Page 198 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΟΚΤΩΒΡΙΟΣ 2024

ΗΟRIZON FROM THE BRIDGE

Transparency and Comparability: The ESRS aims global trade association for shipowners representing
to ensure that companies provide stan- over 80% of the world merchant fleet, has launched
dardised and comparable ESG informa- its Carbon Intensity Indicator (CII) Data Collection
tion, allowing stakeholders to evaluate System.
their performance more easily. The CII is a rating system developed by the Inter-
Incorporating ESG considerations and complying national Maritime Organisation (IMO) to measure
with the CSRD and the ESRS can present chal- the energy efficiency of ships over 5,000 gross ton-
lenges, especially for companies unfamiliar with nage that trade internationally. It came into effect
sustainability reporting. However, the benefits far on 1 January 2023 and is currently in an experi-
outweigh the costs for the following reasons: ence-building phase, with a formal review running
Improved Access to Capital: Investors are increas- in parallel until 1 January 2026. During this period,
ingly factoring ESG criteria into their the IMO has invited interested Member States and
investment decisions. Companies with international organisations to collect data and sub-
strong ESG performance and transparent mit information and proposals for improvements
reporting are more likely to attract invest- to the CII system. The ICS wishes to engage con-
ment, especially from socially responsible structively with this process and invites ship owners
and institutional investors. and ship managers to submit data via forms for the
Risk Management: Companies with robust ESG reporting period.
practices are better equipped to antici- The International Association of Dry Cargo Ship-
pate and mitigate risks related to climate owners (INTERCARGO) has submitted proposals to
change, regulatory shifts, supply chain the IMO, calling for a review of the CII at the 82nd
disruptions, and reputational damage. session of the Marine Environment Protection Com-
Regulatory Compliance: With the introduction of mittee (MEPC 82), held between 30 September and
the CSRD and the ESRS, non-compliance 4 October at the IMO Headquarters in London.
is not an option. Companies that do not Drawing on extensive studies that analysed data
meet the reporting requirements could from over 5,600 bulk carriers, conducted in col-
face legal and financial penalties. laboration with three major classification societies
Brand and Reputation: Consumers and stakehold- – ABS, Bureau Veritas, and DNV – INTERCARGO
ers are more inclined to support busi- has highlighted several fundamental issues with
nesses that align with ethical and sustain- the current CII system:
able practices. Transparent ESG reporting Impact of idle time: The studies show a clear cor-
can build trust and enhance brand loyalty. relation between increased idle time and
Long-Term Value Creation: A focus on ESG is poorer CII ratings, particularly for smaller
increasingly seen as synonymous with vessel sizes. This idle time, which includes
long-term value creation. Companies that periods in port or at anchorage, is often
address environmental and social chal- beyond the vessel's control.
lenges are more likely to thrive in a rapidly Perverse incentives: The current CII framework may
changing business environment. inadvertently encourage ships to run their
ESG is no longer a “nice-to-have” component main engines unnecessarily – for example
of modern business strategy, but a critical one. when waiting at anchorage – potentially
Many shipping companies are still unaware that increasing overall emissions while improv-
they are part of the approximately 49,000 EU ing their CII rating.
companies that will have to comply with these new Inconsistent efficiency indicators: Vessels with
regulations in the near future. The system will be E ratings often have lower average CO2
deployed in four phases, starting in January 2024 emissions compared to those rated A to D,
for companies already reporting under the Non-Fi- suggesting that the CII does not accurately
nancial Reporting Directive (NFRD), before being reflect a vessel's true efficiency.
expanded to large companies the following year, Size-based disparities: Smaller bulk carriers, espe-
listed SMEs from 2026, and certain non-European cially in the Handysize and Supramax/
entities two years later. Ultramax segments, show a higher per-
The future of business lies in its ability to balance centage of D and E ratings compared to
profit with purpose, and ESG provides the frame- larger vessels.
work to do just that. In light of these findings, INTERCARGO has pro-
posed that the IMO:
INTERCARGO PROPOSES REVIEW OF THE • Review and adjust the CII to better reflect a
CURRENT CII vessel's true energy efficiency, rather than, by
The International Chamber of Shipping (ICS), the implication, reflecting the efficiency of a port

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