Major Japanese lenders join the maritime industry program to reduce carbon emissions

By Jonathan Saulo

LONDON, March 16 (Reuters) – Leading Japanese lenders have joined an initiative that links the provision of shipping finance to carbon cuts as the industry accelerates efforts to go green.

In recent weeks, Shinsei Bank Ltd, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Finance & Leasing and MUFG Bank have joined the program, the banks said.

With around 90% of world trade transported by sea, global shipping accounts for nearly 3% of the world’s CO2 emissions.

In 2019, a group of major banks entered into environmental commitments known as the “Poseidon Principles,” under which lenders would take into account efforts to reduce CO2 emissions when lending to shipping companies.

Japan is one of the major shipping hubs in the world, particularly for shipbuilding.

By joining the program, MUFG Bank said Tuesday that it “will contribute to the sustainability of the maritime sector.”

Sumitomo Mitsui Trust Bank was the first Asian lender to join in March last year.

There are currently 24 institutions involved, including other important players in the sector such as Citi and Société Générale. Their naval loan portfolios account for approximately $ 175 billion, nearly 50% of global shipping financing.

The principles establish a common baseline for assessing whether loan portfolios are in line with or behind climate targets set by the United Nations maritime agency, the International Maritime Organization (IMO).

The IMO aims to reduce the sector’s greenhouse gas emissions by 50% compared to 2008 levels by 2050, a goal that will require the rapid development of zero- or low-emission fuels and new ship designs using cleaner technology .

Michael Parker, president of the Poseidon Principles Association, said he was optimistic that Asian lenders will join this year.

“The other important factor will be (United Nations summit) COP26 in Glasgow, where we expect the maritime sector … to draw the attention of global leaders to the progress made by the industry,” said Parker, who is also president. of Citi’s global maritime, logistics and offshore business. (Editing by Bernadette Baum)

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