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Bartlett academics co-develop green shipping framework for banks

Experts from The Bartlett, UCL’s Faculty of the Built Environment have played a key role in developing the first lending framework for shipping companies that integrates climate considerations.

UCL academics co-develop green shipping framework for banks

28 September 2022

Since the Paris Agreement came into being, shipping has faced a major challenge to align itself to a new low carbon global economy. Ship financiers, who provide loan finance for new-build ships, and charterers, who hire vessels, will play a vital role in the industry’s decarbonisation.   

To assess the climate transition risk, financiers and charterers need better information about their fleet’s performance, particularly in relation to their CO2 emissions and intensity. Run as a partnership project with other stakeholders, academics from UCL’s Energy Institute were tasked with developing a new financing framework.  

 The work has since led to the creation of the Poseidon Principles: ‘a global framework for assessing and disclosing the climate alignment of financial institutions' shipping portfolios.’ 

The Principles were developed by the Global Maritime Forum, with support from the Rocky Mountain Institute and UCL’s Shipping Group at the UCL Energy Institute. Twenty major banks, representing US$150bn in shipping finance, have so far signed up.  

UCL’s Dr Nishatabbas Rehmatulla, co-lead on the project, said: “Banks are now thinking about, and including, climate risks in their lending portfolios – something that was unheard of before,” said Nish. “This will lead to impact in terms of emissions from ships.” 

“Banks are now thinking about, and including, climate risks in their lending portfolios – something that was unheard of before,” said Nish. “This will lead to impact in terms of emissions from ships.”

The project was made possible with funding from the Engineering and Physical Sciences Research Council’s (EPSRC’s) Impact Acceleration Account, distributed by UCL Innovation & Enterprise.   

UCL were selected as partners thanks to the Faculty’s expertise in climate science and strong presence in the shipping industry relating to research and innovation. 

Two further Principles have now also been developed covering shipping insurers and customers.  

Read the full story on the UCL Innovation & Enterprise website

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