Japan's Sumitomo Mitsui Trust Bank (SMTB) has become the first Asian financial institution to sign on to the Poseidon Principles.
“SMTB is leading by example by becoming the first Asian bank to sign on to the Poseidon Principles,” said Michael Parker, veteran Citigroup banker and architect of the Poseidon Principles.
“Asia is a major center for ship finance, and the decision by SMTB will encourage other Japanese and Asian financial institutions to follow their lead in the coming months.”
To date some 18 financial institutions have joined the initiative which aims to incentivise low-carbon shipping.
They comprise ABN Amro, Amsterdam Trade Bank, BNP Paribas, Bpifrance, Citi, Credit Agricole CIB, Credit Industriel et Commercial, Credit Suisse, Danish Ship Finance, Danske Bank, DNB, DVB, Export Credit Norway, ING, Nordea, Societe Generale, Sparebanken Vest and SMTB.
Banks signed up to the Poseidon Principles are said to cover over $150bn in loans to international shipping and represents more than one-third of the global shipping finance portfolio.
“Through becoming a signatory of the Poseidon Principles and as a member of the maritime cluster, SuMi TRUST Bank will continue to support its clients’ business activities and to contribute to shape a better future for the shipping industry and our society,” SMTB said in a statement.
The Poseidon Principles have been described as the world’s first “sector-specific, self-governing climate alignment agreement” amongst financial institutions.
However, until today it was exclusively backed by western-based financial institutions with substantial involvement from Scandinavian and other European lenders.
Critics of the initiative had questioned its credibility if it fails to secure backing from Chinese lenders, which account for a significant and rising share of the global ship finance market.
In January this year Parker told TradeWinds that a “number of Asian and Chinese lenders” were close to agreeing to sign.
“They will all be there by the end, we are convinced of it,” he said on the fringes of the Marine Money London Ship Finance Forum 2020.
