How the bank is making shipping more sustainable

A sustainable strategy while financing shipping Watch the video

The shipping industry has been vital to growth of the global economy for centuries. Did you know that 90 per cent of everything you buy has been shipped in a sea container? Shipping is a complicated world with various contradictions. One of the ways ABN AMRO is getting a grip on how this complex sector works is by imposing strict sustainability requirements on the financing of sea vessels. This way you can be sure that the products you buy, and are shipped in vessels that we finance, are transported responsibly. 

So how much pollution does shipping produce?

Sea shipping is one of the most economical ways of transporting goods around the world. At the same time, ships cause a lot of air pollution. The amount of energy required to move a container from Shanghai to Rotterdam by ship is far less than it is by road or air. However, given the large number of vessels that transport goods around the world,  the total amount of carbon dioxide being emitted is huge. That’s why the members of the International Maritime Organisation (IMO) agreed in 2018 to halve their carbon output compared with emissions in 2008.

In addition to carbon dioxide, ships emit nitrogen and sulphur. This air pollution is a large, acknowledged problem caused by the shipping industry. Sea vessels in particular still use environmentally-unfriendly oil as fuel. Whereas car fuel in the Netherlands is only allowed to contain very small amounts of sulphur, to avoid acid rain, this limit is more than one thousand times higher for sea vessels. Consequently, the world fleet of around 90,000 ships produces significantly more sulphur than the approximately one billion cars driving around in the world. 

What about human rights on board?

Shipping is sometimes a rough business to be in for the industry’s more than 1.5 million employees. Working conditions on board vary greatly between companies. In addition to good, healthy food, access to the internet is at the top of many seafarers’ wish list. Did you know that only slightly more than 10 per cent of all ship workers have access to the internet on board? This means they have little contact with family and friends while at sea.

Ship demolition is also a problem, isn't it?

Ship demolition is also a tricky issue. Far too often, ships are demolished on beaches under dangerous circumstances instead of being taken to certified shipyard for demolition and dismantling. Ships are made of large amounts of steel, which can be re-used after being recycled. This sounds like a good example of the circular economy – but the problem here is the differences in working conditions at the various demolition companies. To address this issue, ABN AMRO and ING, NIBC and a number of Scandinavian banks set up the Responsible Ship Recycling Standards (RSRS) in 2017. 

We know that some shipping companies have old sea vessels demolished on beaches in South Asia. Workers are often exposed to toxic substances such as asbestos and heavy metals, sometimes resulting in injury and even death. Whenever we finance a new ship, we include a provision in the contract stating that the owner commits to responsible recycling, stressing in particular safety and the prevention of damage to the environment.

Can our bank accelerate the process of improving sustainability in the shipping industry?

ABN AMRO has clear sustainability rules for the financing of all types of shipping, which go far beyond international requirements. For example, we require ship owners to draw up a sustainability policy regarding the environment and human rights which guarantees risk management in the areas of the environment, safety and decent payment of their workforce. Frontrunners in the sector also participate in initiatives such as the Sustainable Shipping Initiative and the Clean Cargo Working Group.

What can you do to help the shipping industry become more sustainable?

There’s no quality mark for products that have been transported by clean sea vessels. But bringing products to Europe by air produces far higher carbon emissions than transport by sea. You can choose to buy local, seasonal products, such as locally grown vegetables and fruit requiring a minimum of transport. Reducing consumption helps too, of course. If you work in logistics within the transport industry, you can – like the bank – ask your suppliers to present their sustainability policy before selecting a transporter.

Would you like to know what else we do to build a sustainable, better world?

Check out our sustainability page.

Jan Raes

Jan Raes

Sustainability Advisor

Jan.Raes@nl.abnamro.com +31 (0)20 383 1753