Page 22: of Marine News Magazine (February 2023)

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Propulsion and technical shore staff on a nearly daily basis in order to (ESG) has made its way into shipping from the investment con? rm a safe, ef? cient and pro? table ship operation. The community. It is a subjective rating system that evaluates a same decision process is completed in ship construction. shipping company’s policies and operations based on con-

We have been through more than six “ECO” generations forming to a mix of parameters. In addition to the actual reg- in the tanker market. ulatory requirements in place, the mix is not consistent from

Hull designs and capacity have been improved. Engines one jurisdiction or evaluator to another. As with many other have been further improved. Coating manufacturers have industries, reputations and competitiveness can be impacted continued to develop hull applications to reduce fouling by ratings de? ned as “leaders”, “average” and “laggard”. and in turn fuel consumption. We have even installed In shipping, the number of companies obtaining ESG

LED lighting not only to reduce energy but also save costs ratings is on the rise. In addition to the risks of making of constantly replacing incandescent bulbs. Many in the long-term capital commitments, the added costs and op- industry have reacted and addressed “emissions” without erational limitations that arise from ESG-driven require- the need of a CII, and all of those actions have been within ments (all of which are rarely discussed by proponents) environmental compliance. Simply put, actions to main- have resulted in further escalated risks, often negatively tain industry sustainability have been in place with the In- impacting investments. The reality is that ESG analysis or ternational Safety Management (ISM) Code. rating as an investment evaluation tool has not been very

ISM was adopted in 1994 as part of the SOLAS Con- successful. Simply stated, hull design, propulsion technol- vention to provide a means to con? rm operators were ogies and fuel-choices that can actually be the basis for a meeting standards similar to CII. A controversial piece of very long-term investment such as a ship are not in clear legislation established to abolish substandard ships and op- view. Suf? ce to say your business success reaches far be- erators with the inspections, surveys documents and ISM yond environmental compliance with sustainability capa- systems have been in place for nearly 30 years. With all of bility well beyond climate change emissions. that survey and documentation, do we now need a CII to We have been working with a fund that has followed “rate” an operation? Has ISM failed us, or do EEXI and a different investment analysis: economic, sustainable and

CII ratings lead to a ? nancial model base rather than a deployable (ESD). The environmental factor is analyzed in safety and environmental one? the sustainability goal, and the actual project or investment

The term environment, sustainability and governance must be both economically justi? able and the technology © RobertCoy / Adobe Stock 22 | MN February 2023