2. The Sustainable Shipping Initiative brings
together some of the industry’s biggest
names to plan out how shipping can
contribute to – and thrive in – a
sustainable future

3. SSI objective
Our goal is to
transform the global
shipping industry and
the wider maritime
sector, establishing a
new, sustainable
approach as normal
© BP Shipping

4. Strategic:
the Initiative looks beyond
immediate regulatory Balanced: while recognising
concerns to the key climate change, the SSI will also
challenges and trends, and address wider sustainability
frames an ambitious issues such as biodiversity,
opportunity agenda for the transparency and economic
industry. development.
Independent: while
most members will have
legitimate commercial
interests, the
involvement of Forum for
the Future and WWF
ensures that it acts as an
independent force for
sustainable
Integrated: bringing Global: a multinational
development, reinforcing
together shipping membership to address
constructive interaction
companies and key global concerns.
with policy-makers.
stakeholders like customers
and financiers.

5. Key phases of the SSI
We’re just concluding Phase 1: The Case for Action and are about to
start Phase 2: Vision 2040

6. the case
for action
the case for action
Aim:
Identify the
strategic trends
which will affect Outputs:
shipping over Case for Action
the next 30 report
years
Download the
report here

7. The Case for Action suggests
three major challenges for shipping

8. The 3 key challenges
Challenge 1:
Navigating a
changing economic
context
Challenge 2:
Increased scrutiny,
higher expectations
Challenge 3: The
future of energy and
climate change

9. Challenge 1
navigating a changing economic context
from here to 2040
• significant changes in the
direction of trade and the type of
goods transported
• Global expansion is not the only
possibility – there are reasons
why trade might decline:
- economic growth vulnerable
to resource crunch,
protectionism, health &
terrorism issues

10. Challenge 1
navigating a changing economic context
opportunities
• A tighter market will favour the most
efficient operators
• A coordinated group of leaders could
develop progressive measures that
address future challenges.
• Shipping logistics at the centre of
more closed-loop economies.
• new routes and markets provide new
opportunities
risks
• Not ready for rapid change in routes and markets.
• A patchwork of regulation that makes shipping overly complex and reduces margins.
• Protectionism or contraction in trade
• Workers’ rising expectations in developing economies make it harder and more
expensive to recruit.

11. Challenge 2
increased scrutiny, higher expectations
from here to 2040
In a highly networked world, shipping is
likely to come under increased scrutiny.
Greater transparency will encourage /
enable customers and other stakeholders
to favour strong performers.
Expect:
• Customers focus on wider
performance factors such as working
conditions, vessel efficiency,
emissions, biodiversity and
environmental/labour rights
• remote monitoring technology enables unprecedented transparency
• rapid proliferation of voluntary standards and codes of conduct for shipping
• raised expectations from ports, financiers, insurers and others.
• increasingly stringent international, national, regional and city-based regulations.

12. Challenge 2
increased scrutiny, higher expectations
opportunities
• Transparently good performers gain
preferential access to finance,
insurance and markets.
• Improved transparency reduces
opportunities for poor performers to
undercut the market.
• Collaborating with others in the
supply chain allows the shaping of
new standards
risks
• complex patchwork of standards creates
compliance burden.
• social media campaigns focus on poor performers tarnish the whole industry.
• Poor performers are exposed and excluded from more demanding markets
• Technology enabled enforcement forces expensive, reactive improvements at the
bottom of the market.
• Lack of co-operation on standards leads to overly expensive or bureaucratic standards

13. Challenge 3
the future of energy & climate change
from here to 2040
• The age of cheap oil is over. Volatile
prices and insecure supply present a
significant challenge to shipping and
the wider economy.
• As climate change gathers pace,
increasing pressure for shipping to be
included in regional and global
regimes to reduce greenhouse gas
emissions.
• Price and regulatory uncertainty
undermine investment decision
making .
• Strong leadership required to prevent
uncertainty leading to inaction.

