CMA CGM receives 4.5 stars out of 5 on environmental reporting
CMA CGM has prepared the largest Sustainability Report (it still calls it CSR Report) among all the liners. It is true that some of the pages, mainly at the beginning, have significant empty space, but, nonetheless, 168 pages are quite a large number. The pattern in most reports is that companies boast about their sustainability achievements; however, the language of CMA CGM report is more grandiose, almost Napoleonic. Leaving outside the length and the tone, which are secondary for our independent reviews, we find some important findings in CMA CGM report: the clarity in which explains its main environmental concerns, its commitment of not transiting the Northeastern Sea Route, the numbers about specific improvements to its vessels, and in particular the calculation of its Scope 3 GHG emissions. Gliese Foundation, therefore, considers that CMA CGM deserves 4.5 stars out of 5 on its environmental reporting.
Most of the liners become entangled in something as easy as to define the main areas of concern of their environmental policy. That may be due to the preparation of the materiality matrix because there tend to appear five, six, or seven environmental issues, some of them repeated under different but very similar names, such as energy, GHG emissions, and climate change. Once that first mistake is made, the confusion continues when dealing with the Sustainable Development Goals (SDGs) and the environmental policies that the companies are taken later on. CMA CGM solves that issue effortlessly and straightforwardly: "The CMA CGM Group's environmental policy is built on three strategic concerns: a) climate change: improving the carbon footprint of Group activities, b) air quality: reducing atmospheric pollution, and c) ecosystems: protecting the oceans and marine biodiversity." Three precise and swell define topics. It seems obvious, isn't it, but believe it or not, most of the liners cannot find that simplicity as CMA CGM does in just a few lines.
It is interesting and, at the same time, disappointing to observe how CMA CGM tries to offset its strong commitment to LNG with the inclusion of biofuels. That is a leitmotiv that is repeated several times along the Sustainability Report. Let's see one of those cases: "Launch of the CMA CGM Jacques Saadé. A world first: the largest LNG-powered container ship in the history of maritime transport was launched in Shanghai on 25 September 2019. Bearing the name of the Group's founder, the CMA CGM Jacques Saadé is entirely powered by liquefied natural gas and has a capacity of 23,000 TEUs (twenty-foot equivalent unit). This feat of engineering illustrates CMA CGM's commitment to the energy transition." And immediately after it comes the biofuel part: "CMA CGM is adopting marine biofuels at an increasing rate. CMA CGM chose Shell as its supplier of several thousand tonnes of second-generation biofuel derived from used cooking oil. CMA CGM Group vessels will be able to sail approximately one million kilometres with biofuels. With this choice, the Group reaffirms its role as a pioneer in the use of sustainable, eco-friendly solutions for the energy transition in the shipping and logistics industry." CMA CGM knows well that LNG will never be the carbon-neutral solution that the shipping industry is expecting. Most experts on the field, such as Tristan Smith, the scientific mind behind the Getting to Zero Coalition, have been quite critical of the LNG approach. Given that its primary short- and medium-term solution to reduce CO2 emissions is LNG, CMA CGM tries several times to present this fossil fuel almost as if it were a green fuel, which it is not at all. In other words, the only way one can interpret the leitmotiv of the LNG-biofuels sequence is that CMA CGM tries to compensate for the evident lack of "greenery" by the LNG vessels with cooking biofuels, which are green solutions, indeed. Of course, how could you compare the decision to add a queue of mega LNG-powered (the Jacques Saaqde was only the first one) boxships with one trial (or even if there were more in the future) of biofuel for Ikea? It is almost like comparing a whale with a salmon.
After that disappointing approach, CMA CGM scores a great hit—as MSC and Hapag-Lloyd have also done—by its commitment of not using the Northern Sea Route, a decision that, by the way, Maersk has been reluctant to take it: "CMA CGM decides not to use the Northern Sea Route. A forward-thinking choice for biodiversity protection in the Arctic and more generally planet-wide. The Northern Sea Route, a channel between Asia and Europe that follows the polar coasts of Russia, has become navigable due to glacial melting from global warming. Teeming with unique biodiversity that is only partially understood, the Arctic plays a crucial role in regulating currents and the global climate. Massive use of the sea route would pose real danger to the outstanding natural ecosystems of this part of the globe due to the risk of accidents, oil pollution, and ship strikes to dolphins and whales. To avoid endangering this fragile environment even further, Rodolphe Saadé has decided that none of CMA CGM Group's 500 vessels will take the Northern Sea Route. With this decision, CMA CGM takes a definite stand to protect the environment and global biodiversity despite the competitive advantage that this route would represent for maritime companies." The latest sentence is an implicit but overwhelming statement against Maersk and COSCO: the former is still evaluating what decision to take while the latter has already highlighted its decision to use that route.
