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More banks pledge to align shipping lending to climate goals

As the green agenda takes centre stage, Michael Parker, head of shipping and logistics at Citi bank, says more lenders will be looking to join the Poseidon Principles

Parker, architect of the Poseidon Principles that launched in June last year, tells Marine Money that he expects a number of Asian lenders to join in a matter of months

BNP Paribas and Credit Suisse have been named as the latest leading financial institutions to sign up to the guidelines designed to accelerate decarbonisation efforts across shipping.

It means signatories of the Poseidon Principles now represent around $140bn in loans to international shipping — about 30% of the total global ship finance portfolio.

BNP Paribas, the world’s largest lender to global shipping, and wealth manager Credit Suisse bring the number of financial institutions to have signed up to the initiative to 16, with more expected to join, according to Michael Parker, architect of the Poseidon Principles and Citi bank’s head of shipping and logistics. 

Speaking at the Marine Money conference in London, Mr Parker said he expected up to 25 lenders to join the scheme by the end of the year. At its launch in June last year, 11 had signed up.

The Poseidon Principles aim to align the shipping portfolios of signatory banks with the International Maritime Organization’s emission reduction targets.

Mr Parker, who has been a shipping banker for three decades, said that Asian lenders such as China’s ICBC were also interested and could sign up in a matter of months.

He said the challenges of decarbonisation and digitalisation would change the shipping industry, and expected more consolidation, with “real institutional funding coming in”.

The climate agenda could be shipping’s greatest opportunity to consistently be profitable, he claimed.

Responding to a question, Mr Parker said he would like to be remembered as one of the people changing the industry for the better. 

So often a laggard, shipping this time “is leading from the front”, with policies designed to encourage responsible lending and responsible shipowners, he said in October.  

The Poseidon Principles are designed to impel shipowners to make at least a 50% reduction in greenhouse gases by 2050 and to help financial institutions in managing critical investment risks.

“The decision of BNP Paribas and Credit Suisse to sign on to the Poseidon Principles represents another milestone for responsible ship finance,” Mr Parker said in the statement. “We welcome their leadership and we encourage other serious financial institutions to join them in serving global seaborne trade in a sustainable manner.”

Other signatories include ABN Amro, Amsterdam Trade Bank, Crédit Agricole, CIB, Crédit Industriel et Commercial, Danish Ship Finance, Danske Bank, DNB, DVB, Export Credit Norway, ING, Nordea, Société Générale, and Sparebanken Vest.

The Poseidon Principles were developed by Citi, DNB, and Société Générale in collaboration with leading industry participants — AP Moller-Maersk, Cargill, Euronav, Lloyd’s Register, and law firm Watson Farley & Williams — with support from the Global Maritime Forum, Rocky Mountain Institute, and University College London Energy Institute.

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