4th meeting of the BIMCO ESG network explores the potential impact of upcoming legislation

Published: 05 March 2024

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A regulatory overview  

ESG expert Gina Panayiotou from West P&I kicked off the 4th meeting of the network by painting a picture of ESG regulation around the globe – highlighting that at least 14 countries or regions now having some kind of ESG reporting requirements.  

These are mostly climate-related financial disclosures (CFD)  that follow the recommendations of the Task Force on CFD (Recommendations | Task Force on Climate-Related Financial Disclosures (fsb-tcfd.org)). However, when it comes to ESG requirements focus of the talk was on the EU where a raft of existing and proposed regulation truly bring ESG to the forefront of the minds of not only companies who are based in the EU but also companies who trade with the EU.  

The following EU initiatives were highlighted: 

• The Taxonomy Regulation - Positively recognises green, or “environmentally sustainable,” economic activities that make a substantial contribution to achieving six climate and environmental objectives, while meeting minimum social safeguards. It is a transparency tool that introduces mandatory reporting obligations on some companies and investors, requiring them to disclose their share of taxonomy-aligned activities, allowing for the comparison of companies and investment portfolios 
• The Non-Financial Reporting Directive (NFRD) -Requires that certain large EU public interest companies must disclose non-financial and diversity information in their annual reports - related to environmental protection, social responsibility and treatment of employees, respect for human rights, anticorruption and anti-bribery, and diversity on company boards 
• The Sustainable Finance Disclosure Regulation (SFDR) - Aims to enhance transparency in the sustainable investment market. Its purpose is to prevent misleading environmental claims – also known as “greenwashing” – against investment products and to increase investment into sustainable products to accelerate the transition to a low-carbon economy 
• The proposed Corporate Sustainability Due Diligence Directive (CSDDD)- A somewhat controversial EU proposal that will require companies to exercise reasonable due diligence in their own business and in their “value chains” to prevent or minimise human rights or certain environmental risks, and to end human rights violations or certain environmental violations. The debate on this Directive continues amongst EU member states and we will keep members informed on the outcomes when appropriate.  

Additionally, on 13 June 2023, the European Commission published a proposal for a regulation on ESG ratings. The legislative proposal lays out a regulatory framework for the provision of ESG ratings in the EU. 

The EU Corporate Sustainability Reporting Directive (EU CSRD) is the one raising the most interest.  The CSRD broadens the existing applicable NFRD and looks to address key structural weaknesses in current ESG regulation reporting.  Read more here: How the global shipping industry may be impacted by the European Corpo... (bimco.org)

During the meeting, Gina highlighted some of the challenges for the shipping industry in meeting the requirements of the EU CSRD and on ESG reporting as a whole. These include: a diversity of fleets & organisations, complex supply chains, lack of incentives (and risk), a lack of a global level playing field when it comes to social factors as well as setting measurable targets.  Achieving transparency and the accuracy and sharing of data were also highlighted as well as the lack of experience and prioritisation within companies. A poll of the attendees highlighted that a lack of industry specific standards, global standard applicable to shipping and policy clarity were their biggest concerns.  

The move towards increasing ESG reporting is presenting challenges for some members. With 75% of those present at the meeting reporting that they received between 1 and 10 requests for ESG data from stakeholders per year. A further 13% reported this number was greater than 10.  The need for the development of standards now- both sector specific and global was seen by those present as the most important step in helping to implement ESG reporting.  

What tools might BIMCO provide to support?  

The second half of the meeting explored the potential for the existing BIMCO PI system (https://www.bimco.org/ships-ports-and-voyage-planning/shipping-kpi-system) to be used to gather ESG data. The Shipping KPI System is a global shipping industry tool for defining, measuring, and reporting information on operational performance. It uses a unique standard of 67 different performance indicators to allow the most specific and accurate comparison of ships - across different types and sectors - that is currently available. Kirils Kondratenko from BIMCO demonstrated to the group how certain ESG elements can already be captured such as environmental performance and health and safety aspects and how new indicators may be developed in future.  

It was discussed how this expansion would need to account for information beyond ship/fleet – potentially covering the company itself and prospectively its value chain too. Critically, however it has to include relevant indicators that are demanded by the industry and the value chain, representative of the company’s sustainability profile and include either readily available or information may be obtained at no significant cost or disadvantage to smaller companies. 

Input into ESG standard development  

We would love to hear from members who would like to support BIMCO and other partners in standardising ESG data. There are three ways in which you may wish to participate: 

• Joining the ESG network and become involved in the high-level conversations on this topic 
• Participating in our consultation activities related to the development of ESG standards- register by emailing 
• Sharing with us requests you receive from customers and other stakeholders for ESG data. 

To participate in any of the above please contact BIMCO team via bm@bimco.org  

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