Drawing on our Natural Capital
The primary environmental impacts of shipping are emissions and discharges. At sea and in port, these outputs are substantially all regulated and compliance is enforced across international, regional and local jurisdictions.
We recognise our responsibility to reduce the impact of our operations on air, sea and land, and our Pacific Basin Management System is designed to measure and continually improve every aspect of fleet operations, including our environmental outputs.
Our environmental philosophy is centred on our commitment to being a responsible company at the forefront of environmental efforts within the dry bulk shipping industry.
We have embedded across our global footprint at sea and ashore environmental programmes and initiatives that embrace environmental stewardship and, specifically, serve to reduce our atmospheric emissions, marine discharges and resource consumption. Broadly speaking, we achieve this by:
Adopting environmentally-friendly technologies and practices across our business
Pursuing environmental initiatives at sea and on land that meet or go beyond what is required of us by law and regulations
Promoting more modest practices even if they only bring relatively small benefits to the environment, as we believe group-wide and individual contributions make a difference
- One of the ways we reduce the environmental impact of our operations is by our efficient operation of modern ships designed and equipped for efficiency.
- Through our largely counter-cyclical acquisition of newbuilding vessels and modern second-hand ships, we renew our fleet with new or modern ships of the best, efficient designs and equipped with technical enhancements that reduce atmospheric emissions and marine discharges.
- Similarly, we retrofit our existing ships in operation with technical enhancements that reduce atmospheric emissions and marine discharges, and we adopt operational measures to minimise our ships’ fuel consumption and emissions.
- Environmental measures embraced by our employees at sea and ashore include training and defined policies and practices such as reducing our consumption of electricity, water and other materials, and recycling.
- Our policies and guidelines are designed to promote environmental awareness, mandate environmentallyfriendly activities and promote similar behaviour at work and in the communities where our ships trade and our employees live and work.
- The first step to improving the environmental performance of our fleet is to monitor, measure and analyse the outputs of our vessels. From there, we can assess and adopt measures to reduce our environmental impacts, with performance improvements achieved through both technical and operational enhancements.
Tackling our Environmental Responsibilities
Propelling a vessel across oceans requires many resources, the outputs of which impact the environment, as summarised on Our Key Impacts. We take a holistic approach to reducing our operations’ impact on the atmosphere, sea and land. Our Pacific Basin Management System ashore and at sea conforms to the mandatory International Safety Management (ISM) Code and is also certified by DNV GL Business Assurance to voluntary standards, including ISO 14001:2015 for our environmental management system. We track the effectiveness of our Environmental Management Systems using KPIs.
We seek to minimise our impact on the environment from atmospheric emissions, resource consumption and marine discharges
through the adoption of energy-efficient and environmentally-friendly ship designs, technologies and practices at sea and ashore. The information below is a summary of significant initiatives we pursue to reduce our environmental impact.
Atmospheric Emissions & Fuel Efficiency
The main measures and technologies we use to minimise our emissions include:
Fuel-efficient Operational Measures
- Upgraded adaptive autopilot systems reduce rudder movements and improve course-keeping by automatically adapting to load characteristics and weather conditions.
- Our proprietary Right Speed Programme determines optimal operating speeds based on prevailing freight rates and fuel prices.
- Optimal scheduling of our fleet coupled with fuel-efficient voyage planning minimises ballast passages (achieving a >90% laden ratio) resulting in fuel savings.
Improving Hull and Propulsion Hydrodynamics
- Fitting propeller boss cap fins improves propulsion hydrodynamics, which improves fuel efficiency and reduces emissions.
- Application of anti-fouling paints over a larger hull area reduces drag and improves fuel efficiency even when fully laden.
- Computer-aided calculation and monitoring of hull performance over time allows us to optimise hull condition management.
- By continually renewing our fleet, we introduce ships with fuel-efficient hull designs and machinery which reduces fuel consumption.
Improving Engine Performance
- Fuel combustion catalysts facilitate more complete and cleaner combustion. This leads to fuel savings and reduces the frequency of engine overhaul maintenance.
