Increasing shipping's sustainability
Shipping is a critical industry for commerce worldwide, delivering 90% of global trade. The ethos of sustainability is therefore important not only for the longevity and profitability of its operators, but for global economic development too.
Enter the Sustainable Shipping Initiative (SSI), a coalition of 15 companies and two NGOs determined to achieve commercial growth, sustainably.
The initiative was co-founded by Forum for the Future and the World Wildlife Fund. The SSI believes that shipping can become sustainable by 2040 and uses the breadth and scale of its membership to advocate and share sustainable business models, while setting an example through individual and collective action. The industry is complex and so needs solutions that span the full value chain, it argues.
The Guardian judges praised SSI as an outstanding example of “mobilising an entire industry sector”. Its work, they said, “is absolutely pioneering”.
All members claim to be leaders in the field and have sustainability ingrained in their everyday business: 70% report on sustainability and have it embedded in their strategies; two-thirds have carbon reduction targets; 60% publicly report their CO2 emissions; and half use sustainability criteria in procurement decisions, with most engaging their supply chains in their sustainability work.
In October 2014, members signed up to a commitment to report progress; link sustainability to core business strategy; set reduction targets on environmental issues; and deliver a positive impact on people and society. This kind of work, said the judges, would have been “foreign territory several years ago”.
The SSI and its members are demonstrating a clear link between sustainability and improved business performance.
Bunge, a global agribusiness, has saved thousands of metric tonnes of marine fuel by running 25% of its fleet at slower speeds since 2013. It is also exploring the creation of a global emissions index to inform industry decision-making and incentivise the building and use of more fuel-efficient ships.
Cargill, a food, agriculture and financial products and services provider, has committed to using the “rightship green rankings” system in its vessel selection process and will only charter those that meet high efficiency standards.
But there are barriers to change that are stifling progress says the SSI. These include regulatory pressures that challenge innovation and a lack of information about where in the supply chain sustainability benefits could be gained.
The SSI brings together commercial competitors in a way that is creating unprecedented levels of co-operation and collaboration to transform the industry, rather than achieve incremental gains for individual companies.
As well as pioneering its sustainable shipping ratings schemes – which provide the transparency needed to enable cargo owners, charterers and ship-owners to integrate sustainability considerations into commercial decisions and reward efficient carriers – the SSI has introduced a finance instrument for sustainable shipping called “save as you sail” (SAYS), and a closed-loop materials management model and tools.
SAYS shows the industry how it can benefit from efficiency upgrades, including a model that lays out how charterers, owners and financiers can derive improved return on investment and profits from more efficient vessels.
Using data from more than 96% of the materials used in two new vessels and a cruise ship cabin, the SSI has also tracked and traced shipbuilding materials and demonstrated potential for safer, cleaner and more profitable ship recycling; significant CO2 savings as a result of more effective recycling in the so-called “steel loop”; and CO2 and financial benefits from remanufacture and reuse.
The next steps, it says, will be to make sure individual members increase the rate at which best practice is shared and implemented; to increase dialogue, especially with customers and regulatory bodies; and more clearly map the route and rate of change needed to deliver its vision for 2040.
SSI is the 2015 winner of the innovation award in the consultancy of the year category of the Guardian Sustainable Business Awards.