14. Challenge 3
the future of energy & climate change
opportunities
• Shipping remains the most energy
efficient transport mode
• Rising oil prices give advantage to
more efficient operators
• Retrofit opportunities for yards
• Potential fiscal support for
technology shifting measures
risks
• Rising fuel prices accelerate
obsolescence of inefficient vessels
• Innovation stifled by glut of available tonnage
• Technological advance frustrated by split incentives, separating investors and
beneficiaries of energy efficiency investments, or by short investment horizons so new
entrants can outmanoeuvre incumbents

15. the challenges are made up of 7 Global
Megatrends in shipping

16. What challenges will shipping
face in the next 30 years?
4. Moving on from
oil – the future of
energy
1. The Global Economy:
Emerging Giants?
5. Demanding
higher standards:
sustainability
2. Freedom vs level playing regulation
field: Ocean Governance
6. Advancing
technology – making
it pay
3: No secrets: demand for
transparency 7. Adapting to a
changing climate

17. global trends:
the global economy: emerging giants
what’s happening now
• Phenomenal growth of BRIC & other
nations
• Multipolar world with more evenly
distributed power
• Relative decline of ageing Europe/North
America
• Economic growth vulnerable to
© ricardoazoury / istock
resource crunch, protectionism, health
& terrorism issues

18. global trends:
the global economy: emerging giants
possible futures
BRIC blooms: Protectionist or local Globally connected,
• China becomes the • Resource, energy or locally focussed
world’s top economy, climate constraints • Resource pressures
and the heavyweight provoke protectionist provoke more
in global trade policy responses. regionalism.
negotiations • Corporate supply • Closed loop
• Continued strong chains regionalise. manufacturing, and
trade growth • Economy fragments virtualisation
with bilateral approaches help
agreements and trade maintain trade and
restrictions co-operation, while
moderating raw
material demand.

19. global trends:
the global economy: emerging giants
implications for shipping
• Consolidation and reform: an ambitious IMO would benefit the industry, providing
long term certainty, planning and investment.
• Regionalisation implies a patchwork of governance. A 2-tier industry could develop,
with strong performers navigating complexity to access all markets, while poor
performers confined to weakly governed areas.
• Collapse: the industry could face piecemeal militarisation or
no-go areas and increasing security costs.
• How can we get a co-ordinated
voice for leadership that
influences the future of global
governance and policy in a
progressive way?
© Pgiam / istock

20. global trends:
freedom vs the level playing field: ocean
governance
what’s happening now
• International governance from UN,
WTO and similar bodies has been a
fundamental influence on global trade
• Progress can often be slow (at the
speed of the slowest)
• Emerging economies are playing their
part and supporting global institutions.
© Hanquan Chen / istock

21. global trends:
freedom vs the level playing field: ocean
governance
possible futures
Consolidation & reform Regionalisation of Collapse of global
• A more even, governance governance
multipolar world • Changing rivalries • Erosion of
helps international and coalitions international
institutions flourish. undermine frameworks in the
• Approaches may international face of major
change to reflect governance economic
increasing Asian frameworks leading difficulties, resource
power and to a patchwork pressures or war.
governance styles. world. • Characterised by
• Frustration with slow protectionism ,
progress eg at IMO patchwork
or UNFCCC results regulation and
in more unilateral increased potential
regional action. for conflict.

22. global trends:
freedom vs the level playing field: ocean
governance
implications for shipping
• Consolidation and reform: an ambitious IMO would benefit the industry, providing
long term certainty, planning and investment.
• Regionalisation implies a patchwork of governance. A 2-tier industry could develop,
with strong performers navigating complexity to access all markets, while poor
performers confined to weakly governed areas.
• Collapse: the industry could face piecemeal militarisation or
no-go areas and increasing security costs.
• How can we get a co-ordinated
voice for leadership that
influences the future of global
governance and policy in a
progressive way?

