Using Digital Innovation to Promote Environmental Sustainability

Tres looks closely at how large companies use vessel performance solutions like TVA to support ESG initiatives.

Background

As a former management consultant, I spend a lot of time observing how companies communicate with their shareholders/investors, customers, employees and other stakeholders. Consistently, leaders rally these groups around key strategic themes, which are intended to establish credibility of the business and promote a set of differentiation factor(s) that make it unique. These themes often tie into the corporate vision, mission and strategy.

There is relatively little differentiation in how public and private (usually with institutional ownership) companies position themselves among these various stakeholder groups. Messages around financial stability, market growth, strong customer base and competitive differentiation abound. In the shipping industry, these themes are often combined with messages about safety and asset quality/age/utilization.

The divergence among public and private companies has more recently been in the areas of ESG – Environmental, Social and Governance. Across sectors, investors are scrutinizing messaging in public filings, annual reports, investor presentations, industry forums and various other channels to understand how companies are different in this area.

When you combine this industry agnostic investor scrutiny with increasing environmental regulation in the maritime industry, shipping companies are under a microscope when it comes to how they are tackling environmental challenges of today. Thus, the “E” in ESG has become extremely important.

There is certainly a legal/regulatory obligation to uphold by promoting environmental sustainability initiatives but also a potential benefit. Research indicates that publicly traded companies who promote ESG initiatives are seeing an improvement in share performance, particularly as the climate debate and environmental concerns heat up.

As you can see from the image below, notable ship owners are beginning to embrace this, promoting environmentally focused initiatives to investors (and customers).

 

The Ship Owner Opportunity

Forward-thinking ship owners have used technology to increase the technical, operational and commercial efficiency of their ships. Those that additionally streamline data collection and integrate systems and hardware have put themselves at the forefront of the digital evolution in the industry. The impact of these efforts has positively impacted energy consumption and productivity, but also emissions reduction.

We see an opportunity for owners to tout this innovation to investors and tie it into environmental sustainability efforts, “using digital innovation to reduce fuel consumption and emissions”. This vision should be tied to a key theme that promotes a culture of environmental responsibility and performance.

For example, International Seaways has successfully used Tres Vessel Analytics (TVA) to support its “Get to Green” campaign, which is focused on reducing the company’s environmental footprint and improving the efficiency of its fleet. It has become a theme that the entire organization has rallied around. The company’s strategy had a clear objective and leaders took clear steps to achieve this.

We learned from these successful programs and devised a simple approach for achieving fuel efficiency and emissions reductions goals.

International Seaways followed a similar approach and the enthusiasm of the crews in tackling the challenge has showed, as have the results.

We recommend all of our ship owner customers to adopt comparable programs. The key to getting the most out of this strategy is internal alignment and maintaining momentum. Tangible benefits will surely follow.

Conclusion

Regulation doesn’t always have to be a bad thing. The best companies have used this to help drive operational improvements while also doing their part to reduce their environmental footprint. These efforts will only serve to differentiate owners, both in financial markets as well as with charterers.

Regardless of whether you are a private or public shipping company, there are plenty of opportunities to leverage this approach to improve your operations.

Do you want to learn more about how to use digital technologies such as TVA to support ESG initiatives? Tres can help you develop your efficiency communications strategy and simultaneously ensure an effective approach to improve vessel performance and reduce emissions from your fleet.

If you would like to learn more about Tres’ approach to supporting customers with fuel reduction and environmental sustainability initiatives, please click here or email connect@tressolutions.com.

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