HMM receives 2.5 out of 5 stars on environmental reporting
Only two companies released their Sustainability Reports for the year 2019 in February of this year: HMM and Maersk. Of the other twelve largest container carriers, the rest released their reports between March and September, with two, ONE and PIL, having not prepared theirs (or at least having not released them even though we are already in October). Between HMM and Maersk, there is a "small" difference, however; well, that difference also applies between HMM and all the other eight that have published a Sustainability Report for the year 2019: while Maersk and all the others covered the period from January 1st to December 31st, 2019, HMM report's only covered from January 1st to June 30th, 2019! That cannot be: a year has twelve months, not six. This is the main reason why we cannot give to HMM more than 2.5 out of 5 stars. All companies must be evaluated under the same rules, and it is evident that HMM is not following them in something so critical as the period that should be reported. Its 2019 report is barely half-2019 report.
It is a pity that HMM did not report for the entire 2019 because one can see from its report that it is one of the few shipping companies with the bold commitment to become carbon neutral for 2050. Most companies tend to endorse the modest level of ambition of the IMO's strategy of reducing CO2 emissions for the year 2050, equivalent to 50% of the emissions reported during 2008. Other companies commit to some higher levels, but very few are the ones that declare that they will be carbon neutral for the year 2050—and HMM is one of them. One could be cynical and argue that any company can commit to being carbon neutral in 2050 since that date seems far away, mainly if, like in the case of HMM, it does not go into specific details about how it will reach that goal. That is true if the company only provides the long-term goal; however, any serious company—and HMM is a serious company—knows that by committing to a long-term goal for 2050, it must also provide ambitious goals for interim years. That is the only way to be credible, and HMM indeed commits to ambitious goals not only for 2030 but even more ambitious for this year: it expects to reduce CO2 emissions by 70% for 2030 compared to the levels of 2008, and by a very ambitious 60% reduction (again with 2008) for 2020! That is going to be the litmus test for HMM. That is why one cannot be cynical in the case of HMM.
Contrary to other companies that mention only a few of the improvements they are making to their vessels to reduce fuel consumption and CO2 emissions, we found it relevant that HMM listed many of the measures. They are the following: a) Operation efficiency: weather routing, trim optimization, performance monitoring, slow steaming; b) Hull resistance: hull optimization, bow modification, hull/propeller cleaning, hull coating, micro bubble; c) Engine efficiency: M/E de-rating, electric engines, T/C cut off; d) Propulsion efficiency: pre-swirl stator, Mewis duct, propeller boss cap fin, rudder fins; d) Others: WHRS, shaft generator, LNG fuel engine, homogenizer, energy saving system, alpha lubricator, LED lamps, mass flowmeter, additives, etc. While the inclusion of what appears a full list is commendable, and while a few of the measures must be applying to the entire fleet (e.g., weather routing, trim optimization, slow hull/propeller cleaning, steaming, LED lamps), it is obvious that there are other measures that HMM must be applying to some of the vessels only (e.g., bow modification, microbubble, Mewis duct, LNG fuel engine). Given this fact, it would have been important that HMM reported the number of vessels having those modifications or characteristics, if not precise numbers at least in gross ranges such as most of the vessels, about half of the vessels, only a few of the vessels, or so.
We value that HMM has carried out a materiality assessment, joined green shipping initiatives, applied several environmental ISOs, endorsed the sustainable development goals (SDGs), and received different environmental awards. However, all of them are the new minimum in the container carrier industry in the 21st century. In other words, while in the past, the minimum was the compliance of MEPC regulations; nowadays, when the environment and, in particular, climate change, has reached much higher levels of importance, one expects that most large shipping companies are "complying" with these new non-IMO requirements. In the case of the SDGs, we must add that HMM only lists the 17 SDGs, but it does not go a step further (as some other companies do) of trying to explain how it is impacting in some of the 17 SDGs; and besides, let's be frank, no shipping company (and almost no company in the world) can claim that its actions are impacting all of the 17 SDGs. Other environmental issues, such as ballast water and scrapping of vessels (with the corresponding future requirement of keeping an inventory of hazardous materials), are also mentioned in HMM's report.
In summary, we regret that the HMM report included only half of the 2019 year. We do not understand the rush in releasing its report: HMM could have taken a few months more if needed, but it should have released it until all the data was available. We value the high ambitions of HMM regarding the reduction of CO2 emissions. Let's hope that next year, the company will elaborate more on how it expects to be carbon neutral by 2050; or if it is relying mainly on what the Getting to Zero Coalition may propose, it would be important to know its financial commitment because it is clear that just a membership will not be enough (Maersk, for instance, has created the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, as one of its contributions).
Gliese Foundation
October 20th, 2020