Views from the Sustainable Shipping Initiative

Shipping faces major global challenges: from a changing social and volatile economic context; to increased demand for transparency from customers through to investors; to the climate crisis and the need for rapid decarbonisation. These challenges, expected to profoundly affect shipping in the coming decades, present opportunities for positive impact across and beyond the shipping value chain – ranging from emissions reduction, to innovative sustainable financing models, to increased transparency and better employment opportunities.

The Sustainable Shipping Initiative (SSI) has spent the last decade working toward a sustainable maritime industry through cross-sectoral collaboration. Spanning the entire shipping value chain, SSI’s members are ambitious shipowners and charterers; ports; shipyards, marine product, equipment and service providers; banks, ship finance and insurance providers; classification societies; and sustainability non-profits. We believe that no single organisation can tackle shipping’s sustainability challenges alone, but every stakeholder has a role to play – whether as a shipowner ordering a vessel that runs on zero emission fuels; a bank financing research and development of new technologies; or a charterer working to ensure that its entire value chain is aligned with its social and environmental goals – collaboration is essential for success.

The Roadmap to a Sustainable Shipping Industry is a resource for stakeholders across the shipping value chain, offering practical guidance by setting out milestones to address present and future sustainability challenges. Through six vision areas encompassing different aspects of sustainable shipping, it provides a mechanism through which shipping stakeholders can direct efforts and review progress.

Three key issues of relevance to shipping today, where LDC can leverage its position and partner with others to advance sustainable practices are decarbonisation, seafarers’ labour and human rights, and transparent, responsible supply chains.

Decarbonisation

The momentum building within the decarbonisation space presents both a challenge and an opportunity for the shipping industry. On one hand, it has shown that shipping can rally and come together to solve a common issue, both through individual commitments and collective action such as the Sea Cargo Charter and Getting to Zero Coalition. At the same time, action has not come from a single group, but rather different groups – regulators such as the International Maritime Organization (IMO), cargo owners whose total value chain emissions are under scrutiny, financial stakeholders seeking to align their portfolios to the Paris Agreement goals, and others.

However, we should be wary of looking at decarbonisation through a lens focused primarily on lowering emissions during shipping operations. Lifecycle, well-to-wake emissions across the fuel supply chain are already familiar to LDC across its land-based supply chains, and there is a need to apply these principles to marine fuels and technologies, ensuring that we decarbonise not only rapidly, but sustainably.

Furthermore, sustainability issues for zero carbon fuels such as labour, social and human rights, land use change, safety and others need to be considered when researching, investing in and scaling up zero carbon fuels of the future. There is no silver bullet to decarbonise shipping. Fuel production is complex, and accounting for the well-to-wake emissions of marine fuel requires broad cross-sectoral collaboration – among others with charterers like LDC, able to take a leading role and leverage their understanding of land-based supply chains and marine transport.

Seafarers’ Rights

Tracking, addressing and mitigating human and labour rights risks throughout the supply chain is not new to LDC. However, there is a lack of clear guidance when it comes to seafarers and other shipping workers, and as charterers increasingly work to ensure sustainability throughout their supply chains, lessons learned on land must be applied to the vessels that transport their cargo.

The Covid-19 pandemic brought to the fore the labour and human rights risks faced by seafarers, many of whom remain stranded at sea due to crew change restrictions. But these risks are not new. Cases of vessel abandonment or arrest that leave crew onboard with no payment or regular food supply for months (or even years); recruitment fees; and weak enforcement and inspection regimes are all key concerns for seafarers’ rights.

Due to the nature of the industry, there can be significant distance between crew and vessel owners, charterers and operators, increasing vulnerabilities and reducing oversight. By holding itself and those it works with accountable, not only for the vessels carrying LDC’s cargo but for the labour and human rights of those onboard, LDC can lead the way by demanding and implementing human rights due diligence that addresses key issues such as inclusivity, fair employment terms, minimum crewing levels, crew wellbeing and mental health, among others.

Transparent, Responsible Supply Chains

To bring it all together, work to ensure sustainable and transparent supply chains needs to consider the vessels that carry LDC’s cargo, the fuel those vessels burn (and their production), the people working onboard and around the vessels, the seas and oceans they sail on, and many more factors.

Companies like LDC need to monitor and take action on a range of sustainability, governance and other issues across their supply chains. Their oversight and leverage in demanding responsible and sustainable behaviour, action and commitments from suppliers, partners and other industry players – both in the maritime and other sectors – should not be underestimated.

Engagement with initiatives that showcase demand for and commitment to transparency, such as the Ship Recycling Transparency Initiative, shows that LDC is able to connect the dots on sustainability, exploring areas of concern across social, environmental and governance factors beyond what is expected of charterers, and mitigating supply chain risks while driving sustainability in shipping.

In leading by example and inspiring others to act responsibly and proactively, LDC can leverage its leadership position to advance maritime sustainability – not only doing the right thing for itself, but influencing others to raise the bar across the industry.