Financers pressure shipping industry to clean up its recycling practices
Banks, pension funds and other financial institutions are increasingly asked to take into account social, environmental and governance criteria when selecting asset values or clients. Investing with an eye to environmental or social issues, not just financial returns, is in demand, and the credit providers and investors of shipping are now actively taking a closer look at how they might contribute to a shift towards better ship recycling practices off the beach.
Through what is known as “negative screening”, investors are using the annual lists that the Platform publishes on global dumpers to screen their portfolio. In 2018, Scandinavian pension funds the Norwegian Government Pension Fund Global and KLP divested from four shipping companies due to their beaching practices. The exclusions were made public and with written explanations. Both the breach of international human rights and the severe environmental damage caused by beaching were highlighted as reasons for the divestments.
Banks play a crucial role in supporting economic activity through their lending. They can also influence better business practices through engaging with their clients on social, environmental and governance matters. Starting off as a Dutch bank initiative with NIBC, ING and ABN AMRO as founding members, large Scandinavian and German shipping banks are now also part of a group of banks that promote responsible ship recycling and negotiate clauses to that aim in the loan agreements they sign with shipping companies.
The financers of shipping have signaled that there are likely further exclusions to come. In light of the announced decommissioning in the oil and gas sector, it is further likely that investments in oil and gas assets will be also scrutinized.
RECOMMENDED READINGS
Latest News
Press Release – Norwegian Altera Infrastructure fined for beaching two ships in India
Økokrim issued a fine of NOK 8 million on 10 June to shipping company Altera Infrastructure for having sold two vessels for scrapping India.
... Read MorePress Release – Seatrade reaches settlement with Dutch Public Prosecution Service
Dutch ship owner Seatrade has reached a settlement with the Dutch Public Prosecution Service following the illegal export of four ships to India, Bangladesh, and Turkey for… Read More
Platform News – CirclesOfLife leads the charge toward sustainable shipyard practices
Comprising members from shipyards, industry associations, civil society organizations, academia, and classification societies, CirclesOfLife is a consortium committed to driving progress toward circular, zero-impact shipping through collaborative efforts.
... Read MoreRelated news
Press Release – Turning point: new tech and developments for a new future of ship recycling presented at the Lab
Stakeholders that are pioneering a new future for sustainable ship recycling gathered in Rotterdam at the NGO Shipbreaking Platform’s Ship Recycling Lab.
... Read MorePress Release – Platform publishes list of ships dismantled worldwide in 2019
674 large ocean-going commercial vessels were sold to the scrap yards in 2019. Of these vessels, 469 were broken down on tidal mudflats in South Asia.
... Read MorePress Release – NGOs release new report on North Sea oil and gas recycling
The NGO Shipbreaking Platform released today a report on offshore decommissioning during a seminar held in Oslo, Norway.
... Read MorePlatform News – REMINDER: Ship Recycling Lab on 20-21 September in Rotterdam
The NGO Shipbreaking Platform invites you to attend the conference Ship Recycling Lab on 20-21 September in Rotterdam (Netherlands).
... Read More2nd Ship Recycling Lab
2nd Edition of the Ship Recycling Lab to take place in Lisbon on 9-10 October 2024.
... Read MorePlatform News – Norwegian pension funds turn their attention towards Indian shipbreaking practices
Last week the Council on Ethics of the Norwegian oil pension fund (Government Pension Fund Global) announced that it will turn its attention towards Indian shipbreaking practices…. Read More