Executive Foreword
CEO Foreword
time. In 2021, our short-term response to these challenges has matured and resulted in lasting benefits for our people. More recently, the tragic events taking place in Ukraine have had a negative impact on global crew sourcing from both Ukraine and Russia, which combined make up approximately 15% of the global seafaring pool. A significant proportion of our crew is sourced from Ukraine and as such, we’ve made an effort to accommodate our seafarers’ requests, in terms of increased communication access and early (or extended) relief. We are deeply concerned about the well-being of our seafarers and their families and have commenced an initiative to support them, and their families, with transportation, temporary housing and by other means in order to help them during this difficult period. In the longer term, V.Group remains committed to supporting the IMO’s 2030 and 2050 targets for reducing GHG emissions in the shipping industry. We believe data driven decision making and transparent reporting are fundamental to the execution of our sustainability approach. ShipSure, our global ship management digital platform enables monitoring, managing, and reporting ESG related KPIs, including energy efficiency and health and safety metrics. V.Group’s high organisational strength and resilience built by our outstanding personnel stands us in great stead to tackle the challenges presented by the current heightened geopolitical environment. In addition, we have partnered with McKinsey to exclusively provide solutions to the decarbonisation challenge utilising the Fleet Decarbonisation Optimiser (FDO) which provides the most rigorous, fact-based perspective on the economics (e.g., capex, opex) and decarbonisation benefits of over 100 different ship efficiency upgrades, engines, and fuels. It is built on top of the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping’s NavigaTE total cost of ownership (TCO) model. The recommendations are stress-tested against a few scenarios that reflect the uncertainty on regulations, economics of alternative fuels, financing landscape, etc. The results are endorsed by the experts of the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping as the best possible recommendation to meet a given decarbonisation target given what we know today about how different solutions will evolve. V.Group are proactively looking to the future, driven by the recently introduced IMO legislation. Our intention is to listen to our customers’ ESG ambitions and to utilise our diverse in-house Marine Services capability to provide eco solutions for existing tonnage, which is a differentiator where we can tailor packages for customers to enable cost efficient and energy reducing data supported decision making.
As the industry begins to build back after two turbulent years, it seems right to pause and reflect on what we can learn from these times, and how we can use this opportunity to grow: to become more resilient, safer, and in-step with the sustainability-driven change we all are experiencing. I am proud of the spirit of enthusiasm in which the Group has embraced this chance. We have reinforced our ambition to be the partner of choice in the industry – the ability to tackle and engage with ESG matters head on is what we believe will be formative in the years to come. To this end, not only am I encouraged by the progress we have made in the short time we have collected and disclosed metrics through our ESG reports, but I am heartened by the sheer ambition of the Group. Some hard numbers to back up this progress – in the past year emissions have fallen 16% per mile travelled compared to 2021; the number of marine casualties has fallen by 42%, and deficiencies and detentions have fallen 21% and 61% respectively – none of the above can be considered a mean feat, as our bar has always been high. Improvements like these are a credit to my colleagues across the globe. Thank you all for your work in the last year. In the past year we also conducted out first Task Force on Climate-Related Financial Disclosure (TFCD) session and began to implement improvement strategies to align with its recommendations – a report of our climate risks and mitigation strategy can be found on page 16 of this document. We found this process incredibly fruitful and encourage our peers to start out on the journey have they not already done so - we have an ambition to lead the industry, but others have a duty too, to follow in improving and bringing the whole industry up in the eyes of our shared stakeholders. Not only does this process demonstrate to stakeholders and partners that meaningful steps are being taken in a holistic risk management process, but it has helped us identify gaps in our climate-resilience and articulate our strategy to rectify them. In this reflection of the last two years, I have noticed the speed in which ESG matters have begun to formalise. When we started on this journey it was on a voluntary basis, now numerous global mandates, as well as business partners, are demanding a level of disclosure we would not be prepared for had we not been ahead of the curve. In this spirit we are continuing to lead the industry, knowing that the granularity and depth of disclosure will only increase. We have started the process of full GHG verification, including conducting a study on how to qualify and capture our Scope 3 emissions – a task that has not yet been done in the industry. Further to this, we have voluntarily commissioned the development and implementation of a framework to increase the robustness of our supply chain due diligence – again, the first in the industry to do so.
