SSI workstream - Sustainable shipping rating schemes: How to use and improve sustainability rating schemes in shipping


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SSI workstream - Sustainable shipping rating schemes: How to use and improve sustainability rating schemes in shipping

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SSI workstream - Sustainable shipping rating schemes: How to use and improve sustainability rating schemes in shipping

  1. 1. Credible Benchmarking Work Stream With the help of the Southampton Solent University
  2. 2. Contents Overview and process Background Search and compare rating schemes How to use rating schemes What’s next and resources Appendix 1 – How rating schemes create change Appendix 2 – Case studies
  3. 3. Our challenge was to find ways of helping the shipping industry and its customers to navigate the growing number of beyond-compliance rating schemes; to encourage wider adoption of rating schemes and to improve sustainability performance in the shipping industry. Our aim is to provide and improve the transparency and comparability that enables cargo owners, charterers and ship owners to integrate sustainability considerations into commercial decisions, and move towards a more sustainable shipping industry. The challenge
  4. 4. Summary of the work stream Over the last year we have: • Developed a web-based tool, to help cargo owners and charterers to select the rating schemes that most closely meet their needs • Produced guidance on how to use ratings schemes for best effect • Compiled a series of case studies that illustrate how rating schemes are already being used to inform business decisions • Imagined what the best rating schemes will look like in the future and the positive impacts they could have on the industry
  5. 5. Background
  6. 6. What the research told us Research by Southampton Solent University identified five barriers to uptake of sustainable rating schemes: • Low demand from shipping industry customers, due to lack of awareness and understanding of how to use of rating schemes • Perception of cost and lack of clarity over business benefits to industry • No critical mass in the market • Lack of standardisation in outputs and metrics e.g. CO2, SOx and NOx • Lack of alignment between different parts of the shipping industry
  7. 7. What’s important about rating schemes We want to encourage and facilitate greater transparency of environmental performance in shipping and promoting the use of rating schemes supports this because: • Benchmarking leads to better informed business decisions and helps establish higher baselines • Greater uptake and engagement by the shipping industry and their customers, will lead to the ongoing development and improvement of rating schemes • Their effectiveness is currently limited by a number of factors including awareness and understanding
  8. 8. How rating schemes improve business Sustainability rating schemes are an important means of both declaring and demanding information about a ship’s sustainability performance. Credible benchmarking enables customers to make informed decisions based on the performance of shipping lines and vessels. The primary incentive to join or participate in a rating scheme is to gain a commercial advantage, for example: • Meet CSR requirements - particularly cargo owners • Gain economic incentives – e.g. reduced port fees • Better terms with banks and insurers
  9. 9. How rating schemes create change The experience of other industries demonstrates how mass uptake of rating schemes is an effective way of creating change towards sustainability. • LEED and BREEAM have continued to push sustainable building performance standards beyond the regulatory minimums for 20 years • The Marine Stewardship Council (MSC) has recognised and rewarded sustainable fishing practices as well as raising awareness with consumers • The Forestry Stewardship Council (FSC) promotes the responsible management of the world’s forests See Appendix 1 for more details
  10. 10. Search and compare rating schemes
  11. 11. The search and compare tool The web-based tool we have developed simply helps cargo owners, charterers and ship owners to compare and select from the rating schemes currently available to them on the basis of objective criteria.
  12. 12. Vessel Type Many schemes cover more than one vessel type, while others specialise in rating just specific vessel types.
  13. 13. Benchmarking scope The scope of schemes varies. Those included so far, rate: • CO2 • NOx • SOx • Particulate matter (PM) • Water and waste • Chemical use
  14. 14. Transparency and verification Some schemes require data to be verified by a 3rd party. Other schemes are themselves independently verified. Many publish their methodology and some also make results available.
  15. 15. Geography Many of the schemes are global, some are only available for regional operators and others are locally specific.
  16. 16. Performance Some ratings are based primarily on the performance of a ship during operation. Others use the design characteristics of a vessel to predict performance.
  17. 17. Metrics and Outputs There is a variety of rating methodology and scoring to choose from: • Step ratings where ship or service performance is banded • Absolute data e.g.CO2 per tonne/km • Scoring framework based on a weighted averages • Straight forward pass or fail
  18. 18. How to use rating schemes
  19. 19. Identifying schemes and how to use them As there is no single rating scheme that is perfect for everyone, each scheme represents a balance between accuracy and simplicity of assessment, as well as applicability to different sectors. To help users make informed decisions we have developed: • Some detailed guidance notes for cargo owners and charterers when using and interpreting a rating scheme • A series of case studies to illustrate how to get the most from rating schemes
  20. 20. Understanding rating schemes Link to Guidance for Users Our guidance notes have been developed to help identify the key issues when choosing a rating scheme and use the Search and Compare tool to select the right rating scheme for individual needs.
  21. 21. Making the most from rating schemes More in Appendix 2 and in detailed case studies.
  22. 22. What’s next?
  23. 23. What next… • We are exploring how to extend the uptake of rating schemes and drive continuous improvement in standards across the shipping industry • We hope our independent guidance will contribute to an increase in the uptake of rating schemes and demand for transparency from logistics managers and charterers • We recognise the need for leadership in this area; many of the SSI members already use rating schemes and are keen for others to adopt them
  24. 24. Future developments As rating schemes develop and uptake increases we would like to see: • External alignment to make comparison possible by aligning metrics, weighting and data format • Credible metrics based on evidence that is relevant for shipping companies and cargo owners, and better still globally agreed • Transparent weighting criteria is essential if impacts are to be convincingly valued and compared • Proper use of performance data will ensure users reward best performance • Reliable governance by reputable rating schemes will involve all relevant stakeholders
  25. 25. Remaining challenges and barriers In the short term: • SSI members need to sign up to and use rating schemes themselves • The SSI has a role to play in promoting rating schemes in principle and the online tool specifically • All rating schemes could benefit from greater collaboration and alignment • There is still a lack of demand and awareness of rating schemes among the key audiences – namely the charter market and shipping customers/cargo owners • We would like to see the sustainability of ships, routes, and/or fleets incorporated into procurement decisions made by logistics managers, charterers and shipping agents
  26. 26. Resources Link to Search and Compare rating schemes tool Guidance for users Getting the most from rating schemes Appendix 1 - How rating schemes create change Appendix 2 - Case studies
  27. 27. Appendix 1 - How rating schemes create change
  28. 28. Rating buildings BREEAM and LEED are both primarily used to assess the design of new buildings and provide an easy to understand sustainability rating. These two global schemes are the market leaders for sustainability benchmarking in the built environment. • LEED originated in the US in 1993 • BREEAM originated in the UK in 1990 Both are voluntary schemes and have been highly successful at pushing building performance beyond regulatory minimum levels.
  29. 29. Rating buildings Twenty years since their inception • There are over 250,000 BREEAM and LEED rated buildings worldwide • And more than 1m more planned How do they work • Assess building designs based on factors including energy, water use, waste etc. • Results are combined to give a ‘weighted average’ score for the building – Pass, Good, Very Good and Excellent for BREEAM, and Bronze, Silver, Gold and Platinum for LEED
  30. 30. Lessons learned - being “Good Enough” Similar to many of the ship rating schemes available today, BREEAM used the tools and metrics available to them when it launched in 1990. Some of these - including the energy calculations – were controversial, causing some concern to architects and engineers who considered their buildings were not being assessed accurately. However, for the Planning Authorities, building purchasers and occupants who wanted to know about sustainability of their buildings, the level of accuracy was considered sufficient for them to start demanding BREEAM assessed buildings, thereby driving uptake of the scheme by the industry, and forcing even reluctant developers and designers to engage with the scheme.
  31. 31. Lessons learned – allowing for improvement over time Increased industry uptake of BREEAM provided the credibility and finance for BREEAM to continue to engage with the industry, and progressively improve metrics and methods over time. Had BREEAM waited until ideal metrics were in place prior to launch, it is arguable that the scheme would have failed to achieve the market penetration gained by meeting market demand with a scheme that was ‘good enough’ rather than perfect.
  32. 32. Lessons learned – engaging the market Initial demand for BREEAM was driven by Planning Authorities who wanted a simple way of ensuring that new buildings met a minimum standard of sustainability – and UK Government clients, who mandated that all Government occupied buildings would be required to achieve BREEAM Very Good (now Excellent). This enabled demand for BREEAM to reach beyond the ‘environment conscious’ developer, by providing the commercial incentive of access to lucrative government contracts
  33. 33. Appendix 2 Case studies
  34. 34. Maersk and CCWG Challenge / business need Solution Adoption of rating scheme driven by customers demands. Maersk a member of the CCWG since 2003 Uses of CCGW Benefits Internal and external benchmarking Enabling customers to make well informed decisions Adoption of the environmental standards defined by the CCWG. Improvements in environmental performance Communication of environmental performance to customers and other stakeholders Customer dialog and collaboration
  35. 35. Thank you With the help of the Southampton Solent University Prepared by Polly Simpson