A GROUP of the world’s leading banks will for the first time include efforts to cut carbon dioxide emissions in their decision making when providing shipping company loans, executives said Tuesday.

International shipping accounts for 2.2 percent of global carbon dioxide (CO2) emissions and the U.N.’s International Maritime Organization (IMO) has a long-term goal to cut greenhouse gas emissions by 50 percent from 2008 levels by 2050.

Working with non-profit organizations the Global Maritime Forum, the Rocky Mountain Institute and London University’s UCL Energy Institute, 11 banks have established a framework to measure the carbon intensity of shipping finance portfolios.

The banks involved in the “Poseidon Principles” initiative, which will set a common baseline to assess whether lending portfolios are in line or behind the adopted climate goals set by the IMO, represent around a fifth or US$100 billion of the total global shipping finance portfolio.

The results will be published annually in individual sustainability reports and the data will be obtained by banks from borrowers under loan agreements.

Although the IMO agreed stricter energy efficiency targets last month for certain types of ships, environmental campaigners are calling for tougher goals.

“We are helping the shipping industry emerge into the 21st century in a responsible way,” said Michael Parker, global head of shipping at Citigroup.

Those involved so far are Citigroup, Societe Generale, DNB, ABN Amro, Amsterdam Trade Bank, Credit Agricole CIB, Danish Ship Finance, Danske Bank, DVB, ING and Nordea.

“Banks have a huge role to play here because there is about US$450 billion in senior debt that the world’s shipping banks and Chinese lessors grant to the sector and about 70,000 commercial vessels,” said Paul Taylor, global head of shipping & offshore with Societe Generale CIB.

Banks will in the longer term be more selective about which ships they include in their lending portfolios, bankers said.

(SD-Agencies)