DNV is supporting ship financing banks and funds in their mission to decarbonize their portfolios
Poseidon Principles offer a yardstick by which leading ship-financing institutions demonstrate their commitment to reduce the greenhouse gas impact of the fleets they finance. Poseidon Principles:
- create awareness of the GHG impact of the lending decisions taken
- provide a common target for the intended annual improvement
- underline the commitment of the ship finance community to global GHG reduction targets
The Poseidon Principles reflect the ambitions of the IMO to reduce shipping’s total annual GHG emissions to net zero by 2050.
DNV’s Maritime Advisory experts provide related services to financial institutions.
Poseidon Principles reporting – efficient and reliable
Poseidon Principles signatories aim for efficiency in data collection and processing in course of their reporting obligations. And the results need to be audit-proof. Both is safeguarded if DNV Maritime Advisory supports its clients. In 2023 we served 12 ship financing banks and 2 maritime insurance providers in their Poseidon Principles reporting. We build on our experience from working with the Poseidon Principles since 2019 and leverage DNV’s unique position as number 1 verifier of consumption and emission data in course of IMO DCS and EU MRV for more than 7.500 vessels per year.
The data sets for these ships can be leveraged for the Poseidon Principles reporting if the ship owner/manager consents. For some banks this applies to more than 50% of the vessels financed. Alternatively, for non DNV verified vessels, we offer a convenient and safe solution. “Poseidon for Signatories”, our software solution for data collection, storage, processing and preparation of the reports is accessible via our Veracity data platform.
From data to insight – supporting decision making
While data collection and reporting are the foundation, IMO DCS data can provide valuable insights to the financier:
- What gaps will need to be closed by individual vessels and owners?
- What measures could be suitable to close the gaps going forward? What might be the capital requirement?
- Who is taking an active position towards the increasing decarbonization challenge?
- And looking ahead: Will financing of this particular vessel rather strengthen or weaken my bank’s Poseidon Principles portfolio climate alignment over the coming years.
These are typical questions we help ship financing banks with in the context of Poseidon Principles. Beyond that, our advisory experts work for ship financing institutions in many related aspects of green finance, e.g.
- Development of decarbonization targets and strategies
- Development of methodology and criteria for new financing decisions
- Development of environmental indicators for ship financing
- Review of criteria and KPIs for green and sustainability-linked financing
- Annual emission reporting
NZBA target setting – 1.5°C Initiative of ship financing banks
Most ship financing banks are also members of the Net-Zero Banking Alliance (NZBA) and need to set their decarbonization targets these days. DNV Maritime Advisory has supported the 1.5°C Initiative of ship financing banks, comprising a combined maritime lending volume of more than 85 bn USD, in developing ambitious and NZBA compliant trajectories, yet realistic enough that banks and ship owners buy in to them. The trajectories have been developed bottom-up based on verified IMO DCS data of 9,350 vessels for the years 2020, 2021 and 2022, considering a wide range of technical and operational measures as well as alternative fuels and ultimately result in equal ambition levels across segments.