Decoding shipping’s ESG era ahead of EU’s landmark CSRD reporting rules
The European Sustainability Reporting Standards (ESRS) and the related Corporate Sustainability Reporting Directive (CSRD) are coming into effect as early as January 2024 – are you ready? To succeed in the ESG era, companies will need to make the most of their data to optimize and improve operations. Electronic logbooks can help them do just that.
Shipping is sailing towards a labyrinth of regulations. New rules like the European Sustainability Reporting Standards (ESRS) and the related Corporate Sustainability Reporting Directive (CSRD) will introduce new requirements for an unprecedented number of companies to report on their social and environmental credentials.
This is part of what was described as an “avalanche” of disclosure rules by Position Green, an ESG advisory firm that also reported a mere 66% readiness for the new regulations among Nordic-listed companies. But this is only part of the picture. Many shipping companies are still not aware that they are part of the approximately 49,000 EU companies that will have to comply with these new regulations in the near future.
The system will be deployed in four phases, starting in January 2024 for companies already reporting under the Non-Financial Reporting Directive (NFRD), before being expanded to large companies the following year, listed SMEs from 2026, and some non-European entities two years later.
With only a few weeks left before the roll-out of the new reporting requirements begins, the industry needs to prepare for a fundamental shift in how it operates. With a move towards greater accountability, the phasing in of CSRD will bring greater scrutiny to how companies measure and perform against key metrics.
But even before they fall under the scope of CSRD themselves, the long hands of ESG are already pushing for shipping companies to introduce greater transparency and accountability in their operations. Importantly, the CSRD requires Scope 3 reporting so, as more companies fall under the legislation’s remit, they will increase pressure along their supply chain to collect validated and comprehensive sustainability data for their own reporting.
Moreover, leading publicly listed companies, namely cargo owners like IKEA and Amazon, have already committed to reporting on their Scope 3 emissions to provide additional information on their ESG credentials to their customers. Shipping, which transports 90% of the world’s trade, will inevitably have to step up its data collection and reporting to its stakeholders as a result.
The question then is, what needs to be done to enable the maritime industry to navigate this maze successfully?
The truth is in the data – if you can collect and integrate it
For many organizations, the crux of the challenge is finding efficient ways of collecting, integrating and analyzing the data they need for ESG reporting, be it under CSRD or other regulatory frameworks elsewhere in the world.
The good news is that many companies are already collecting much of the data they need, through environmental, engine and operational logbooks. The bad news is that too often, this information is stuck on paper logbooks or Excel spreadsheets, PDFs and emails – resulting in fractured datasets that increase workloads for crews, while being unsuitable for in-depth analysis.
As ESG reports become a part of companies’ annual reports, the need to activate this data increases. Freeing up this information is tied to a more structured and systematic way of compiling, managing, and interpreting data. Digitizing and integrating critical onboard information through electronic logbooks is therefore an obvious first step.
Introducing electronic logbook solutions, like NAPA Logbook, can improve data recording, integration, reporting and analysis to standardize the process, avoid duplication, break down data silos and unlock new insights to benchmark their ESG performance. This will enable organizations big and small, owners and operators, to speed up the data collection and reporting process and minimize clerical workload, reporting efforts and errors.
What can we capture
NAPA Logbook helps kill two birds with one stone – enabling ESG reporting while also supporting all existing Nautical and Technical Regulatory Compliance. This includes various regional compliance, flag state and IMO-mandated reports, from SOLAS and MARPOL to Ballast Water. Alongside NAPA Logbook is the Regulatory Reporting Module in NAPA Fleet Intelligence to enable one-click reporting on CII, EU-MRV and IMO-DCS.
On the ESG side, NAPA Logbook captures data covering environmental and social metrics, as well as other operational activities.
Because NAPA Logbook can be tailored to gather data on any aspect of operations, it is the perfect tool for organizations to prepare for EU CSRD. From vessel-performance-related data on bunkering and stability, to equipment safety and maintenance, heating, ventilation and air conditioning (HVAC) efficiency, people and cargo flow onboard, and resource management – the possibilities are manifold. Some metrics include:
- Emissions and energy consumption
- Air quality
- Waste management
- Water and wastewater management
- Discharge management ecological parameters
- Environmental management
- Passenger and crew safety and security
- Various equipment status for passenger safety and security
Other operational metrics
- Number of shipboard employees
- Available passenger cruise days
- Aggregated incident metrics
- Vessel port calls data
Seizing the ESG opportunity
Beyond reporting and compliance, the operational data collected in NAPA Logbook is an opportunity to improve a fleet’s performance on those environmental, social and governance criteria.
By bringing the different data streams together, we can unlock actionable insights to help companies improve a broad range of KPIs, from greenhouse gas emissions, NOx and SOx emissions, ballast water and deadweight management to waste and grey water management.
In addition to regulatory logbooks, data on everything from fridge temperatures to sanitation logs, hygiene logs, and hospital logs, can be included – depending on what the company wants to measure and improve.
Common wisdom says knowledge is power, and there’s no better example than the value of data to help organizations gain a full-picture understanding of their operations. The benefits of this extend across the value chain, opening new opportunities to positively position businesses, minimize emissions and increase the capital-raising capacity of companies.
With several reports comes one, integrated solution to enable standardized record-keeping and built-in reporting. With access to reliable, verified and real-time data, organizations can tap into new avenues to boost safety standards and remove inefficiencies. In decoding shipping’s ESG era, digital solutions are the backbone of more efficient, safe, sustainable and profitable operations and are helping turn obligation into opportunity.
Want to know more?
Our experts would love to share how NAPA can help you with your ESG and ship operations data. Or, you can also start by reading more about our NAPA Logbook solution.