Banks to disclose climate alignment of shipping portfolios with IMO’s strategy of 50% emissions reduction by 2050.

By Paul A. Davies and Michael D. Green

On June 18, 2019, a group of 11 banks — including Citi, Societe Generale, DNB, Citigroup, ABN Amro, and ING — announced the adoption of the Poseidon Principles (PPs). The PPs are accompanied by a framework for integrating climate considerations into shipping investment decisions and for assessing how well a portfolio aligns with the International Maritime Organization’s (IMO’s) Initial Greenhouse Gas Reduction Strategy, which aims to reduce total greenhouse gas (GHG) emissions by at least 50% by 2050 based on 2008 levels. This blog post will explore the four key principles established in the PPs, covering climate alignment, accountability, enforcement, and transparency.

Poseidon Principles Association and Poseidon Principles

The PPs governing body, the Poseidon Principles Association (PPA), was formed on June 18, 2019. The PPA is responsible for the management, administration, and development of the PPs. The PPA is supported by the Rocky Mountain Institute (an independent non-profit organization aiming to accelerate the adoption of a shift to greater efficiency and more use of renewables), the University College London Energy Institute, and Lloyd’s Register. The PPA is committed to improving the role of maritime finance in addressing global environmental issues, spearheaded by the PPs.

The Initial Strategy provides the first global climate framework for the shipping sector and will support Paris Agreement targets.

By Paul Davies, Janice Schneider, and Eun-Kyung Lee


In April 2018, the Marine Environmental Protection Committee of the International Maritime Organization (IMO) adopted an initial strategy to reduce greenhouse gas (GHG) emissions in international shipping (Initial Strategy). The IMO is a United Nations agency with responsibility for the safety and security of shipping and the prevention of marine pollution from ships. The Initial Strategy represents the first global climate framework for shipping. In tangible terms, IMO aims to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008 levels, while simultaneously planning to phase GHG emissions out entirely.

Initial Strategy aims and measures

The Initial Strategy consists of (i) a framework for Member States outlining guidelines for the international shipping industry in the future and (ii) short- mid- or long-term measures to reduce GHG emissions. For this purpose, the Initial Strategy determines several “levels of ambition” for the international shipping sector. Levels of ambition directing the Initial Strategy are as follows:

  • Carbon intensity of ships to decline through implementing further phases of the energy efficiency design index (EEDI) for new ships
  • Carbon intensity of international shipping to decline — including reducing CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008
  • GHG emissions from international shipping to peak and decline