Businesses around the world are feeling the burden of having to take on new sustainable practices in their operations – and that includes the maritime industry. But what if we reframe that thinking and look at sustainability as a business opportunity instead?
Most businesses depend on natural resources to deliver their products and services. Plus, access to these resources is key if these businesses want to see continued financial returns and value creation.
To succeed – while also protecting the environment and the communities that depend on it – maritime businesses use sustainability as a platform, leveraging data, AI, and machine learning to translate and transform operational challenges. This enables them to make more informed decisions, identify more value in the ocean value chain, and improve overall corporate performance.
In this article, we’re exploring some of the sustainable practices that help all kinds of businesses – manufacturing, financial services, consumer goods, as well as maritime – unlock opportunity, avoid risks, and the best practices to adopt in a systems-based approach to sustainability.
Leading examples of how maritime business are unlocking sustainable opportunities
Sustainability is a practice that can apply across different facets of the business, especially if it’s supported by data-rich and transparent practices.
Better visibility. Within the shipping industry, transparency can improve visibility on rates, location of cargo and compliance with sanctions – all of which can lead to large cost savings.
Time and money savings. Supply chain transparency can also be particularly effective in driving efficiency through improved visibility and collaboration. With more visibility into the bigger picture, maritime companies can better identify bottlenecks and inefficiencies – and work collaboratively with suppliers to optimize processes.
Increased customer trust. Today’s customers often want to know about where a product comes from, its environmental impact, and the condition of the workers that helped make it – and they expect companies to be transparent about this information. Researchers at the MIT Sloan School of Management found that consumers are willing to pay 2% to 10% more for products from companies that provide greater supply chain transparency. Brands that take sustainability seriously are able to quickly encourage positive sentiment in the marketplace.
The added value of a circular model
In a circular model, materials are kept in the system at their highest value for as long as possible. This often means that they are recycled and reused across the economic system in order to extend their value for as long as possible.
To this point, leading best practice industry, ports and maritime shipping have very unique and inspiring forms of circularity. For both shipping lines and terminal operators there are four main areas where circularity are introduced and leveraged:
- Maintenance: Taking a proactive approach to substantial repairs not only improving commercial viability, but also reducing the risk of having parts decommissioned.
- Reuse / ship leases: There is an extensive market for ship sales or leases, allowing shipping assets to remain optimally used. Another circular effort includes the cascading of ships from deep-sea to regional feeder services.
- Recycling: There are instances where the land footprint of a terminal can be converted for other uses, such as residential buildings. For instance, a port that’s no longer in use can be “recycled” into urban redevelopments.
- Containers: Containers represent a specialized form of circularity as container shipping is designed as a recycling system. A container is a reusable unit constantly being repositioned by carriers who own or lease container fleets.
One example of this circular model in action is the Copenhagen Malmö Port (CMP), which has put ship waste, port waste management, biogas plant, and the Shore-to-Ship power supply in a closed loop. In the model, the port authority takes care of waste management from cruise ships to use the waste in a port-owned biogas plant. The port-owned biogas plant produces clean electricity from ship waste while to some extent contributes to port energy security.
Staying ahead of the risks
As with many industries, the shipping industry in particular faces a number of physical asset risks as a result of environmental shifts and changing customer sentiments. These include:
- Increased asset sensitivity and vulnerability due to temperature and sea level rise.
- Performance risks related to frequent extreme weather events.
- There’s a need to combine real-time Geographic Information System (GIS) and weather data to predict asset sensitivity.
- Gradual but decisive rise in carbon prices for companies relying on carbon offsets.
- Policy and legal changes by geography.
To stay ahead of these risks and take a sustainable approach to their business operations, shipping companies and ports leverage real-time data from various sources across the ocean value chain.
A systems-based approach to sustainability
Incorporating sustainability into your business’s operating model can feel like an overwhelming project. These five steps are a good place to begin:
- Start with materiality: Understand the main impacts related to your business: where is your company creating or reducing value for the environment? How can you prepare for evolving governmental compliance requirements?
- Align your stakeholders: Shareholders, board directors, legal counsel, audit and risk management, compliance, business unit managers, technology, and other critical employees should be aligned in your sustainability strategy.
- Set a baseline: Establish targets based on your materiality assessment – which areas are most likely to create positive change? Setting baselines based on low hanging fruits is another good way to get the ball rolling.
- Employ sustainability in decision making: Adding a sustainability criterion to decision-making processes is a simple but effective way of influencing everyday operations and broader strategic decisions.
- Measure and track everything: Tracking impact on a higher frequency allows companies to act quickly based on insights gleaned from recent data. In addition, it also allows them to quantify the positive effects of sustainability efforts in a way that is comparable to other business investments.
These efforts should all be supported by a comprehensive data infrastructure that effectively analyzes, leverages, and employs available data to make strategic decisions. Taken further, this data should also be used by generative AI and machine learning solutions. These technologies can empower sustainable initiatives by streamlining operations, introducing efficiency, and improving customer relationships. Plus, generative AI can be crucial for managing knowledge, facilitating rapid information discovery and unlocking valuable insights.
As the business ecosystem takes more steps to be sustainable, companies have a responsibility to better understand gaps and opportunities around leveraging sustainability to enhance their business opportunities. Pairing a systems-based approach that’s supported by rich data and AI-driven solutions will be key to success.