This report is our third comprehensive and stand-alone sustainability report which provides an opportunity to reflect on our ESG journey so far and look ahead to the challenges we face in the short, medium and long term. This year we have decided to go one step further with our voluntary reporting by incorporating the Task Force on Climate- Related Financial Disclosure (TCFD) framework. Using this framework, we were able to identify and transparently articulate what ESG risks and opportunities are of primary importance to our company, customers and stakeholders. In materiality sessions, topics such as carbon markets, future energy mixes, sea level rises and infrastructure resilience were considered, as well as how these might impact us both directly, and indirectly through clients. These risks and opportunities were structured in a prioritised manner, facilitating the optimisation of our efforts to enact positive change across the full ESG spectrum. A key development in 2021 was our decision to partner with the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping to help the industry transition to a net zero future. To support this partnership, we have established a dedicated function, Sustainability & Decarbonisation to position V.Group firmly at the forefront of a zero-carbon maritime future, in line with our stated strategic objectives within ESG. In the past, environmental issues have dominated ESG discussions in the shipping industry. However, the Covid-19 pandemic and ever-increasing regulatory environment have resulted in a more balanced sustainability landscape. Identifying and addressing risks and opportunities across the ESG spectrum are at the core of V.Group’s business strategy. This includes our responsibilities to our communities and people, the environment, and the governance systems that facilitate the functioning of our business. Our response to the challenges we have faced in recent years, most notably the Covid-19 pandemic and IMO regulations, is testimony to the resilience and agility of the sustainability framework we have implemented and our ability to not only overcome such challenges but thrive when doing so. Balancing the interests and expectations of all our stakeholders, including investors, employees, customers, suppliers, and communities is never easy but we believe our sustainability strategy is key to striking this balance and creating long-term value. Our number one priority is the health and safety of our people, including the thousands of seafarers onboard our managed fleet. This is not a compliance exercise or a sustainability strategy – this is “Safety first, no compromises”. In 2021, we lost 3 valued crew members in work-related incidents. A single fatality is one too many, and these losses were genuinely felt by colleagues. While we continue to assist and support the crew members’ loved ones through these times, we know that we cannot make such a loss easier. Our thoughts remain with those affected by these losses. We have a strict ambition of zero accidents or harm to the environment. More than anything, this is our guiding principle. Shipping has its risks - we must continually strive to ensure we do everything we can to minimise them. These 3 fatalities were fully investigated, and all lessons learned were communicated to other seafarers. We will continue to strive to get all colleagues home safely. The Covid-19 pandemic has placed great demands on our people, none more so than our seafarers, and we are extremely grateful for their hard work and dedication during this challenging
We know these issues are coming, and we fully intend to be there, prepared, for our clients when they need us to support them. In November 2021 V.Group partnered with the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping to help the industry transition to a net zero future. As part of our commitment to the partnership, we work closely with the team at the Center in Copenhagen to support their work and provide practical guidance regarding safe solutions to achieve decarbonisation aims. As a strategic partner, V.Group intends to support its customers in the use of transition fuels, including green ammonia and hydrogen, in anticipation of a stricter regulatory climate. V.Group makes several of its marine specialists available to the Center in Copenhagen to provide insights about the operational practicality of proposed initiatives in a live setting. To support this partnership, we have established a dedicated function, Sustainability & Decarbonisation to position V.Group firmly at the forefront of a zero-carbon maritime future, in line with our stated strategic objectives within ESG. Today, and increasingly in the future, we will be relied upon to lead the way towards lowering carbon emissions through adoption of pioneering and transitionary fuels, new technologies, digital practices, improving compliance and reporting standards etc. Moreover, while today command of ESG is a factor of differentiation, tomorrow it will become table stakes for commercial relevance with shipping clients, just as safety is today. While we do not have all the answers, we are making progress. Perhaps the industry is hesitant to develop as we think that the task it too large to comprehend. But, in truth, the task we all face, together, can only be tackled in daily advancement. There is no silver bullet. The past few years on this journey has taught us that clarity is the best place to start for more meaningful development. This clarity has given us the ability to determine how to move forward: how to create open and informed communication, both internally and with our clients on how to progress ESG matters on our terms. Although we are still learning, we are moving in the right direction: surefooted that we are building a safer, more efficient company. A company that will remain at the forefront of the industry for the years to come – and one that will deliver for all our stakeholders.
Matt Dunlop Director of Sustainability & Decarbonisation Secondee to the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping
René Kofod-Olsen CEO V.Group
2 | Executive Foreword
CEO Foreword | 3
Made with FlippingBook Proposal Creator