Prompted by the continued growth of climate transparency from financial institutions, the global finance portfolio for shipping has moved closer to alignment with ambitious decarbonization trajectories set by the International Maritime Organization (IMO), aiming to remove emissions from international shipping by 2050.
The new insights have been revealed in The Poseidon Principles’ fifth Annual Disclosure Report, which showcases the climate alignment of 35 major financial institutions across 14 countries , representing nearly 80% of the global ship finance portfolio .
The Poseidon Principles is a global framework for financial institutions to assess and disclose the climate alignment of their shipping portfolios, aiming to promote decarbonization in the maritime industry. This year’s report, which also marks the fifth anniversary of the Poseidon Principles, highlights the transformative progress achieved since its launch in 2019 when it became the world’s first sector-specific framework for measuring and reporting climate alignment in shipping finance.
Key findings from the 2024 Annual Disclosure Report include:
“The Poseidon Principles have redefined what is possible in transparent climate reporting for the shipping industry,” Michael Parker , Poseidon Principles Chair and Chairman of Global Shipping & Logistics, Citi, commented.
“As we celebrate the fifth anniversary of this initiative, we recognise both the progress made and the opportunities ahead – this milestone shows how far we have come in five years, but also serves as a reminder that we are now five years closer to critical decarbonisation targets for 2030, 2040, and 2050. We must accelerate efforts, addressing key areas of misalignment and ensuring collective ambition turns into transformative action.”
By integrating real emissions data into financial decision-making, the framework has also enabled signatories to use climate alignment scores to shape financing decisions, guide sustainability-linked lending, and support investment in green technologies such as biofuels and alternative propulsion systems . Increased transparency has also fostered closer collaboration between financial institutions and shipowners, reinforcing a shared commitment to decarbonization.
While celebrating significant progress, the report also acknowledged the challenges of aligning with IMO’s ambitious roadmap.
“We have much to celebrate in this annual disclosure report, especially in terms of increasing levels of transparency,” Paul Taylor , Vice Chair of the Poseidon Principles and Global Head of Maritime Industries, Societe Generale, noted.
“However, alignment with 2050 net zero goals remains a challenge, in particular for certain vessel types that are facing operational complexities. Now, the Poseidon Principles’ adoption of well- to-wake emissions reporting offers a robust foundation for addressing these challenges head on. The Poseidon Principles will continue to evolve, setting new benchmarks for transparency and commitment to a sustainable future.”
In 2023, the Poseidon Principles adopted well-to-wake emissions reporting, encompassing full lifecycle emissions of fuels and setting a new benchmark for climate reporting in line with the latest climate science and supporting the IMO’s latest ambition.
In just five years, the Poseidon Principles have set the global standard for climate transparency in ship finance and inspired other financial disclosure initiatives like the Sustainable STEEL Principles for steel financing, the Sustainable Aluminium Finance Framework for aluminium financing, and the Pegasus Guidelines for aviation financing.
In 2022, the Poseidon Principles for Marine Insurance also entered into force, providing a carbon reporting standard for insurers in the shipping industry.