About
Aiming to promote decarbonisation of international shipping, the four principles commit the signatories to:
- Assessment: Annually measure the carbon intensity and assess climate alignment of their hull and machinery portfolio in accordance with the PPMI Technical Guidance. The Poseidon Principles use carbon intensity relative to established decarbonization trajectories to measure climate alignment. Climate alignment is defined as the degree to which a vessel, policy or portfolio's carbon intensity is in line with the International Maritime Organization's ('IMO') ambition of reducing total annual greenhouse gas emissions.
At the annual meeting in May 2024, the PPMI members unanimously agreed to adopt a new trajectory to align with the IMO's updated strategy launched in 2023. This strategy targets net-zero emissions by 2050 in a well-to-wake CO2 perceptive. It also takes into account the interim checkpoints in 2030 (20% reduction, striving for 30% compared to 2008 levels) and 2040 (70% reduction, striving for 80% compared to 2008 levels).
- Accountability: Rely only on the data types, data sources, and service providers identified in the Technical Guidance, building on the IMO Data Collection System.
- Enforcement: Require that ongoing compliance with the PPMI is made contractual through standardized covenant clauses in all of the signatory's new shipping business activities to ensure compliance with the Poseidon Principles. Signatories will work with clients and partners to obtain the necessary information to calculate carbon intensity and climate alignment.
- Transparency: Publicly acknowledge that they are a signatory to the PPMI and publish the results of the assessment on an annual basis in line with the PPMI Technical Guidance.
Who does it impact?
All signatories
The PPMI are applicable to insurance providers of hull and machinery coverage and the PPMI are supported by the signatories' insurance brokers and business partners, related to vessels under the purview of IMO (i.e. vessels of 5,000 gross tons and above engaged in international trade).
Status: Launched
Launched on 15 December 2021
Relation to other initiatives and regulations
The PPMI are based on the same methodology for the assessment and disclosure of carbon intensity and climate alignment of their hull and machinery portfolios as the Poseidon Principles for Financial Institutions, which builds on the IMO Data Collection System on fuel consumption and commit finance institutions commits to measure and disclose CO2 emissions when providing loans to shipping companies.
The signatories will take steps towards measuring portfolio alignment with the Paris Agreement to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.
Participants
A list of all signatories and affiliate members can be found here.
Affiliate membership is applicable to insurance brokers and collective groups, such as insurance associations, unions and P&I Clubs, to support the signatories and work together with their partners and clients to improve transparency across their business activities.
Thommessen's comments
The Poseidon Principles for Marine Insurance (PPMI) constitute a framework for marine insurers to assess and report on greenhouse gas emissions of their underwriting hull and machinery portfolios.
Ship-owners are not required to sign the PPMI themselves, but will be met with reporting covenants to ensure that the signatory marine insurers can comply with the PPMI.
The signatory insurers will include a standard covenant clause in their policy agreements, and will request the required emissions data from the ship-owners. As the PPMI are based on the same reporting requirements as ship-owners must comply with under MARPOL Annex VI (IMO's Data Collection System), the reporting covenants are not intended to be burdensome for the ship-owners.
The PPMI also intend to serve as a tool to support responsible decision-making by disclosing information about the vessels' greenhouse gas emissions and require assessment of climate alignment.