Sustainable Development and ESG Criteria in Shipping: Past, Present, and Future

Shipping is a cornerstone of the global economy, carrying approximately 90% of international trade, often with greater environmental efficiency than other modes of transport. However, the growing emphasis on sustainable development and responsible governance has made the integration of ESG (Environmental, Social, and Governance) criteria a strategic imperative. Adapting to new regulatory frameworks at both international and European levels, strengthening competitiveness, and ensuring the industry's long-term viability have cemented ESG principles as an indispensable part of modern maritime strategy.

Historically, like many sectors, shipping has encountered numerous challenges related to sustainability, ranging from protecting the marine environment to reducing greenhouse gas emissions, protecting biodiversity, and ensuring the health and safety of seafarers. In the past, however, the management of these issues was often less systematic. Today, as international requirements continue to grow and investors, charterers, and financial institutions place increasing importance on ESG performance, companies in the industry are gradually adjusting to a new reality. Greek shipping, a global leader, has made significant progress in this direction, demonstrating that sustainable development is not only a regulatory obligation but also a strategic opportunity.

While shipping has long been focused on addressing environmental and social issues within the industry, today these concerns are being integrated in a more structured and strategic manner, defining the present and shaping the future of the sector.

A key factor highlighted by international sustainability reporting standards (ESRS) is the shipping industry's integral position within the value chains of nearly all companies worldwide, underscoring its vital role in global sustainable development. Shipping facilitates the transportation of goods across virtually every sector of the economy, from energy and industry to technology and consumer goods sectors. Yet, the industry faces a range of complex challenges: managing greenhouse gas emissions, shifting to alternative fuels, handling waste, protecting biodiversity, and ensuring the health, safety, and well-being of seafarers. In today’s maritime landscape, enhancing corporate governance, promoting transparency, integrating responsible business practices, and securing fair labor conditions have become key pillars of ESG strategies for shipping companies.

The shipping industry is characterized by a high degree of self-regulation, enabling the development of sustainable practices, though these were often implemented in a fragmented way. For example, in the past, environmental responsibility primarily focused on technical improvements, such as increasing the energy efficiency of ships and using exhaust gas filters. The lack of a unified framework for assessing ESG performance made it challenging to systematically measure, compare, and assess progress in sustainability.

The regulatory landscape has shifted significantly. The adoption of international standards such as the GRI Standards, SASB Standards, and ESRS (European Sustainability Reporting Standards) has established a clear reporting structure, making the environmental and social performance of shipping companies both measurable and comparable. Notably, the new European CSRD (Corporate Sustainability Reporting Directive), which took effect in 2024 across most European countries, requires thousands of European companies, including many shipping firms, to publish structured and verified ESG reports. Additionally, the upcoming CSDDD (Corporate Sustainability Due Diligence Directive), expected to be implemented in the coming years, will introduce stricter corporate responsibility requirements, driving greater transparency and improved performance on issues related to environmental protection, climate change mitigation, and human rights.

The International Maritime Organization (IMO) has set ambitious targets for the decarbonization of the shipping industry. Under the 2023 IMO GHG Strategy, total greenhouse gas emissions from international shipping are expected to be reduced by at least 20% by 2030 (compared to 2008 levels), with the ultimate goal of fully decarbonizing the industry by 2050, in alignment with the Paris Agreement targets.

At the same time, the inclusion of shipping in the European Trading Scheme (ETS) and the implementation of the MRV (Monitoring, Reporting, Verification) system have introduced stricter CO₂ emissions controls, requiring greater transparency in reporting. These measures are driving the adoption of alternative fuels such as ammonia, hydrogen, methanol and biofuels, while carbon capture and storage (CCS) technologies are also being explored.

Additionally, the FuelEU Maritime regulation, set to take full effect on January 1, 2025, actively supports the transition to more sustainable maritime transport. By gradually increasing the use of renewable and low-carbon fuels, it aims to reduce greenhouse gas emissions and mitigate climate change. Meanwhile, initiatives such as the Poseidon Principles and the Sea Cargo Charter provide a standardized framework for incorporating ESG criteria into ship financing and chartering, reinforcing sustainability commitments across the industry.

Beyond regulatory compliance, integrating ESG criteria into the business strategy of shipping companies delivers significant benefits, strengthening competitiveness and ensuring long-term sustainability. In recent years, investors and financial institutions have increasingly favored businesses committed to sustainable practices, making ESG performance a critical factor in the decision-making of banks, rating agencies, and charterers.

At the same time, the growing link between shipping and sustainable finance is creating new opportunities through green bonds and financial instruments that reward companies for reducing their carbon footprint. Meanwhile, ESG rating agencies, which now play a pivotal role in global markets, assess the sustainability performance of shipping companies, directly influencing their reputation and financial viability.

In this context, one of the most notable recent changes is the shift from a communication-focused approach to sustainable development to a more substantial and measurable strategy. ESG/Sustainable Development Reports are no longer just tools for corporate communication; they are now grounded in international standards, concentrating on material issues and providing well-supported data on companies' performance in environmental, social, and governance aspects.

It is now clear that sustainable development is not only a regulatory obligation but also a significant opportunity for the shipping industry. The next phase of sustainable shipping involves fully integrating innovative solutions that will accelerate the energy transition and make a substantial contribution to decarbonization. An increasing number of shipping companies are investing in alternative fuels, while the development of CCS systems offers a promising avenue for reducing CO₂ emissions.

The improvement of seafarers' welfare has also become a central focus. New protocols for crew safety and health, the promotion of equal opportunities, and enhancement of psychological support for seafarers are now key priorities.

Greek shipping companies have already made significant progress in this area, clearly demonstrating their commitment to sustainable development. As a traditional global leader, Greek shipping has proven its ability to adapt and its strategic vision to lead this transition. The best practices being adopted within the maritime community today demonstrate that sustainable development is not only achievable, but also measurable and profitable.

The future belongs to those who adapt and innovate, and Greek shipping is proving that it not only follows trends but actively shapes them. The ongoing adoption of these practices shows that sustainable development can drive positive change, impacting the environment, society, and the long-term profitability of businesses. The shift to sustainable shipping is not just a challenge. It presents a unique opportunity to build a more resilient, innovative, and competitive industry - one capable of maintaining its global leadership in the years to come.