Japan’s leading banks have joined the initiative aimed at financing shipping to reduce carbon dioxide emissions, as the sector accelerates its efforts to go green.
In recent weeks, Shinsei Bank Ltd, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Finance; Leasing, and MUFG Bank have signed up to the plan, the banks said.
With about 90% of global trade transported by sea, global shipping accounts for nearly 3% of global CO2 emissions.
In 2019, a group of leading banks signed up to environmental commitments known as the “Poseidon Principles,” whereby financiers would take into account efforts to reduce CO2 emissions when lending to shipping companies.
Japan is one of the world’s leading maritime centers, especially in shipbuilding.
By adhering to this plan, MUFG Bank recently stated that it will “contribute to the sustainability of the maritime sector.”
Sumitomo Mitsui Trust Bank was the first Asian lender to join in March last year.
There are now 24 institutions participating, including other major industry players such as Citi and Societe Generale . Their ship lending portfolios represent some $175 billion, almost 50% of global ship finance.
The principles establish a common baseline for assessing whether loan portfolios are in line with or behind climate targets set by the UN maritime agency, the International Maritime Organization (IMO).
The IMO aims to reduce the industry’s greenhouse gas emissions by 50% from 2008 levels by 2050, a goal that will require the rapid development of zero- or low-emission fuels and new ship designs with cleaner technology.
Michael Parker, chairman of the Poseidon Principles Association, was optimistic that other Asian lenders will join this year.
“The other important driver will be (the UN summit) COP26 in Glasgow, where we expect the shipping sector…to draw the attention of world leaders to the progress the industry has made,” said Parker, who is also president of Citi’s global shipping, logistics and offshore business.
