Sustainable shipping industry important to ABN AMRO
- Sustainability
ABN AMRO has a significant position in transport financing and has important clients who are active in the shipping industry. Together with these parties, ABN AMRO is working on sustainable change in this industry.
Sustainable shipbreaking is an important topic in this sector. In some countries, this is not done sustainably, which has far-reaching consequences for workers and the environment. Gust Biesbroeck, Head of Transportation: “Many aspects of shipbreaking in Bangladesh, India and Pakistan are dehumanising and are a disaster for the environment. Shipbreaking is one ofthe aspects of the international shipping industry that needs to be greatly improved.”
ABN AMRO does not finance in any way shipbreaking or trading in ships due for breaking. Only young ships are financed. Still, ABN AMRO clients may be involved in non-sustainable forms of shipbreaking because there are insufficient sustainable alternatives available. Shipbreaking is also a very important part of the economy of the countries where it is practiced. It is a sector-wide and international problem that requires internationallegislation and supervision. This, however, is a slow and difficult process.
That’s why ABN AMRO prefers encouraging the sector itself to come up with solutions. ABN AMRO is co-founder of the . It also works with the , an initiative that promotes and rewards sustainable business practices in theshipping industry.
Ships generally have an economic lifespan of 20 to 25 years. During this period, ownership often changes more than four times. Ship financing is usually paid off in 10 to 15 years. At the end of a ship’s lifespan, brokers become involved that sell ships to shipbreaking companies.This makes it contractually impossible to impose conditions for sustainable shipbreaking when a new ship is financed. Even with the best will in the world, a ship’s first owner can’t possibly take responsibility for the next owner, much less any subsequent owners or even the brokers focusing on shipbreaking. This is why shipbreaking is a problem across the whole sector. Not financing ships is not a realistic option or solution either, as the shipping industry is crucial for the worldwide transport of food and goods, and there are insufficient alternatives.
That’s why ABN AMRO and the industry believe investing in a sustainable shipping industry and shipbreaking is the solution.
The Fair Banking Guide has researched Dutch banks and their policies on sustainable shipbreaking. In this research, ABN AMRO scores a 3 out of 5 as a lender.