Stergios Stamopoulos, Manager, Houston Sustainability Center, American Bureau of Shipping (ABS), explains how the maritime industry can improve its sustainability credentials.

Over the past 40 years, the concept of sustainability has constantly been reshaping the way businesses operate with society, the economy and the environment. The increasing demand for environmental, social and governance (ESG) reporting across the marine industry has seen many shipowners and operators start to incorporate its criteria into their operations. Marine and offshore companies are being driven to incorporate ESG principles by regulators, internal or external stakeholders, or a combination of all three. As a result, many maritime organisations, irrespective of size, will make their sustainability report publicly available.

Publishing a sustainability report is the final step of a long journey that requires embracing and implementing ESG policies and procedures. They have to become part of your company’s DNA. We’ve engaged with lots of clients from around the world and we regularly get asked the same sorts of questions. How long will it take for us to get a sustainability report? Can you help us implement an ESG strategy? And our reply is always the same. Identify the gaps in your company, sort out what you need to change and implement processes that will get your staff and management to start thinking differently.

You’re already underway

Companies that have never thought about ESG are often already fulfilling parts of its remit; they just haven’t connected the dots. Most marine and offshore companies have been implementing ESG strategies for years (without even realising it) through reduced emissions, responsible water usage and disposal and research and development into renewable energy programmes.

The best way to start is to carry out a gap analysis, perhaps in partnership with an external consultant. You’d be surprised by the number of companies that are already linked to the principles and procedures of ESG without knowing it.

When we engage with clients, we suggest a three-year cycle. We have the starting year, the learning year and the maturity year. You need to collect data to create a baseline – you need to know where you’re starting. Only then can you develop a strategy about how to decarbonise or become more efficient. It's a journey.

Preparing for the future

Establishing quantifiable ESG commitments is increasingly a statutory requirement. Changes to regulations mean that companies – not just those listed on the stock exchange – will need to have accurate reporting procedures in place. And there are business implications, too.

Your customers will likely want to know about your ESG goals as part of any contract negotiations, while banks will need evidence of your sustainability objectives before loans are offered. Companies that are serious about the environmental, social and governance aspects of their operations will win business and unlock financial support.

Overall, the ESG-related procedures and performance evaluation criteria, the robustness of a company's governance mechanisms and its ability to effectively manage its environmental and social impacts, must be seen as management tools. They can all be used to manage risk and performance.

ABS has developed an ESG blueprint that explores market and institutional ESG drivers and details best practices for both the marine and offshore sectors. The insights provided in this report will help maritime decision-makers navigate the complex, dynamic world of ESG reporting.