In recent years, the maritime industry has faced a critical mandate to reduce its greenhouse gas emissions and align with international climate goals, and the International Maritime Organization (IMO) has set ambitious targets to achieve net zero carbon emissions by 2050. These targets, combined with rising stakeholder expectations, have prompted shipping companies to explore greener technologies and more sustainable business models.

This evolving landscape is also altering how the maritime industry is perceived and assessed by financial institutions and investors. Green financing has emerged as a pivotal mechanism enabling shipping companies to make this shift. It is no longer just about securing funding, but about demonstrating commitment to sustainability principles.

The Poseidon Principles: A Game-Changer for Maritime Finance

Introduced in 2019, the Poseidon Principles represent a pioneering step for aligning financial practices with global climate objectives. These principles provide a transparent framework for financial institutions to assess whether the carbon intensity of their shipping portfolios aligns with IMO’s targets. Financial institutions that adopt the Poseidon Principles commit to evaluating and disclosing the climate alignment of their shipping portfolios annually.

This initiative has triggered a new wave of accountability, encouraging more lenders to prioritize financing vessels that meet or exceed decarbonisation standards.

As Nikolaj Malmberg, Head of Business Development, Marine in Hempel A/S explains: “The outcome of the Poseidon Principles is twofold: companies that invest in green technologies gain more attractive financing options, while those that lag behind risk financial marginalisation. In essence, green financing is becoming synonymous with risk mitigation and strategic foresight in the industry.”

The Rise of Sustainable Investors

An equally significant shift in maritime financing is the growing presence of pension funds and institutional investors with strong environmental, social, and governance (ESG) mandates. Pension funds, which manage trillions of dollars globally, are increasingly favouring investments that align with long-term sustainability goals. This shift has led to heightened scrutiny of shipping companies’ environmental practices, pushing them to adopt cleaner fuels, retrofit vessels, and leverage digital technologies for efficiency improvements.

Nikolaj continues: “While this drives a much-needed forward momentum, the shift towards sustainable financing brings both challenges and opportunities for the maritime industry. Three areas in particular stand out: Access to capital, technological investments and regulatory compliance.”

• Access to Capital: Companies committed to decarbonisation can leverage green bonds, sustainability-linked loans, and other financing mechanisms designed to support environmentally beneficial projects. However, accessing these funds often requires meeting stringent criteria and demonstrating clear environmental benefits.
• Technological Investments: Transitioning to greener operations requires substantial investments in technologies such as alternative fuels (e.g., biofuels, ammonia, hydrogen, and LNG), energy-efficiency measures, and digital solutions for voyage optimisation. Companies must balance the costs of these investments with the need to stay profitable, investing where you will get most bang for your buck.
• Regulatory Compliance: As regulations become increasingly stringent, shipping companies that proactively adapt will position themselves as leaders. Those that fail to do so risk being left behind, facing potential devaluation of their assets in charter markets while also facing higher financing costs from their lenders.

For Nikolaj, the key to turning challenges into opportunities is clear: Adopt a proactive stance.

Nikolaj: “The industry must embrace transparency and proactively align with frameworks like the Poseidon Principles. In addition, building relationships with institutional investors who prioritise ESG can open new funding streams and attract long-term investors. Finally, companies must prioritise and invest in innovation. Future-proofing operations with green technology and innovative solutions is essential, and will enhance your company’s financial resilience.”

By aligning with initiatives like the Poseidon Principles, cultivating relationships with sustainability-driven investors, and investing in green technologies, the maritime industry can chart a course toward a future that is both financially sound and environmentally responsible.

“The investment landscape is changing from passive to active, with investors holding companies accountable not just for financial returns, but for their role in advancing sustainable practices. For the maritime industry, this trend translates into a pressing need to integrate sustainability into core business strategies to remain attractive to investors and competitive in global markets,” concludes Nikolaj.