations of more such disclosure as exhibited by the FSB's TCFD recommendations on climate risk. Future policy shifts are impossible to predict and investors in the shipping sector should query exposed companies they own as to what they are doing to manage climate risk behind the shroud of opacity currently in place.
A key exception to this is market leader AP Moller-Maersk, which transparently discloses on its climate policy positions, appearing to support ambitious action on climate. Other progressive corporate voices in the sector have also recognized the need for a more ambitious stance on climate policy. Maersk has been joined recently by companies such as Sweden's Stena Line and national trade associations from Scandinavia that appear supportive of action to decarbonize the shipping industry. Such actors suggest potential for a future coalition of progressive voices in shipping to promote greater corporate climate policy disclosure and action on climate at the IMO.