Innovative financing for a sustainable shipping industry

The shipping industry, like many others, is under growing pressure to be more sustainable, in terms of environmental and structural considerations. This entails significant funding requirements to meet regulatory and other demands. Traditonally ship financing has been done on a secured basis with relatively few sustainability considerations. This approach is ripe for innovation, considering the industry's big environmental footprint, and it must also work for ship owners, operators and funding providers. Evidence from other industries suggests that borrowers could benefit in pricing and structure from sustainability oriented borrowing, such as green bonds (where proceeds are dedicated to environmental and social investment). The purpose of this investigation is to present and analyse an initial literature review on the topic, in anticipation of carrying out a survey of a sample of vessel registry, to determine perceptions and refine desirable characteristics of sustainable ship financing. The results of this work can act as a wider template for green ship financing recommendations and practice. This would be promoted to industry participants (on both shipping and finance sides) and policy makers, and also be disseminated in industry and academic publications. Green financing continues to grow in investor interest and new applications. While a large part up to now has been devoted to renewable energy, a growing segment is that of transport, particularly motor vehicles. The shipping industry, a globally significant activity, generates pollutants through fuel consumption and sea contamination. In contrast to some other industries, relatively little attention has been paid up to now to promoting the environmental sustainability of this vital service. Regulations have been adopted which mandate limits on marine pollution caused by shipping, but further progress needs to be made.