By Carole Plessy, Head of Maritime, OneWeb
Shipowners and operators are under increasing pressure from investors, regulators, and customers to demonstrate strong Environmental, Social, and Governance (ESG) performance. Carole Plessy, Head of Maritime for OneWeb, explains the challenges of implementing an ESG-focused strategy for shipowners and operators and how the industry can find the pathway to success by using insightful data and taking a collaborative approach.
Over the last 12 months, ship owners and operators have been getting to grips with how ESG principles are being applied to shipping and what it means for business. ESG drivers are coming from various angles; from financiers, insurers, regulators and customers, many of which are powerful companies with ambitious sustainability strategies and want to work with like-minded suppliers.
As this movement grows, demonstrating responsible transparent business practices is finally becoming mainstream and the figures speak for themselves—global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management, according to Bloomberg Intelligence.
While there is industry appetite to improve ESG performance, this requires tackling highly complex issues such as decarbonization, improving crew welfare, supporting coastal communities and fundamentally changing approaches to transparency, to name a few. And, without existing benchmarks or frameworks to follow, knowing where to set the bar in terms of stretch targets or what “best practice” looks like can make it difficult to get started. It has also become clear that setting ESG strategies run this risk of being developed in the dark due to a profound lack of comprehensive, integrated information to support decision making.
Currently, those responsible for creating ESG strategies are relying on fragmented, and sometimes out of date, data sets from across operations. Without a complete picture of performance it is almost impossible to identify where adjustments need to be made and the best way of approaching them.
Bridging the Data Gap
So, how is the data gap bridged and is that enough for setting effective strategies? Firstly, we need to address the collection and transmission of data from seaborne vessels. Currently, vessels tend to generate such a small number of data sets when compared with land-based operations of a similar asset value. The increasing use of clean-tech and smart technology onboard vessels is slowly changing this, but these tools need to be supported by better remote connectivity in order to be able to truly fly.
We have seen this reflected by the likes of Maersk who highlighted the importance of digital connectivity in providing much of the data in its reports, particularly around emissions, but also in ensuring its people are “safe and engaged.” From our conversations within the market we have heard this echoed on a wider scale and know that there is demand for better connectivity to support smart data use.
The emphasis here is on “smart;” understanding what data is needed and ensuring that its analysis is applied with precision to meaningfully shape a strategy. This takes collaboration from across an organization and as such, understanding the role of data as a strategic asset should extend beyond technical and IT functions. By doing so, operators will be better positioned to ensure they are gathering the right kind of data and have the internal infrastructure in place to ensure that it is applied in a way that delivers the most value.
Removing Outdated Infrastructure
To support this shift, we support cultural and operational changes towards how data is managed and analyzed. As legacy remote connectivity systems are replaced, so too should we support initiatives to remove outdated infrastructure and automate manual processes so that data analysis is part of a holistic operational ecosystem rather than viewed in silos. Understanding what the data highlights at management and boardroom levels will also be key to integrating and measuring ESG objectives both operationally and commercially.
Data on its own can’t solve everything—companies have to be able to follow up on what the insights tell them. But, with better intelligence, ship owners and operators will be empowered to improve and evaluate environmental performance, manage crew welfare and social impacts, increase the accuracy of regulatory reporting and support the governance of the oceans. Progress will take time, but we are confident that the building blocks are ready to be put in place to support a period of radical change. We are optimistic that in this spirit, ships could legitimately become seaborne platforms of intelligence that are part of the solution, rather than the problem.