23. global trends:
no secrets: demand for transparency
what’s happening now
• Technology now allows radical
transparency – eg Wikileaks
• Demand for ethical business practice
through the whole supply chain now
mainstream
• Business can facilitate transparency by
making real time monitoring data
available – or have it imposed on them
by crowd-sourced revelations
© CreativeFire / istock

24. global trends:
no secrets: demand for transparency
possible futures
Ubiquitous transparency Paranoid information Draconion secrecy
• Big institutions wars • Some regimes limit
accept that • Misinformation access to
transparency is becomes a weapon information, as with
unavoidable and as entities seek to Google in China and
work with the grain confuse and obscure Twitter in Libya.
of people power. to maintain obscurity • Information access
• Enhancing ethical or secrecy becomes polarised
practice in business, between the
though the risk of connected informed
misinformation and the isolated
remains.

25. global trends:
no secrets: demand for transparency
implications for shipping
• Consumers will expect shipping to collaborate in achieving corporate responsibility
goals, and may result in a proliferation of voluntary standards
• Varying demands could create divergence between markets and sectors –
containers associated with brands may need higher standards than bulk carriers.
• Key tools such as EEDI will enable customers to select shipping lines on the basis
of fuel/emissions efficiency
• Technology makes complete transparency of performance
possible, even on the open ocean.
• What changes would the
industry need to make if its
emissions, pollution incidents,
working conditions were completely
open to scrutiny?
• Who would the winners and losers be?
• How can voluntary standards be made
uniform?
© Nicholas Monu / istock

26. global trends:
beyond oil – the future of energy
what’s happening now
• The age of easy oil is over. Crude
prices have shifted fundamentally, with
increasing volatility and uncertainty.
• The view that there could be a
production peak or even decline as
early as 2020 is entering the
mainstream.
• There are many efficiency technologies
and alternative propulsion means
throughout transport, but none have
yet become mainstream.
© istock

27. global trends:
beyond oil – the future of energy
possible futures
Planned transition Strained stagnation Peak oil crisis
• Global transport • Weak policy allows • Real decline in oil
systems invest in an oil supply plateau production as early
new propulsion to result in as 2020, faster than
technologies well confusing, volatile transport systems
before any supply price signals. adapt and destroying
crisis. • Growth constrained market confidence.
• Orderly transition in and market • Possible scramble
20-50 year confidence in low- for dirty alternatives
timeframe. carbon alternatives “at any cost”
undermined. • Diplomatic, trade or
• Prices ratchet military conflict over
higher, with the least remaining resources
efficient companies
going to the wall.

28. global trends:
beyond oil – the future of energy
implications for shipping
• Shipping faces the combination of oil crunch, climate action and new sulphur
regulations, which combine to challenge continued bunker fuel use.
• The winners will be those who manage a planned transition to an efficient, non- or
low-fossil fleet. Slow moving competitors risk strained stagnation.
• Possible special circumstances for the industry – as the lowest energy freight
mode, shipping becomes a privileged “residual user of oil, while prices
actually decline due to reduced land based demand.
But it is risky to bank on this outcome.
• How is the industry prepared for the
combined impact of oil crunch,
sulphur limits and climate action in the
2020s?
• What are the opportunities if oil prices
spiral upwards?
© Mayumi Terao / istock

29. global trends:
demanding higher standards: sustainability
regulation
what’s happening now
• As countries develop, they demand
higher standards of environmental care
and worker welfare, and awareness
and concern increases.
• Well established legal and
technological approaches have
enabled and enforced cuts in key
pollutants and wastes and
improvements in working conditions.
© Alfredo Tisi / istock

30. global trends:
demanding higher standards: sustainability
regulation
possible futures
Clean is the new dream Divided and dirty
• Globalised business face a more • Populations are divided, with the
stringent but more even least well off forced to live with
regulatory framework, and the waste and pollution of the
extend clean “developed” world better off.
practices worldwide. • Legislative standards vary
• When combined with resource globally, but resource issues
constraints this could support could still support more closed
more closed loop production. loop/reuse processes.
© David Cannings-Bushell / istock

