A.P. Moller – Maersk

Maersk has set a target to reduce shipping scope 1 emissions intensity by 50% by 2030 compared to 2020. In addition, it has a commitment to achieve net-zero emissions across its entire business and supply chain by 2040, in line with the Science Based Targets initiative’s (SBTi) net-zero criteria. Both targets are highly ambitious and are aligned with the company’s 1.5°C pathway. In May 2021, the company joined the SBTi’s Business Ambition for 1.5°C initiative and committed to setting SBTi validated targets. Maersk can incentivise continuous action to decarbonise by setting intermediate targets for 2025 and 2035.

Maersk is one of the few benchmarked companies with a policy to engage trade associations on climate issues. It reviews its membership status annually to ensure its trade associations are in alignment with the goals of the Paris Agreement and will take action if misaligned. The company demonstrates strong support for key climate policies, such as the European Commission’s Fit-for-55 package, which includes the FuelEU Maritime Regulation and the extension of the EU Emissions Trading Scheme. Maersk has urged the International Maritime Organization to act quickly and make significant progress to decarbonise shipping at upcoming meetings in 2022.

Between 2016 and 2021, Maersk’s scope 1 emissions intensity decreased by 2% per year on average, which was less than the 5% rate required by the company’s 1.5°C pathway. At present, the projected emissions from the company’s fleet are expected to greatly exceed its carbon budget between 2022 and 2036. Maersk’s planned deployment of 13 methanol-enabled ships by 2025 represents less than 2% of the company’s fleet. This is not aligned with the share of low-carbon vessels required under a 1.5°C scenario. Maersk should develop detailed plans to replace its current fleet with low-carbon alternatives.

In June 2020, Maersk launched the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping, an independent research and development (R&D) centre. The company undertakes R&D related to alternative shipping fuels such as biodiesel, green methanol and green ammonia. Moreover, the company’s venture capital arm, Maersk Growth, has made minority investments in three start-up companies focused on developing sustainable fuels. Maersk can go further and disclose its total R&D and low-carbon R&D investments. The company should ensure that a significant proportion of its R&D investment is in low-carbon vehicles and fuel development.

At present, Maersk does not incentivise low-carbon performance through executive compensation. The company plans to incorporate certain environmental, social and governance (ESG) criteria into its incentives from 2023, but it has not disclosed what performance indicators will be included. The company has an opportunity to implement a successful low-carbon transition by aligning its incentives, especially at the executive level, with its decarbonisation commitments. Maersk needs to provide incentives to reduce emissions and increase its low-carbon vehicle share in line with its low-carbon ambitions.

Maersk has set a near-term target to reduce the emissions intensity of its shipping operations by 50% by 2030 compared to 2020. By 2040, the company aims to achieve net-zero emissions across all business activities and its supply chain in line with the net-zero criteria of the SBTi.

By 2030, Maersk intends to transport a minimum of 25% of ocean cargo using alternative fuels such as green methanol and 30% of air cargo using sustainable aviation fuels. It is researching green ammonia fuel as part of its long-term strategy to reach net zero.

Maersk’s current shipping business model relies on carbon-intensive fuels. It has purchased 13 methanol-enabled vessels that will begin operating between 2023 and 2025. However, these will represent a small proportion of the company’s total shipping fleet of more than 700 vessels.

Maersk’s scope 1 emissions intensity decreased by 2% per year on average between 2016 and 2021. Between 2020 and 2021, the company’s emissions intensity increased from 12.2 grams of carbon dioxide per tonne nautical mile (gCO2/tnm) to 13 gCO2/tnm, driven by sailing at maximum speeds to limit supply chain disruptions.

Maersk’s ambition to rapidly decarbonise by 2040 is undermined by its decarbonisation strategy, which lacks a detailed transition plan and financial commitment to increase the proportion of low-carbon vehicles in the company’s fleet at the scale required.

No evidence was found of Maersk’s commitment to social dialogue. The company does disclose the categories of stakeholders it engages with on a just transition, including workers, unions, local communities and civil societies. However, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue or engagement with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.

The company discloses the actions it takes to provide reskilling and training opportunities for workers and affected stakeholders. For instance, it plans to reskill its workers as it modernises its ways of working. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.

No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. While the company has identified and addressed some salient human rights risks in its own operations and supply chain, it does not disclose the process and systems in place to identify and assess human rights risks. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of a time-bound target for paying all workers a living wage. Nor does the company disclose the proportion of its direct workforce covered by collective bargaining agreements, and no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. Nevertheless, the company commits to gender equality and women’s empowerment.

No commitment or policies were found regarding the protection or use of personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, no public policy governing lobbying and political engagement was found, nor any relevant disclosure of the company’s expenditure on lobbying activities.