MSC Mediterranean Shipping Company

MSC collaborates with vehicle manufacturers on the design and maintenance of new build vessels which creates improvements in fuel efficiency and extends the lifespan of each vessel. In 2021, MSC began engaging in partnerships exploring the development of low- and zero-carbon fuels and efficiency technologies, as well as advancing work on a zero-carbon flexible-fuel concept vessel. The company is committed to launching its first net-zero capable vessel by no later than 2030. MSC is also engaged with Shell aiming to develop a range of sustainable fuel solutions.

MSC’s scope 1 emissions intensity decreased between 2016 and 2021 but not at the rate required by the company’s 1.5°C pathway. The company does not report non-shipping or subcontracted transport activity or emissions intensity. MSC should develop a detailed decarbonisation plan and include all operations. The company needs to decrease emissions intensity from all operations by over 3% annually to align with its 1.5°C pathway. The company should make financial commitments through long-term agreements with vessel and fuel manufacturers to strengthen the credibility of its plans.

MSC joined the Hydrogen Council to accelerate research and development (R&D) of clean hydrogen-derived fuels and solutions. In 2021, MSC joined the Methanol Institute to share knowledge and engage with others in exploring the use of methanol as a long-term fuel. The company is also developing digital solutions for route optimisation and intermodal service improvements. MSC 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.

MSC relies on additional capacity provided by transportation subcontractors. However, no evidence could be found that the company tracks its subcontractors’ emissions and it does not forecast future emissions linked to subcontracting. MSC could/should collect this emissions data and assess whether its subcontractors’ emissions intensity follows its decarbonisation pathway. Subcontractors should be requested to develop a decarbonisation strategy and set emissions reduction targets. Currently, MSC’s transition plan is weakened by the lack of any data related to subcontracted activities.

The company has a sustainability data management system that provides supply chain data to the company’s customers and business partners. In 2021 MSC launched a carbon insetting programme, offering its customers the opportunity to reduce their supply chain emissions through sustainable biofuel. The insetting programme seems to be an effective activity to influence customers’ behaviour, though the company can improve its reporting by setting specific KPIs and quantifying the effect of the programme.

MSC set a 40% fleet carbon intensity reduction target by 2030 and a 70% reduction by 2040 compared to 2008. It aims to achieve net decarbonisation by 2050 with the use of insets. MSC is committed to launching its first net-zero capable vessel by no later than 2030.

MSC envisions a major shift toward new fuel and technologies, including purchasing new carbon-efficient vessels and road vehicles as well as retrofitting the existing fleet with energy-saving technologies and fuels. MSC is working on intermodal solutions for its land operations.

MSC’s business model currently relies on carbon-intensive vessels and trucks. In 2021 the company added 8 newbuild and 72 second-hand vessels to meet growing demand. This resulted in a noticeable increase in emissions intensity. MSC does not disclose its inland operations emissions intensity.

MSC’s Energy Efficiency Operational Indicator (EEOI) decreased from 14.9 to 13.9 between 2016 and 2020. However, it increased up to 14.3 in 2021 due to the introduction of 72 second-hand vessels and other operational changes aimed at limiting supply chain disruptions.

MSC’s ambition to decarbonise by 2050 is undermined by the absence of financial commitment to increase the proportion of low-carbon vehicles in its fleet at the scale required. Its plan to decarbonise its land operations is impaired by limited disclosure.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. 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.

The company discloses the actions it takes to create decent jobs for the local communities it is active in, by partnering with local organizations. However, 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. 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 educational opportunities for workers and affected stakeholders. For instance, it provides training programmes to employees and organises Reefer classes. 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 has a process to identify human rights risks in its supply chain, but no other relevant evidence of the company’s policies or commitments related to the respect for human rights were found in the public domain.

The company discloses some indicators of workforce diversity, namely the gender of its workforce by employee category. However, no other evidence of the company’s policies or commitments related to key decent work issues were found in the public domain. These issues include the provision of secure, safe and healthy workplaces, where workers are fairly remunerated and have a meaningful say in decision-making.

No policies or commitments of the company related to key ethical business topics – personal data protection, tax, bribery and corruption, and lobbying and political engagement – were found in the public domain. This includes ensuring ethical business conduct throughout its operations and in its relationships with business partners.