Insurance industry joins global shipping decarbonization effort

Insurance industry - Shipping - Boats - marine

Leading marine insurers have joined a broader worldwide initiative to cut carbon emissions.

Top marine insurance industry companies have now entered into the growing initiative to help push forward the shipping world’s decarbonization.

The insurers plan to link their underwriting activities into global shipping’s carbon emissions cuts.

The insurance industry hopes that by making this move it will help to encourage the sector to go entirely green. In early November at the COP26 climate summit, countries including the United States pushed for the International Maritime Organization (IMO), the shipping agency of the United Nations, to adopt a 2050 zero greenhouse gas emissions target.

Marine insurers have signed up for “Poseidon Principles” in a commitment to conducting an assessment and disclosure of climate alignment of hull and machinery portfolios and to use them as a benchmark used for achieving IMO goals. The IMO’s target is for overall greenhouse gas emissions reductions of by half – 50 percent – from 2008’s levels by 2050. That said, it is facing rising pressure to commit to a 100 percent decarbonization goal by that year instead.

Insurance industry - global shipping industry reporting

The Poseidon Principles provide the insurance industry with a framework for credible progress reporting.

“The disclosure framework provided by the Poseidon Principles will enable us to credibly report our progress towards net-zero insurance using granular marine data,” said Swiss Re Corporate Solutions marine head Patrizia Kern. Gard marine insurer CEO Rolf Thore Roppestad went on to add that the “common goal is an accelerated move toward a decarbonized industry.”

Other insurers and reinsurers that are participating include SCOR, Hellenic Hull Management, Norwegian Hull Club, and Victor International. Willis Towers Watson the insurance broker, as well as the Cefor marine insurance association, and the EF Marine specialist underwriting agency have all joined this decarbonization initiative.

The Poseidon Principles were first used in 2019 when an initial group of leading banks signed up to environmental targets, committing to take account for their CO2 emission cutting strategies when providing loans to shipping companies. From there, the initiative has grown, particularly in recent months, and now the insurance industry has taken notice and have entered into their own commitments.

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