11 banks sign Poseidon Principles for maritime shippers
July 2019—In our global marketplace, many products travel by sea but those carbon emissions aren’t assigned to any country. So Rocky Mountain Institute worked with banks, the main financiers of this industry, to develop the Poseidon Principles which will drive the shippers toward the goal of 50 percent reduction in greenhouse gases by 2050.
The Poseidon Principles establish a framework for assessing and disclosing the climate alignment of ship finance portfolios. In simple terms, climate alignment is defined as the degree to which the GHG emissions associated with a financial institution’s portfolio are in line with an ever-reducing trajectory to the IMO’s 2050 climate target. The design of the Principles makes this agreement far more than a typical voluntary disclosure agreement.
This is an interesting use of leverage. Rather than pressuring the shippers to take voluntary measures, they’ve gone to their source of money. And the framework aggregates the results, holding the industry accountable for meeting their goals.
As the first global, sector-wide, and self-governing climate alignment agreement among financial institutions, these principles redefine the role of banks in the maritime shipping sector and lay a clear path for the broader financial sector to make new, significant contributions to global decarbonization.