Shipmanagement Sustainability Standards (2012)

By Yanna Pavlopoulou, Article at SHIPPING International Monthly Review, February 2012 Issue.

The ISM regulation over the shipping activity has evolved as a new approach to safety, in response to marine disasters. Similarly, Corporate Social Responsibility (CSR) evolved as guidelines for a new, holistic, although voluntary approach of the business mission, due to new social and environmental parameters, e.g. need for corporate governance, transparency, social cohesion, labor advancement and climate change.

        Corporate citizens of today are expected to do well, by targeting in doing good. A corporate strategy that considers citizenship parameters, e.g. social inclusion and Global Warming, is gradually becoming an important factor of sustainable business growth. A company leader in times of economic crisis could, therefore try to invest in a new business approach of doing business in a socially responsible way.

However, is this pattern acceptable by the shipping industry? Are shipping executives individually sensitized towards all their stakeholders, proactively and responsibly changing their business strategy over those issues?

A pioneer shipping company could implement Business Management Systems and Models of uniform standards, that guarantee transparency, sustainability and corporate governance, same as those that all the other sectors & industries successfully apply. Standards aim to enhance their members’ leadership and professional skills on how to apply standard sustainability principles ( e.g.  ISO 14001, ISO 50001, ISO 26000, SA 8000, SEEMP, EEOI, ISM, TMSA, EFQM, Investors in People, GRI, AA1000).  Those Models are mutually supportive, providing methodology and assessment over Excellence, Sustainability and Total Quality through multiple criteria & standards. There are (300) Excellence or Energy management models & standards related to CSR (most widely used are the ΑΑ1000 & UN GRI). In 2010 the International Integrated Reporting Committee – IIRC started to develop common standards on the Sustainability Reporting  regarding Economic, ESG, Environmental, Energy, and Social Indices. In shipping, Classification societies are very well aware on how to assess and verify CSR  and Climate Change (CC) reported practices and may offer an  initial guidance for Excellence performance.

Therefore, upgraded and standardized Business culture of Ethical and socially responsible patterns, have become more familiar and comprehensible to the internal & external stakeholders, giving to each organization a unique, sophisticated and distinguished identity and recognition by customers and third parties.

 Corporate Social Responsibility (CSR), as a way of performance management in shipping is still at a primary stage compared to other industries, since this industry does not care to follow generally spread management and marketing practices of social profile. Shipping is a volatile and highly competitive business sector with unique Management practices, afloat by nature with activities of transnational reach. By implementing standard CSR best practices, shipping companies  persuasively prove, e.g. to their customers (charterers) that they are assessed according to the same Quality and Excellence Management standards as the industries ashore.

Businesses that, via models, achieve positive results enjoy extended positive publicity & media coverage as role models at awareness campaigns in International or national fora. Corporate Governance & CSR frameworks are guidelines to internally check if the company is on the right track to excellence, led by ethics.

Excellent companies have leaders who are role models of a culture of Excellence. They implement their mission, vision, policy and strategy, based on the present and future needs of their stakeholders, because their people are involved, empowered and cared for.

Excellent organizations measure regularly their impact to society, exchanging information over social responsibility best practices, and by reporting their sustainability progress they accept social auditing that gives them an important competitive advantage. An Excellence culture, however, is better enabled, once an Excellence model, policy and strategy are fully deployed and implemented in the company.

shipping company’s performance, although it consists of a SME (Small Medium Enterprise) of 10-50 employees ashore despite its complicated economic presence, may systemically benefit from the interaction with  Sustainability networks  and Sustainability standards.

Therefore as long as the drive to Excellence is voluntary, there are promotional incentives, such as Awards and Distinctions at relative Conferences, in order that ship managers decide to implement a CSR performance. But shipping should be cautious during those difficult times and aware of the essence and real meaning of CSR. Greece is going through one of the most difficult economic crisis of her history; severe unpopular tax measures are taken that will threaten social cohesion, political order and peace throughout its national territory.

Moreover, shipping is facing today a midst of general worldwide fear of recession. This is a new economic order and time where corporations seek to transform themselves in order to become high-impact, with a sustainable regenerative business model, sound ethical business principles and a positive willingness to engage in social partnerships. Thus, materialization of a corporate metamorphosis, in a crisis era, requires corporations to engage in some type of partnership with other major players in the social and economic international scene by joining forces with individuals, NGOs, labor and environmental protection organizations, transnational social movements, or multilateral development agencies.

Furthermore, synergies and interdependence of motivated corporate staff with local community are required as a powerful tool for a holistic approach to a CSR development. “There are a lot of disjointed views from a plethora of maritime lobby groups. However, there is no consolidated industry position that regulators could take under  account” said Fotis Karamitsos, EC’s Maritime Director (Fairplay, 2.12.2010).

 Self-regulation (through Shipping NGOs, P&I Clubs and Classification Societies) has proven over the years to be the only way forward in the shipping industry, given its international character and ability to self enforce, as well as due to its long history of not succumbing to political interests and not trying to satisfy public opinion at its own expense. In this respect the IMO has played an excellent host/venue for the shipping industry to bring forward and debate self regulation usually much earlier than other industries, that look towards national governments and/or supranational and regional associations for regulation and enforcement.

A  practical and “fast track” action of social responsibility towards Greece, from the wide maritime community , would be to support multiple well structured joint CSR projects. Many Maritime Associations together could elaborate collectively projects of their own interest, set a Social Cohesion Fund, under their auspices and convince that shipowners truly care and contribute to the Greek society with sustainability focused targets, under a concrete Sustainability Action Plan. This plan could aim to be used as an Carbon Emissions Offset proposal, against  the Climate Change tax, imminent to be imposed to the Greek shipping. According to the (Common but Differentiated) UN rules, any Carbon tax collected by Greeks will ultimately benefit the developing countries’ green economy. Moreover, Emissions Trading Schemes and agents that promote voluntary Carbon Offsetting practices drain funds from Greece to be used in green projects to unknown offshore Climate Funds.

A uniform CSR strategy from a CSR Committee of all the maritime Greek lobbies, could be the vehicle so that the European Commission is persuaded that something is starting to change in the shipping community’s mentality. Common interests would join in a JOINT CSR Action Plan for specific social, HR and environmental goals, such as Maritime and Sailing Academies, sponsorships to R&D University Plans, Marine Reserves etc.

 To conclude, although relative corporate budgets are currently on hold, the general financial crisis can become a catalyst for action. In that climate, “Collective” Social Responsibility initiatives appear practically as a possible vehicle to “Create Shared Value” (CSV) and materialize certain actions of Excellence in business management, as a strategy that will benefit the social image of Greek-owned Shipping.

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