Poseidon Principles is a framework for Banks/Financial institutions to use their influence as a major capital provider to the shipping industry to support the objective of IMO GHG (Green House Gases) reduction by 50% by 2050.
Normec Verifavia offers trusted expertise in data collection, alignment calculations, and independent verification, empowering you to confidently navigate these principles and contribute to a greener maritime future.
The principles aim to be voluntary, practical to implement, verifiable, fact-based, and effective. Signatories commit to implementing the principles in their internal policies, procedures, and standards.
Scope
The Poseidon Principles are applicable to lenders, relevant lessors, and financial guarantors including export credit agencies. The Poseidon Principles must be applied by Signatories in all Business Activities that are
Exact Technical Description of Poseidon Principles
The data submitted to a Flag State for IMO verification along with a Statement of Compliance must be provided to the Signatory. Signatory will calculate the climate alignment on portfolio level and will submit the results to Secretariat.
Role of a Shipowner
The Shipowner will give consent to Signatories to collect the Verified IMO DCS Data along with the SoC and calculate the vessel and Portfolio Climate Alignment. Data calculation can be performed by Signatories internally or a party nominated by the Signatory. This party can be an RO or a third party.
The Poseidon Principles are a voluntary but powerful initiative launched in 2019 by a global coalition of financial institutions. By signing onto the principles, you commit to:
Key Requirements and Regulations:
Normec Verifavia: Your Poseidon Principles Partner:
Normec Verifavia is the world’s leading independent carbon emissions verification body for shipping under the EU (European Union) MRV and the IMO DCS, accredited by UKAS, COFRAC, the Panama Maritime Authority, the Liberia Maritime Authority, and several other Flag States. Each year, we successfully verify the carbon emissions of 2000+ ships.
Over the years, Normec Verifavia has acquired tremendous experience in collecting fuel consumption, CO2 emission, cargo, and transport work data (and documents) from ship operators/managers/owners. We are experts in transforming, analysing, and verifying a vessel’s operational data and efficiency parameters, and our procedures ensure robust and accurate analysis.
Normec Verifavia can provide the data from the RO/Shipowner and can perform independent calculations as an expert third party on behalf of the Signatories. We have the manpower, technical skillset, and technological capabilities to handle any amount of data.
As we are already working with leading Flag States like Panama and Liberia, we can also act as an RO for providing the data to Signatories.
Calculate Average Efficiency Ratio (AER) using verified vessel data.
Benchmark vessel AER against the Poseidon Principles’ decarbonization trajectory.
Obtain a holistic view by calculating weighted average alignment across your fleet.
Submit annual reports and potentially publish results, fostering industry-wide progress.
The Poseidon Principles are a framework for assessing and disclosing the climate alignment of ship finance portfolios. The Poseidon Principles create common global baselines that are consistent with and supportive of society’s goals to better enable financial institutions to align their portfolios with responsible environmental impacts.
The four Principles are:
The objective is to gather a group of committed financial institutions to take ownership of a set of principles to integrate climate considerations into lending decisions in ship finance, consistent with the climate-related goals of the IMO.
The principles aim to be voluntary, practical to implement, verifiable, fact-based, and effective. Signatories commit to implementing the principles in their internal policies, procedures, and standards.
The principles are intended to evolve following a regular review process to ensure that the principles are practical and effective, are linked to and supportive of the IMO’s GHG measures as they develop over time, and that further environmental factors are identified for inclusion.
Principle 1 – Assessment
This principle provides step-by-step guidance for measuring the climate alignment of signatories’ activities with the agreed climate target. It establishes a common methodology for calculating the emission intensity and total GHG emissions, and thus also provides the input needed to track the decarbonisation trajectories used to assess signatories’ alignment.
Principle 2 – Accountability
To ensure that the information provided under the principles is practical, unbiased, and accurate, it is crucial that signatories only use reliable data types, sources, and service providers.
Principle 3 – Enforcement
This principle provides the mechanism for meeting the requirement of the Poseidon Principles. It also includes a covenant clause to ensure data collection.
Principle 4 – Transparency
The intent of the transparency principle is to ensure both the awareness of the Poseidon Principles and that accurate information can be published by the Secretariat in a timely manner. Furthermore, transparency is key in driving behavioural change.
Climate alignment is currently the only environmental factor considered by the Poseidon Principles. This scope will be reviewed and may be expanded by signatories on a timeline that is at their discretion.
The Poseidon Principles are applicable to lenders, relevant lessors, and financial guarantors including export credit agencies. The Poseidon Principles must be applied by signatories in all business activities that are:
that are credit products (including bilateral loans, syndicated loans, club deals, and guarantees) secured by vessel mortgages or finance leases secured by title over vessel or unmortgaged ECA loans tied to a vessel; and
where a vessel or vessels fall under the purview of the International Maritime Organization (IMO) (e.g. vessels 5,000 gross tonnage and above which have an established Poseidon Principles trajectory whereby the carbon intensity can be measured with IMO Data Collection System (DCS) data).
The Poseidon Principles were launched on 18 June 2019.
Shipowners of varying sizes and geographies have been engaged and consulted throughout the process of developing the Poseidon Principles.
A first draft was presented and discussed at a session held in conjunction with the Global Maritime Forum’s Annual Summit in Hong Kong in October 2018. Participants there welcomed the principles with great enthusiasm.
The Poseidon Principles for Marine Insurance were developed later (December 2021) and were strongly inspired by the Poseidon Principles. The four core Principles are the same for both the Poseidon Principles and the Poseidon Principles for Marine Insurance and both initiatives also use the same metric – AER (Annual Efficiency Ratio). The Poseidon Principles for Marine Insurance, however, have also chosen to take steps toward alignment with the Paris Agreement by providing two trajectories: a 50% CO₂ reduction trajectory in alignment with the 2018 IMO GHG Strategy and a 100% CO₂ reduction trajectory. They have also committed to updating current trajectories in 2024 to align with the 2023 IMO GHG Strategy.
Another initiative similar to the Poseidon Principles is the Sea Cargo Charter – a framework for responsible chartering. The ambition to develop the Sea Cargo Charter finds its source is the early stages of the Poseidon Principles. The four core Principles are the same for both the Poseidon Principles and the Sea Cargo Charter, but the two frameworks rely on different metrics. The Poseidon Principles uses AER and can therefore rely on the IMO DCS to collect data, while the Sea Cargo Charter uses EEOI and thus have a different approach to source data.
The Poseidon Principles have so far been aligned with the ambition set by the IMO in its Initial Strategy in 2018 with a target of at least 50% reduction of GHG emissions by 2050 on 2008 levels. At MEPC 80 in July 2023, a revised strategy was put in place introducing higher ambition as well as differences in the emission boundaries to be considered.
There are four main elements that changed with the adoption of the new trajectory:
