Chinese operators warned: raise green ambitions or see investors back off

Climate change is providing yet another motivation for investment firms to diversify from China.

 

Photo: Seaspan

Last week, London’s Legal & General Investment Management (LGIM) sold its stake in China’s Cosco, claiming the shipping line had made insufficient efforts to decarbonise.

 

Senior manager Stephen Beer told The Loadstar: “We expect the shipping sector to introduce operational innovations to increase fuel efficiency in the short term, with low-carbon fuel switching and relevant investment in the long term. Firms that don’t are likely to face rising investor activism.”

 

LGIM has condemned both Air China and Cosco this year on sustainability grounds, claiming the Chinese firms are showing insufficient leadership on decarbonisation.

 

“While Cosco Shipping Holdings has an operational target on climate, the level of ambition for this target is low compared with [its] leading peers,” said Mr Beer. “There is also no commitment or investment in low-carbon fuels, which is key to sector decarbonisation.”

 

Recently The Loadstar has reported on several drives to diversify supply chains from China, with climate issues taking a back seat to concern over the Xi Jinping administration’s handling of Covid-19, as well as security concerns over components  such as semiconductors. Carmakers and even mobile phone OEMs are making plans to move their operations to India or Mexico, and meanwhile, the German government fought off an attempt by Cosco to purchase a controlling stake in a terminal at the Port of Hamburg.

 

Last year, both Cosco and Air China were similarly found to be lagging on sustainability commitments in the World Benchmarking Alliance’s Transport Benchmark report, which ranks companies not on actual emissions, but their perceived level of ambition in tackling decarbonisation. Also near the bottom of the rankings were China Post, China Southern Airlines, China Eastern Airlines and China State Railways Group.

 

Source: theloadstar by Charlie Bartlett


Related News

DEMAND, CONTAINER SHORTAGES DRIVE ZIM CONTRACT RATES UP 50%
DEMAND, CONTAINER SHORTAGES DRIVE ZIM CONTRACT RATES UP 50%

2191 Views

Zim is just the latest carrier to note shippers are seeking new, long-term commitments after a volatile year, during which having a contract was no guarantee for capacity. This resulted in companies, shippers and carriers looking into contracting tools, such as two-way commitments and index-linked rates.

SUEZ CANAL TO HIKE TRANSIT TOLLS IN 2023
SUEZ CANAL TO HIKE TRANSIT TOLLS IN 2023

1695 Views

Tolls for vessels using the Suez Canal are set to rise by 15% next year with the exception of dry cargo and cruise ships which will increase by 10%.

Recap: Ministry of Industry and Trade (MOIT) and the UK Government - first of three roadshows to introduce the Viet Nam National Trade Repository (VNTR) project
Recap: Ministry of Industry and Trade (MOIT) and the UK Government - first of three roadshows to introduce the Viet Nam National Trade Repository (VNTR) project

1968 Views

Expectedly going live later in March, VNTR will be a free-to-access online information portal, that will provide all the latest trade information in both English and Vietnamese.

 


Comment
  • Your review
main.add_cart_success