ESG Policy

Policy as at:
31/03/2022

1. Overview

Sustainability is embedded into our everyday decision making and investment process. 

TMI aspires to be a responsible corporate citizen. We are committed to integrating environmental, social and governance factors into our investment process and to the responsible stewardship of our assets and the environment. While shipping remains by far the most efficient method of transporting bulk commodities based on CO₂ emissions per unit of transport work, it is nevertheless responsible for around 2.9% of global greenhouse gas emissions. We are heavily engaged in industry initiatives to promote cleaner shipping and reduce greenhouse gas emissions by at least 50% by 2050, in line with the goals of the Paris Agreement, including through cooperation with the Getting to Zero Coalitions.

Our ESG policy and objectives are set and monitored by our ESG & Engagement Committee which reports to the Board. Our Executive Team works with our external service providers and other key stakeholders to progress our decarbonisation priorities and other critical environmental, social and governance objectives.

2. Aligning our ESG priorities to the UN Sustainable Development Goals

Our approach is underpinned by six key ESG priorities, in the context of which KPIs are measured and progress is tracked against. The shipping industry, irreplaceably serving the basic needs of global society, is in a position to contribute positively to the SDGs.  The SDGs are a fundamental component to our ESG framework and are used to assess, measure and monitor the environmental, social and sustainable attributes of investments.  We have elected to focus on the six key SDGs that most closely align with our purpose and ambitions as an investment company.

SDGs

ESG priorities

SDG 9: Industry, Innovation and Infrastructure

SDG 13: Climate action

Responsible Investment

SDG 13: Climate action

SDG 14: Life below water

Climate change and environmental management

SDG 8: Decent work and economic growth

Onshore and at sea safety

SDG 13: Climate action

SDG 16: Peace, justice and strong institutions

Compliance and conduct

SDG 8: Decent work and economic growth

Community and employee engagement

SDG 16: Peace, justice and strong institutions

SDG 17: Partnerships for the goals

Strong Corporate Governance

3. ESG Reporting approach

We report our ESG metrics annually using recognised reporting standards:

  1. SASB (“Sustainability Accounting Standards Board”) for Marine Transportation
  2. GRI (“Global Reporting Initiative”)
  3. TCFD (“Task Force on Climate Related Disclosures”)

4. Stakeholder engagement

We engage actively with our stakeholders to achieve collective ESG responsibilities and ambitions; including our investors, our staff, our supply chain partners and our public sector clients. Collective action is required to solve complex challenges affecting the shipping industry. Together with our Service Providers, we are in regular open dialogue with key stakeholders on issues relating to decarbonisation, welfare and legislation. We have identified our principal stakeholder groups, our approach to engagement with these stakeholders, outcomes of these engagements and how this directly impacts our ESG strategy.

5. Environmental factors

We are constantly searching for new ways to minimise our environmental impact by enhancing our fleet operations and reducing GHG emissions. We are committed to helping decarbonise the industry through innovation and collaboration – with our customers, financiers, other shipowners, and industry associations and decarbonisation forums.

We believe more urgent pace of change is required to respond to the climate crisis, which is why we have joined 150 others Getting to Zero Coalition members in signing the ‘Call to Action for Shipping Decarbonisation’, calling for a more ambitious long-term target of zero carbon emissions by 2050. The Group has clearly defined a set of near-term initiatives to achieve our decarbonisation goals.

Decarbonisation roadmap

1. Short-term (present – 2030)

  • Fleet energy efficiency gains;
  • Full compliance with environmental regulations;
  • Interim lower emissions fuels e.g. biofuels.

2. Mid-term (2030+)

  • Reduce our fleet GHG emissions in line with or exceeding the current IMO targets of 40% carbon intensity reduction by 2030;
  • Commence adoption of zero carbon or alternate fuels (once technically viable and safe).

3. Long-term (2050)

  • Operate a net-zero carbon fleet.

Working with our customers

We cannot achieve net zero carbon goals without the shared vision, cooperation, and co-investment of our customers towards decarbonising the supply chain.

Working with bodies across and outside our industry

We recognise the need to be engaged with shipping industry associations and decarbonization forums to create momentum to decarbonise shipping. We are a member of the Getting to Zero Coalition and a signatory to its Call to Action for full decarbonisation of the shipping sector.

