What is sustainability and why should we care
Viewed in the context of climate change, efforts to make maritime more efficient fall woefully short of expectations. The sector needs to embrace the practices of sustainability.
The last time shipping experienced a systemic disruption was in the mid-1960s when containerisation changed the way the logistics sector – and with it the maritime sector – worked. Shipping now needs to embrace another disruption, a Lloyd’s List-hosted Round table has concluded, and this time the driver is not efficiency but sustainability.
Practice and processes of sustainable shipping are, as yet, not understood by shipping’s leaders. The genesis of sustainability lay in Corporate Social Responsibility (CSR) which, although the intentions were in the right direction, mellowed into a tick-box exercise that focused more on brand reputation than on change. CSR evolved into environmental consciousness, whereby corporate departments attempted to align business practices with regulatory aspirations. Quality management in the 1990s was driven by ensuring processes were carried out in the right way, and while progress was made there was no requirement to lay down challenging time-determined targets.
What is now emerging as sustainability is motivated by neither brand awareness nor process correctness. Sustainability involves the alignment of maritime within the broader logistics sector in a way that seeks to minimise its impact on the environment. The context is an urgent need to mitigate climate change, the requirement is the rethinking of how the logistics business operates. Speakers touched on the simple, yet profound example of consumers’ desire to eat fresh fruit from the other side of the world whatever the time of year and with little regard to the cost to the environment of fulfilling such a desire.
The only way Chilean cherries can be eaten in China or California at little more than the cost of production is if the expense of shipping them over long distances is retained by the transport chain and not passed on to the consumer. That business model must be challenged if shipping is to embrace sustainability. So far, the solutions offered by hundreds of technology companies would reduce the consumption of fuel by one or two percentage points or co-ordinate different elements of the supply chain to squeeze out a little more. Speakers were agreed that the way the developed world consumes products and services is not sustainable, and it has underpinned a logistics business that is itself not sustainable.
There are signals that progressives in maritime have recognised the need for systemic rather than incremental change. Consumers, especially the Millennial generation, are altering their purchasing behaviour. Within maritime, collaboration between port authorities and terminal operators, rail and trucking businesses is beginning to deal with the inefficiencies of the supply chain. Technology providers are understanding that they can only be part of a solution and need to work across the value chain to meet sustainable goals. Sustainability is no longer regarded as focused on carbon and fuels: it has become a mindset issue, requiring education at every level of society.
Yet even this presents problems. Stakeholders in shipping businesses demand that a level of profitability is delivered quarter after quarter, however this does not support long-term planning that would bring sustainable policies a decade or more in the future. Academics in particular are seeking understand the drivers of change but sometimes lack the base-line data needed to measure improvement. Often this data is not being shared because there are negative reactions if progress is slow. Meanwhile consumers who might be willing to pay a little more to have their products carried on ships operated by sustainable companies find their request for greater transparency turned down for commercial reasons.
It was agreed that the obstacles on the road to sustainable shipping should be better understood and dealt with as part of a rethinking of the maritime business model. If shipping is not proactive, one speaker said, “other factors could change shipping in a way that is not optimal or desirable.”
Sustainability, therefore, involves systemic change within maritime. It must be embraced at all levels of the business and drive business decisions. It is not a tweaking of what has been done in past decades nor should it be considered as a mechanism to boost profitability. It is a change of mindset more easily accepted by the young, and for this reason is likely to be a factor in recruitment. Millennials seek openness and transparency, and want to be part of a sustainable solution. They are not attracted by the concept of digitalisation, they are more likely to care about the environmental cost of transportation, and they seek to be persuaded by a strategic plan for sustainability that stretches 30 or 40 years ahead.
Shipping continues to be focused around the ship for all economic purposes. Speakers believed this is unsustainable. In future, the focus will be on shipping’s role in enabling sustainable societies, and its willingness to take responsibility for decisions and actions that have an impact on the environment.
The obstacles to a strategy of sustainability remain disconcertingly high. This Round table left many questions unanswered, often non-maritime in nature. Would consumers be willing to take on significantly greater share of the cost of the supply chain? Would developing economies push for lifestyle choices enjoyed for so long by developed economies? Would stakeholders agree to postpone their returns on investment in favour of knowing they are helping to drive systemic change? Nevertheless, the context of climate change demands “controlled urgency”, the leveraging of maritime’s “enormous innovative capacity”, and a change of mindset that sets long-term goals driven by a commitment to all-embracing sustainability.
