Named after the god of the sea in Greek mythology, the framework ties shipping finance to climate goals that are in line with the revised shipping target of the IMO, a United Nations agency responsible for regulating shipping globally. The 36 members who have signed up to the framework together represent 80 percent of the world’s total loan portfolio for shipping.
Under the framework, funders calculate vessels’ carbon intensity and disclose the results of annual assessments of the climate alignment of their shipping finance portfolios. This year, the report showed that the banks’ climate alignment score went from being 19 per cent misaligned last year to 11.7 per cent misaligned against the IMO’s minimum ambition to reduce greenhouse gas emissions from international shipping by 20 per cent in 2030, 70 per cent in 2040, and reach net zero by or around 2050.
The IMO’s “striving trajectory” refers to the upper ambition levels in its revised strategy, with checkpoints of at least 30 per cent reduction by 2030 and 80 per cent by 2040, from 2008 levels.
Global banks also chose to disclose additional climate alignment scores for cargo and passenger vessels, with lenders reporting their financing of ships that have emissions intensity that match or fall below decarbonisation trajectories supporting the IMO’s emissions goal.
The chart illustrates the average performance of all signatories’ portfolios in 2024 relative to the trajectories consistent with the 2023 IMO GHG Strategy’s minimum and striving ambitions. Image: Poseidon Principles
Japan’s largest bank, MUFG, disclosed a climate alignment score of 10.1 per cent. One of the means for achieving this was applying a size cap of 100,000 cubic meters for gas carriers that they finance, according to the report.
Smaller ships improve emissions reduction by optimising efficiency on specfic trades and reducing excess capacity that leads to higher fuel burn per tonne of cargo.
“Although our overall scores are still above the IMO’s decarbonisation trajectory, the gap is narrowing, reflecting the effectiveness of our collaborative approach and focus on data quality,” said MUFG in the report.
MUFG is also studying how shuttle tankers, which follow traditional designs that burn heavy fuel, affect their low-carbon efforts. The bank said it is seeking “ongoing dialogue” with its clients and the need for “tailored financing solutions.”
Meanwhile, Singapore’s OCBC’s alignment score is 0.01 per cent, indicating that it is very closely aligned to the IMO’s minimum trajectories. The score serves as an indicator of progress year-on-year, rather than proof of completed decarbonisation, which is only expected by 2050, noted OCBC.
OCBC, also Southeast Asia’s second largest bank, achieved its score by applying a carbon intensity indicator (CII) to measure the energy efficiency of its shuttle tankers. The bank also backed clients that invested in dual-fuel vessels, which reduce emissions by enabling ships to run on cleaner fuels now and transition to zero or near-zero emission fuels later.
As IMO’s strategy anticipates most emissions cuts in 2050 to come from alternative fuels, dual-fuel designs future‑proof newbuilds to use bio-liquified natural gas, e-methanol, ammonia or other low carbon fuels as they scale, avoiding lock‑in to high-carbon engines.
“This progress is a reflection of our clients’ priorities in reducing emissions in their operations as well as investing in more efficient dual-fuel vessels,” said OCBC in the study.
Shipping is one of OCBC’s priority sectors for decarbonisation, along with power, oil & gas, real estate, steel, aviation which comprise more than 40 per cent of the bank’s corporate and commercial banking loan portfolio, based on its sustainability report in 2024.
The shipping industry plays a critical role in the global economy as it is responsible for an estimated 80 per cent of world trade. With maritime trade expected to increase between 40 per cent and 100 per cent by 2050 from 2020 levels, there is a growing call to decarbonise the maritime sector.
Maritime transport emits around 940 million tonnes of carbon annually and is responsible for about 2.5 per cent of global greenhouse gases, according to the IMO.
In 2023, the IMO updated its maritime decarbonisation target to be significantly more ambitious. However, a core component of the strategy, which was to adopt the first carbon levy mechanism to curb emissions from international shipping, toward zero emission fuels by 2050, has been stalled to 2026.