Initiatives to directly meet our decarbonisation targets

1 Operational and technical efficiencies on our existing fleet

In collaboration with our ship managers’ dedicated emissions team, we continually monitor our fleet’s energy efficiency and GHG emissions resulting in adjustments and improvements to vessel operations to increase fuel efficiency and reduce emissions.

Operational measures to reduce emissions include use of advanced weather routing systems, increased frequency of hull cleaning and propeller polishing to remove marine bio build up and reduce drag.

2 Adopting energy-efficiency technologies

We are investing in retrofitting a range of energy efficiency devices to our fleet (including newly acquired vessels), including:

  • energy efficiency monitoring systems – real time monitoring of fuel consumption and torque, allowing real time diagnostics and adjustments to vessel operation
  • propeller boss cap fins (“PBCF”) – create more efficient propeller vortex, reducing drag
  • advanced hull coatings – allow smoother surface for longer and reducing friction
  • LED lighting – replacing conventional lighting across the vessel
  • engine power limiters – capping fuel consumption and therefore top speed
  • air lubrication system - reduces drag through creating a continuous layer of air bubbles under the hull, reducing resistance between the ship and seawater
  • wake-equalising ducts – optimise the flow of water to the propeller, enabling vessels to sail at the same speed with less power.

A combination of these technical measures will result in a lower fuel consumption of the fleet.

3 Piloting new technologies and alternate fuels

We will contribute our know-how, our vessel assets, and financial resources to real world trials with customers and developers of promising low/zero carbon technologies and fuels.

4 Environmentally aligned vessel Investment/Divestment Strategy

Any vessel we acquire is subject to extensive checks to assess its current condition and the steps needed to bring it up to our targeted technical and energy efficiency standards, including the retrofit options. Our starting point is to prioritise acquisition of vessels of well known, high quality and efficient designs, built in Japan.

Air Quality

In 2020, the IMO introduced a new sulphur cap legislation reducing the maximum sulphur content of marine fuel from 3.5% to 0.5%. Our entire fleet is within compliance of the 2020 rules, having achieved 100% adoption of Very Low Sulphur Fuel Oil (“VLSFO”).

End of vessel life recycling policy

Based on the average age of the existing portfolio, we do not expect to own vessels due for recycling in the near future. We do not intend to own vessels at the point of recycling but nonetheless we are committed to follow the practices of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009, the EU Ship Recycling Regulations and the Basel Convention, as set out in the Group’s Recycling Policy.

6. Social

Health & Safety

Alongside our technical managers, we have created a strong safety culture both onshore and offshore, exceeding regulatory standards.

We have three key objectives:

  • Zero fatalities
  • Zero injuries
  • Create a culture of sharing lessons from incidents/near misses

Our technical managers have implemented a collection of comprehensive safety procedures, policies, and protocols on-board vessels, helping the crew mitigate the daily risks faced during vessel operations. Vessel safety performance is monitored by collecting and tracking performance against a comprehensive list of industry KPIs and ensuring that any significant incidents are reported upon with follow up actions taken.

Safety Onshore

Safety onshore is also of paramount importance and we endorse safety procedures at our offices and when travelling on behalf of the business. This includes work-station safety procedures, first-aid trained employees at all offices and medical insurance covering employees when travelling abroad.

Seafarer welfare and mental health

At the same time, in line with the Group’s policy, measures have been taken to improve quality of life and protect the health of crews aboard the Group’s vessels. We adhere to the Maritime Labour Convention (2006) regulating working hours and welfare standards for crew.

The Group has worked hard with its technical managers to implement crew welfare initiatives, including:

  • Onboard wellbeing: healthy menu plans, mentoring, sharing best practice;
  • Access to 24/7 radio medical helpline, giving medical advice to seafarers whilst at sea; and
  • Provision of enhanced high speed broadband capability, allowing better and more frequent communications with their families ashore.

Diversity and inclusion

Our Board is committed to creating a diverse and inclusive environment where everybody’s contribution is appreciated, and their voices are heard. Our Board believes that variety in gender, age, ethnicity, and personal traits, among other things, contributes to a more balanced and successful team. Board nominees are chosen on the basis of merit and a set of objective criteria. Our Board is dedicated to being non-discriminatory and believes in offering equal opportunity to everyone, of which is stated in the Company Diversity & Inclusion Policy, which is reviewed annually.