31. global trends:
demanding higher standards: sustainability
regulation
implications for shipping
• Regulatory pressure is likely to increase for both existing and new issues,
following trends in land based legislation.
• Moves to closed loop systems will affect volumes of trade and shipbuilding
practices.
• In a divided and dirty future, a patchwork of local and regional
regulations is likely, with standards high in some areas, low or
non-existent in others. Shipping faces a two-tier regulatory
landscape making it hard to plan ahead effectively.
• What level of investment and rate of
change would be required to meet
regulations with emissions levels
equivalent to land-based transport by
2040?
© Island Effects / istock

32. global trends:
advancing technology – making it pay
what’s happening now
• Phenomenal growth in ICT based
technologies
• More sustainable technologies such as
cleaner production and renewable
energy now common, but not yet
mainstream.
• The key difficulty with clean
technologies is uptake, rather than
technical barriers.
© DNV/Nina E. Rangøy

33. global trends:
advancing technology – making it pay
possible futures
Stagnating Tipping point Dreadnought Forced change
vulnerability • Incremental moment • Much faster
• Minimal change change on a • a leader puts a change driven
making poor piecemeal package of by regulation or
use of new basis, until the technologies market change
approaches. approach as together that e.g catalytic
• Vulnerable to critical mass defines a new converters,
competition or and becomes standard e.g. double hull
external the way to do Dreadnought tankers
change e.g US things e.g. battleship,
car industry containerisation Apple Ipod
© istock © Nicholas Monu / istock © istock
© ricardoazoury / istock

34. global trends:
advancing technology – making it pay
implications for shipping
• technology is both a trend-driving change in its own right and a solution to the
other challenges
• Key technology areas include energy/carbon efficiency, ICT-based operational
efficiency measures, and environmental emissions treatment.
• Stagnating vulnerability is arguably the default position of a
conservative industry, leaving large parts of the industry
vulnerable to the other megatrends.
• Will shipping be subject to the kind
of step change in sustainable
technology that has been seen in
the automotive and aviation sectors?
Who would lead this step change?
• How can the industry realise the
benefits of new, sustainable tech?
• How do we future proof today’s new
ships?
© Cargill SkySails

35. global trends:
adapting to a changing climate
what’s happening now
• Measured climate change is already
equal or more than the worst case
IPCC projections
• Impacts assessed as likely include
• drought,
• agricultural yield falls,
• more frequent extreme weather,
• sea level rise,
• major areas of biodiversity loss eg
in rainforests, coral reefs;
• ice-free arctic in summer.
© DNV/Nina E. Rangøy

36. global trends:
adapting to a changing climate
possible futures
Efficiency first Tough measures
• Planned innovation in energy • Global economy struggles to
efficiency and renewables cope with the scale of
• Little need for changes in lifestyle environmental change
or reduction in trade • Globalisation retreats, countries
focus on security and
protectionism to access
resources at any cost

37. global trends:
adapting to a changing climate
implications for shipping
• Trade growth could be curtailed as protectionism affect the global economy
• New cargo movements - water could become a major new cargo. Increasing
migration/environmental refugees could present security challenges for the
industry.
• Weather and climate challenges likely to change shipping routes. Potential
adverse insurance implications.
• Tough CO2 emissions controls: Compulsory carbon taxes and trading now
underway in the EU, California and China.
• How will shipping play its part in
achieving a global CO2 emissions
reduction of 50% while halving impact
would require a 75% cut in emissions
intensity?
• What are the financial implications of
the opening of the arctic vs. increased
storm risk and a changing navigational
environment?

38. Find out more:
www.forumforthefuture.org/projects/sustainable-
shipping-initiative
To sign up to the SSI mailing list send an email
to ssi@forumforthefuture.org
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