Climate action: a strategic imperative

SUSTAINABLE TRADE | As expectations from customers, investors and employees intensify, climate action has become a strategic imperative for A.P. Moller - Maersk. The industry leader is stepping up efforts to decarbonise shipping with the first carbon-neutral vessel to hit the waters in 2023.

Not unlike shipping, the fashion sector is widely regarded as one of the most environmentally damaging industries. In fact, the fashion industry accounts for 10% of humanity’s carbon emissions, which is more than all international flights and maritime shipping combined, according to the World Economic Forum.

Rising expectations

Almost three out of four key clients seriously consider sustainability in their supply chains, and 90 of Maersk’s top 200 customers have set or are in the process of setting science-based or zero-carbon targets. At the same time, ESG is moving from niche financial communities to a focus on financially material impacts that matter to mainstream investors.

These expectations, coupled with Maersk's ambition to lead the industry towards a more sustainable future, have made sustainability – and particularly decarbonisation – not only a values-based responsibility, but a commercial and strategic imperative for the company.

“Decarbonising logistics is where we can and must move the needle the most for sustainable development. I strongly believe that we, as an industry leader and with the resources available to us, have an obligation to do all we can to get to a carbon-neutral fleet as fast as possible,” says Søren Skou, CEO of A.P. Moller - Maersk.

Raising ambitions

In 2020, Maersk has fully integrated its sustainability priorities into the business strategy, adopting an integrated approach that fits the strategy and transformation towards one company and matches expectations from stakeholders.

So, what’s new? Ambitions have been reassessed and elevated, most notably with the world’s first liner vessel operating on carbon-neutral biomethanol to hit the waters in 2023, seven years ahead of the original schedule. In addition, all newly built, Maersk-owned vessels will be able to operate on green fuel.

By achieving this, Maersk will be able to pilot a scalable, carbon-neutral solution to customers and incentivise manufacturers to scale the production of new, sustainable fuels. In other words, create a market that does not exist yet.

“Pioneering this technology, it will be a significant challenge to source an adequate supply of proper carbon-neutral methanol within this timeline. Our success relies on customers to embrace this groundbreaking product as well as fuel suppliers, technology partners and developers to ramp up production fast enough,” says Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands, A.P. Moller - Maersk.

A key collaboration partner is the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, an independent, non-profit research and development center that works across sectors, organisations, research areas and regulators to accelerate the development of new energy systems and fuel technologies.

To drive efforts within Maersk, a new Decarbonisation function was launched in January 2021, tasked with ensuring collaboration across commercial, operational, technological, and corporate entities. With the new setup, decarbonisation will be an even stronger strategic priority across the business.

As part of this effort, Maersk continues to work towards net-zero emissions from its ocean activities in 2050 as well as a 60% relative reduction in emissions from shipping by 2030, compared to 2008.

Solving the challenge together

While expectations and ambitions continue to rise, the green transition of the global transport and logistics industry remains a monumental challenge. As Maersk grows its logistics presence on land, the company is investigating how to expand its net-zero ambition to cover its full operations across the supply chain.

At the same time, the wider industry is coming together to develop carbon-neutral fuels, vessels and products. This poses challenges within technology, but also in creating the right infrastructure and supply of new fuels at scale, while ensuring that framework conditions and regulations reinforce a level playing field that also awards early movers.

Through forums such as the Getting to Zero Coalition and Clean Cargo, the industry's key players are leading by example to solve the challenges together and inspire the rest of the value chain to follow suit.

To H&M Group, this level of collaboration is instrumental in tackling the climate challenge.

“It's extremely important to show that as industry leaders, we can push the boundaries together – not just for ourselves, but for the entire industry. We really see Maersk as a partner with whom we can have a great dialogue on how to improve things together, because sustainability is in our blood. We are going totally in the right direction with this partnership, which I feel very happy with,” adds Mats Samuelsson.

Sustainability priorities for Maersk

Maersk wants to enable sustainable trade through decarbonising logistics, sustainability in its end-to-end offerings, and responsible business practices.

• Maersk will take leadership on decarbonising logistics as its single most important strategic, sustainability priority.
• As Maersk 's inland logistics presence grows, so does its responsibility to help customers manage the sustainability of their transport supply chains end to end. Maersk will engage with customers and industry partners to develop standards and solutions, e.g. to ensure responsible trucking partnerships and improve monitoring of supplier compliance and contract labour.
• The company continues to ensure responsible business practices across its operations with clear governance, accountability and transparency on policies, commitments and performance.

The pandemic has only reinforced Maersk’s role in multiplying the benefits of trade and in making these accessible to all. To this end, Maersk works to reduce complexity by digitising global trade and during 2020, we saw significant growth in digital solutions, such as Maersk Spot, the Maersk app and Twill.

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