ESG stands for:
E – Environmental
S – Social
G – Governance
It is a framework used to measure a company’s sustainability, ethical performance, and long-term risk management.
1️⃣ Environmental (E)
Focuses on:
-
Carbon emissions (CO₂, methane)
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Energy efficiency
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Pollution prevention
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Waste management
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Compliance with IMO regulations
In shipping, this links to:
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EEXI & CII compliance
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Alternative fuels (LNG, methanol, ammonia)
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Ballast Water Management
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MARPOL compliance under the International Maritime Organization
2️⃣ Social (S)
Focuses on:
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Crew welfare
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Safety standards
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Working conditions
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Diversity & inclusion
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Community impact
Linked to:
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Maritime Labour Convention
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Training & safety culture
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Accident prevention
3️⃣ Governance (G)
Focuses on:
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Ethical business practices
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Anti-corruption policies
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Transparent reporting
-
Regulatory compliance
-
Board accountability
In shipping:
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ISM Code compliance
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Anti-bribery measures
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Accurate reporting of emissions
🔹 Why ESG is Important in Shipping
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Investors now prefer companies with strong ESG performance
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Banks follow Poseidon Principles
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Charterers prefer low-carbon vessels
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Affects ship financing & insurance
🔹 Role of Chief Engineer (MEO Perspective)
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Maintain fuel efficiency
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Reduce emissions
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Prevent pollution
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Ensure proper record keeping
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Follow safety management system
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