Report urges ship financiers to focus more on climate risk assessments

A report out this week urges ship financiers to move together in creating a global standard for maritime-specific climate risk assessments.

The report – Preparing shipping banks for climate change: How can internal carbon pricing help ship-financing banks in risk management? – was published by the Carbon Pricing Leadership Coalition and global NGO Carbon War Room

Also contained in the eight-page document are suggestions for shipping to consider methods such as internal carbon pricing whereby the future potential costs of investments are factored into the bottom-line as dollars per ton of CO2.

James Mitchell, finance lead at Carbon War Room’s Shipping Program, commented, “Ships are carbon-intensive assets designed with a life span of up to 30 years. A newbuild financed today will likely need to operate under a carbon price before its first five-year drydock, when modifications can be made. Yet today most lenders are making decisions without even factoring energy efficiency into lending decisions. By the end of its life span in 2050, that vessel could need to operate close to 90% more efficiently than when it was first delivered. We are working to ensure that the expertise of ship financiers is fully leveraged to enable and even accelerate the profitable decarbonisation of the shipping industry.”