A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE HOW DID THE - - PowerPoint PPT Presentation

A GLOBAL FRAMEWORK FOR RESPONSIBLE SHIP FINANCE

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

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HOW DID THE POSEIDON PRINCIPLES COME TO BE?

Poseidon Principles

Financial Initiatives Shipping sector commitments

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PRINCIPLE 1 – ASSESSMENT OF CLIMATE ALIGNMENT

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

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PRINCIPLE 2 – ACCOUNTABILITY

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

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PRINCIPLE 3 – ENFORCEMENT

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

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PRINCIPLE 4 – TRANSPARENCY

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

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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

• f the [Owner], on or before [31st July] in each calendar year, supply
• r procure the supply to [the Facility Agent] [such Lender] of all

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

• bligations 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

• f

the [Owner]/[.For the avoidance

• f

doubt, such information shall be [“Confidential Information”][“Information”] for the purposes

• f

[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”

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EXAMPLE OF DISCLOSURE REQUIREMENT SUBMISSION

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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 (∆𝒋)

The % difference between a vessel's carbon intensity and the decarbonization trajectory at the same point in time: expressed as a (+/-) %.

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IMPACT ON FINANCIERS

Create alignment with our clients re

• perational 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

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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