Marine Transportation
Relevant Issues (6 of 26)
Why are some issues greyed out?
The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.-
Environment
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GHG Emissions
The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3). -
Air Quality
The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category. - Energy Management
- Water & Wastewater Management
- Waste & Hazardous Materials Management
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Ecological Impacts
The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
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Social Capital
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
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Human Capital
- Labor Practices
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Employee Health & Safety
The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment. - Employee Engagement, Diversity & Inclusion
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Business Model and Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
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Leadership and Governance
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Business Ethics
The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behavior that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error. - Competitive Behavior
- Management of the Legal & Regulatory Environment
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Critical Incident Risk Management
The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur. - Systemic Risk Management
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Disclosure Topics
What is the relationship between General Issue Category and Disclosure Topics?
The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)
(Industry agnostic)
Disclosure Topics (Industry specific) for: Marine Transportation
GHG Emissions
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Greenhouse Gas Emissions
Marine transportation entities generate emissions mainly from the combustion of diesel in ship engines. The industry’s reliance on heavy fuel oil (‘bunker fuel’) is of material concern because of rising fuel costs and intensifying greenhouse gas (GHG) regulations. The industry is among the most fuel efficient of the major transportation modes in terms of fuel use per ton shipped. However, because of the industry’s size, its contribution to the global GHG emissions is still significant. Recent environmental regulations are encouraging the adoption of more fuel-efficient engines and the use of cleaner-burning fuels. Fuel constitutes a major expense for industry players, providing a further incentive for investing in upgrades or retrofits to boost fuel efficiency.
Air Quality
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Air Quality
Air pollutants such as sulphur oxides (SO?), nitrogen oxides (NO?), and particulate matter (PM10) are significant environmental externalities from the use of fuel by marine shipping entities. These pollutants tend to have localised environmental and health impacts and are especially a concern at port cities. Air pollution regulations are driving the adoption of more fuel-efficient engines and the use of cleaner-burning fuels as entities seek to reduce exposure to fines and environmental remediation costs. A further incentive for fuel efficiency is that fuel constitutes a major expense for industry players, so capital expenditures to upgrade vessels may be offset over the long term from fuel costs savings.
Ecological Impacts
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Ecological Impacts
The operations and waste disposal practices of marine transportation entities can create substantial environmental externalities, such as water pollution and damage to marine life. Seagoing vessels routinely discharge ballast water, bilge water, and untreated sewage. Compliance with international regulations intended to manage the ecological impacts of operation can require significant capital expenditures to upgrade or instal waste management systems. Illegal dumping of bilge water and other unregulated discharges can lead to hefty fines, negatively affecting an entity’s risk profile. Operating in areas of protected conservation status, such as Emission Control Areas (ECAs) and Particularly Sensitive Sea Areas (PSSAs), can increase the risk of ecological impact as well as the risk of violating environmental regulations.
Employee Health & Safety
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Employee Health & Safety
Marine transportation workers face dangers such as hazardous weather and exposure to large machinery and heavy cargo. The greatest health and safety risks stem from loading and unloading cargo at ports. Ships must be loaded and unloaded quickly and on schedule, increasing injury risk, fatigue, and stress. The health and well-being of workers in the industry is also inextricably linked to the safety performance of the entity, as a healthy crew is necessary for safe voyages. Entities with inadequate safety management systems that fail to ensure the health and safety of workers may face higher turnover and higher worker-related expenses, including medical expenses such as insurance premiums and worker payouts.
Business Ethics
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Business Ethics
Facilitation payments at ports are considered standard business practice in some countries to obtain permits, cargo clearance, and port berths. However, anti-bribery laws place pressure on marine transportation entities to alter this practice. Enforcement of these laws could lead to significant one-time costs, higher ongoing compliance costs, or affect an entity’s social license to operate, affecting its cost of capital. Entities are under increasing pressure to ensure that their governance structures and practices can address corruption and participation—whether willful or unintentional—in illegal or unethical payments or exertion of unfair influence. Operating in corruption-prone countries can exacerbate these risks.
Critical Incident Risk Management
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Accident & Safety Management
Accidents or leaks involving large vessels can have significant costs to life, property, and the environment. Negative media attention and massive cleanup costs can severely damage an entity’s finances. In order to reduce the risk of accidents, entities put extensive safety measures into place, such as employee training programs, periodic dry-docking maintenance periods, and annual class-renewal surveys conducted by classification societies. The reliance of the global marketplace on the shipping industry means that voyages need to be made within precise timeframes, providing further incentive for preventing accidents.