We also find of interest that regarding all the battery of measures that liners use to improve energy efficiency and reduce fuel consumption, CMA CGM does not limit itself to only mentioning the actions (e.g., modification of bulbous bows, replacing propellers), but it also provides the numbers of vessels that have passed the "surgery" while at drydock: "In 2013 CMA CGM launched a programme to optimise its owned fleet primarily by modifying its bulbous bows. These changes were done in dry dock and help to maximise the ship's hydrodynamics at the speeds used in our company. Some 64 ships have been modified, in addition to new builds. This innovation can cut fuel use and carbon dioxide emissions by 5-10%. Additionally, there is a programme to switch out old propellers for energy-efficient ones. In 2019, 20 propellers were changed. In 2018, the Group introduced a programme to install recovery boilers for auxiliary engines (as for the main engine). Instead of burning oil to produce the necessary steam, the boilers recover heat from the auxiliary engine exhaust gases, even when the main engine is shut down. This technology has been installed on 21 vessels." Those three numbers: 64, 20 and 21 make a significant difference with most liners' reporting, in which you only have words, not numbers.
One of the best contributions of CMA CGM (only Maersk does the same) is the estimation of its Scope 3 emissions. The other liners do not mention those emissions or only say that they will estimate them in the future. It is well known that Scope 3 emissions are the most difficult to calculate and could significantly change the companies' GHG emissions profiles since the "buried" Scope 3 emissions come to life to "haunt" their reported climate change trajectories. CMA CGM concludes that 16.5% of its total emissions are Scope 3. It must be highlighted that CMA CGM goes to great lengths to explain how it calculated those emissions; here is just the beginning -the two leading causes: shipbuilding and container building- of the corresponding section in the methodological section in the annex:
"Definition of Scope 3 Scope 3 emissions are emissions resulting from ship- and container-building, on-board solid and liquid waste, employee business travel, fuel oil consumption before and after maritime shipping, and upstream bunker production and transport. Ship building: For each vessel built in the year, we consider the light displacement (excluding ballast, fuel, oil, cargo) in tonnes and we apply an emission factor of 1.75 (1.75 tonnes of carbon dioxide emitted to produce 1 tonne of steel). Container building: For all the containers built during the year on behalf of CMA CGM, we consider the empty weight (tare weight of a twenty-foot container = 2.2 tonnes) and we apply an emission factor of 1.75 (1.75 tonnes of carbon dioxide emitted to produce 1 tonne of steel)." And CMA CGM continues with solid and liquid waste, employee business trips, and fuel oil consumption before and after maritime shipping.
Below is the table with the GHG emissions by CMA CGM. As we have said in previous reviews, once we release the reviews for the 12 largest liners, we will publish some additional ones on some critical cross-section issues such as the GHG emissions, the treatment of SDGs, or the materiality assessments, since, as the reader may expect, the results among such similar companies (same line of business, different sizes) are not as homogenous as one would expect.
We have not mentioned much about biodiversity and waste and recycling in previous reviews, mainly because information tends to be short and scattered in most of the reports. For us, there is no doubt that CMA CGM performs one of the best treatments of such topics. By the way, it is interesting to read the comment about the dismantling of three of its ships during 2019: "In 2019, three Group vessels were sent for dismantling to an internationally-certified site." What a pity that the names of the shipyards were not mentioned.
In summary, CMA CGM has produced an extensive and comprehensive Sustainability Report. Its large extension -just the environmental sections has twenty pages- allows to cover with greater detail than most companies all the different topics on climate change mitigation, air pollution, and biodiversity. The estimation of Scope 3 emissions is an important addition that all other liners, except Maersk, do not include. One misses CMA CGM absence from the Getting to Zero Coalition (undoubtedly due to its decision to bet for LNG), and also from the disclosures of the Task-Force on Climate-related Financial Disclosures (TCFD), but even if the company does not belong to the most aggressive shipping initiative on decarbonization or tackle climate change adaptation issues, it does a great job on the side of climate change mitigation. Without mentioning it, CMA CGM shows that it is a company headquartered in the country where the Paris Agreement was signed. That is why Gliese Foundation considers that CMA CGM deserves 4.5 stars out of 5 on environmental reporting.
Gliese Foundation
November 28th, 2020
research@gliesefoundation.org