- Computer-aided optimisation of cylinder lubrication and machinery overhaul intervals leads to reduced fuel and lubricating oil consumption.
CO2 Emissions Performance in 2018
Our carbon intensity remains among the lowest in our segment due to our technological and operational measures and the overall efficiency of our large, modern fleet.
Our aim is to maximise cargo carried per tonne of energy consumed.
Our fleet’s carbon emissions intensity in 2018 reduced 2% to 10.90 grams of CO2 per tonne-mile, as calculated using the industry-standard ship Energy Efficiency Operational Indicator (EEOI) method. This was primarily due to our ships operating at slightly slower average operating speeds in 2018 as optimised by our proprietary Right Speed Programme based on prevailing market freight rates and fuel prices.
Our carbon intensity also benefited marginally from the slight increase in our average ship size with the delivery of five modern ship acquisitions into our fleet.
We continued to apply technologies and practices that we implemented in earlier years to minimise our fuel consumption and emissions, and benefitted from the delivery into our fleet of new and modern ships of efficient design.
In 2018, we added five modern ships to our fleet on the water, and the average age of our owned ships was 9.3 years as at 31 December 2018. All these acquisitions are efficient ships of excellent design for our trades.
Marine Discharges & Waste Management
The main measures and technologies we use to minimise our marine discharge and waste include:
Reducing Marine Discharges
- Our ISM and ISO-compliant safety management system prescribes system controls, procedural safeguards and training to prevent and respond to oil spillage.
- Oily water separators minimise the risk of inadvertently pumping out contaminated bilge water.
- IMO-compliant ballast water management plans set out strict practices to minimise the spread of aquatic species.
- We use biocide-based paints and monitor advances in more eco-friendly paints.
Garbage compactors on our ships facilitate easy storage of operational garbage (excluding food waste and cargo residues) until it can be disposed of responsibly on shore.
Marine Discharge, Pollution and Waste Performance in 2018
We aim to not have any pollution incidents.
In over 38,300 ship days in 2018, our owned fleet committed no marine pollution violations (2017: no pollution violations). This MARPOL performance is indicative of the effectiveness of our Pacific Basin Management System and the high standard of professionalism of our seafarers.
Green Efforts Ashore
Across our offices ashore, we do what we reasonably can to minimise our footprint by addressing environmental elements that are within our control.
Guidelines and communications are regularly posted and policies and practices are in place across our network of offices to:
- Reduce consumption of electricity, water and materials
- Recycle office waste
Having successfully discontinued the use in our Hong Kong office of plastic rubbish bin liners at our desks in 2017, we have rolled out a similar practice across our regional offices and, in 2018, we commenced the reduction of rubbish bins to encourage further minimisation of office waste.
Pacific Basin was awarded a Silver Label in the WWF’s Low-carbon Office Operation Programme that measures and tracks outputs and Energy Consumption from our headquarters in Hong Kong.
An independent audit of our environmental performance determined that our headquarters office in Hong Kong (where 60% of our shore-based staff work) produced carbon emissions of 1,186 metric tonnes for the 2017/2018 audit year (2016/17: 1,135). This represents an increase in emissions of 4.4% which was attributable to increased business travel and staff commuting (scope 3 emissions) largely offset by a significant 55% reduction in our electricity consumption (scope 2 emissions).
Our increased business travel was mainly attributable to a continued return to normal levels of air travel, mainly because of our ship managers’ increased ship visits to our larger fleet of owned ships and to attend to more routine dry-dockings and ballast water treatment system installations.
Reduction in electricity
Hong Kong headquarters
Our Pacific Basin Management System ashore and at sea conforms to the mandatory International Safety Management (ISM) Code. It is also certified by DNV GL Business Assurance to voluntary ISO 14001:2015 standards for our environmental management system.
We disclose our carbon footprint data through:
- the Carbon Footprint Repository (CFR) developed by Hong Kong’s Environment Bureau for listed companies in Hong Kong;
- the HKQAA Sustainability Rating and Research for the Hang Seng Corporate Sustainability Index Series; and
- the World Wildlife Fund’s (WWF) Low-carbon Office Operation Programme (Loop).