Practice and processes of sustainable shipping are, as yet, not understood by shipping’s leaders. The genesis of sustainability lay in Corporate Social Responsibility (CSR) which, although the intentions were in the right direction, mellowed into a tick-box exercise that focused more on brand reputation than on change. CSR evolved into environmental consciousness, whereby corporate departments attempted to align business practices with regulatory aspirations. Quality management in the 1990s was driven by ensuring processes were carried out in the right way, and while progress was made there was no requirement to lay down challenging time-determined targets.
What is now emerging as sustainability is motivated by neither brand awareness nor process correctness. Sustainability involves the alignment of maritime within the broader logistics sector in a way that seeks to minimise its impact on the environment. The context is an urgent need to mitigate climate change, the requirement is the rethinking of how the logistics business operates. Speakers touched on the simple, yet profound example of consumers’ desire to eat fresh fruit from the other side of the world whatever the time of year and with little regard to the cost to the environment of fulfilling such a desire.
The only way Chilean cherries can be eaten in China or California at little more than the cost of production is if the expense of shipping them over long distances is retained by the transport chain and not passed on to the consumer. That business model must be challenged if shipping is to embrace sustainability. So far, the solutions offered by hundreds of technology companies would reduce the consumption of fuel by one or two percentage points or co-ordinate different elements of the supply chain to squeeze out a little more. Speakers were agreed that the way the developed world consumes products and services is not sustainable, and it has underpinned a logistics business that is itself not sustainable.
There are signals that progressives in maritime have recognised the need for systemic rather than incremental change. Consumers, especially the Millennial generation, are altering their purchasing behaviour. Within maritime, collaboration between port authorities and terminal operators, rail and trucking businesses is beginning to deal with the inefficiencies of the supply chain. Technology providers are understanding that they can only be part of a solution and need to work across the value chain to meet sustainable goals. Sustainability is no longer regarded as focused on carbon and fuels: it has become a mindset issue, requiring education at every level of society.
Yet even this presents problems. Stakeholders in shipping businesses demand that a level of profitability is delivered quarter after quarter, however this does not support long-term planning that would bring sustainable policies a decade or more in the future. Academics in particular are seeking understand the drivers of change but sometimes lack the base-line data needed to measure improvement. Often this data is not being shared because there are negative reactions if progress is slow. Meanwhile consumers who might be willing to pay a little more to have their products carried on ships operated by sustainable companies find their request for greater transparency turned down for commercial reasons.
It was agreed that the obstacles on the road to sustainable shipping should be better understood and dealt with as part of a rethinking of the maritime business model. If shipping is not proactive, one speaker said, “other factors could change shipping in a way that is not optimal or desirable.”
Sustainability, therefore, involves systemic change within maritime. It must be embraced at all levels of the business and drive business decisions. It is not a tweaking of what has been done in past decades nor should it be considered as a mechanism to boost profitability. It is a change of mindset more easily accepted by the young, and for this reason is likely to be a factor in recruitment. Millennials seek openness and transparency, and want to be part of a sustainable solution. They are not attracted by the concept of digitalisation, they are more likely to care about the environmental cost of transportation, and they seek to be persuaded by a strategic plan for sustainability that stretches 30 or 40 years ahead.
Shipping continues to be focused around the ship for all economic purposes. Speakers believed this is unsustainable. In future, the focus will be on shipping’s role in enabling sustainable societies, and its willingness to take responsibility for decisions and actions that have an impact on the environment.
The obstacles to a strategy of sustainability remain disconcertingly high. This Round table left many questions unanswered, often non-maritime in nature. Would consumers be willing to take on significantly greater share of the cost of the supply chain? Would developing economies push for lifestyle choices enjoyed for so long by developed economies? Would stakeholders agree to postpone their returns on investment in favour of knowing they are helping to drive systemic change? Nevertheless, the context of climate change demands “controlled urgency”, the leveraging of maritime’s “enormous innovative capacity”, and a change of mindset that sets long-term goals driven by a commitment to all-embracing sustainability.