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Marine insurers shoot for goal, adopt principles including targets for zero-lifecycle GHG emissions
15 December 2021
The Poseidon Principles for Marine Insurance establish a pioneering framework for assessing and disclosing the climate alignment of marine insurers hull and machinery portfolios.
With expert support from UMAS, six of the world’s leading marine insurers launch a ground-breaking initiative to provide transparency on carbon emissions and support the shipping industry’s transition to zero emissions.
Signatories to the Poseidon Principles for Marine Insurance commit to assessing and disclosing the climate alignment of their hull and machinery portfolios, and to benchmarking them against two trajectories: one linked to a 50% reduction of annual CO2 emissions by 2050 compared to 2008 – in line with the International Maritime Organization’s Initial GHG Strategy; and one linked to a 100% reduction of emissions by 2050. Furthermore, a third trajectory will be introduced to align the full decarbonization trajectory with zero-lifecycle GHG emissions in order to meet the ambition of net-zero commitments such as the NZIA, and to support a zero-emissions future for shipping.
Sophie Parker, Principal Consultant at UMAS who led the development of the Principles said:
“Signatories to the Poseidon Principles for Marine Insurance have set the bar high on their ambition, not only in terms of measuring the climate alignment of their portfolio relative to a 100% CO2 reduction goal by 2050 and aiming to align with the Paris Agreement in time, but also the scope of the global fleet that this new initiative would include. As most insurance portfolios include almost all vessels in the global fleet, this creates an opportunity for marine insurers to have a dialogue with a vast number of shipowners on their transition to adopting zero emissions ships in their fleets. Maintaining this close dialogue will also allow insurers to manage some of the risk that comes with insuring vessels running on new fuels”
The Poseidon Principles for Marine Insurance are founded on the methodology used in the Poseidon Principles for Financial Institutions and were developed in an effort spearheaded by leading marine insurers and industry stakeholders with expert support provided by the Global Maritime Forum, Swiss Re Institute, and UMAS. The International Union of Marine Insurers (IUMI) is a supporting partner.
UMAS is a sector focussed, commercial advisory service that draws upon the world leading expertise of the Shipping Team at UCL Energy Institute combined with the advisory and management system expertise of UMAS International Ltd.