Our Board has 75% female independent directors, and our office-based personnel consist of 50% female members.

7. Governance

Robust governance is embedded in our constitution as a Guernsey investment company listed on the Premium Segment of the London Stock Exchange. ESG is embedded within our central governance framework. We adhere to the AIC Code of Corporate Governance (the “AIC Code”) and we are a Member of the Association of Investment Companies (“AIC”). The AIC Code addresses the principles and provisions of the UK Corporate Governance Code (the “UK Code”), as well as setting out additional provisions on issues that are of specific relevance to the Company. The Board has recognised that climate change and related risks will have an impact on the business and has started to develop our plan to become a net-zero business. Climate considerations are embedded within our broader ESG governance framework, where climate-related risks and opportunities are considered at each level of the organisation.

Role of the Board and ESG and Engagement committee

The Board and the ESG and Engagement Committee oversee the strategic direction and evolution of our ESG strategy, consideration of climate related risks and opportunities and corporate policies.

Specific roles include:

1 Integration of ESG factors and climate-related risk into investment decisions and core business strategy

The Board, with the advice of the ESG and Engagement Committee, ensures continued integration and consideration of ESG matters into our core business strategy, organisation, and investments. At an investment level, the Board takes into consideration the ESG credentials and climate-related resilience of a potential asset

acquisition, including consideration of historic environmental performance and energy efficiency metrics. These factors are also taken into consideration in asset divestment decisions.

2 Climate-Related Risk

The ESG and Engagement Committee is responsible for identifying and evaluating climate-related risks, advising the Board on appropriate and effective risk management and ensuring internal controls are in place.

3 Group ESG Policy

Our ESG policy is set by the independent ESG and Engagement Committee, chaired by Helen Tveitan. The committee meets at least four times throughout the year and the policy is reviewed at least annually.

Group policies:

  • Anti-Bribery and Corruption;
  • Code of ethics;
  • Modern slavery;
  • Whistleblowing;
  • Sanctioned and High Risk Jurisdictions;
  • Conflict of interest;
  • Prevention of tax evasion;
  • Diversity and inclusion;
  • End of vessel recycling policy.  

Industry and legislative engagement

Engagement with third parties and industry groups is paramount in the shipping industry. We interact with a number of stakeholders on a daily basis, and we are an active participant and contributor to several industry associations. These bodies are tackling some of the key challenges the shipping industry faces and require collaborative efforts and a platform for regulatory authorities, asset owners, operators, charterers to interact and tackle some of the most pressing industry challenges.

These associations include the following:

1. The Neptune Declaration on Seafarer Wellbeing and Crew Change:

2. Getting to Zero Coalition

Through our Commercial Manager we are represented at the following associations

3. Hong Kong shipowners’ association

4. Intercargo

5. MACN

Any participation or membership is subject to prior approval by the ESG and Engagement Committee.

FY22 Highlights:

SDG

ESG priorities

Progress in FY22

 

SDG 9: Industry, Innovation and Infrastructure

SDG 13: Climate action

Responsible Investment

  • Acquisitions aligned to the Group’s ESG commitment and focusing on vessels of relatively energy efficient design, built in Japan;
  • ESG internal assessments undertaken during due diligence phase are prioritised to address potential gaps. This allows us to make informed decisions on the potential environmental performance of a new vessel.

 

SDG 13: Climate action

 

SDG 14: Life below water

Climate change and environmental management

  • Emissions target commitment: committed to achieving a long-term target of net zero emissions;
  • Fleet energy efficiency measures: ongoing, comprehensive programme to improve vessel energy efficiency, including retrofits at scheduled maintenance events, including boss cap fins, wake-equalising ducts and advanced hull coatings;
  • Plastic reduction onboard campaign: full fleet roll out of water mineralisers and re-usable water bottles, reducing the use of single use plastic onboard;
  • Real-time emissions data: daily monitoring of fleet emissions and carbon intensity metrics;
  • Protecting marine biodiversity: entire fleet to be fitted with Ballast Water Management Systems by end of 2022, with one final vessel to be completed in 2023;
  • Reducing sulphur emissions: exclusive use of very low sulphur fuel.

 

SDG 8: Decent work and economic growth

Onshore and at sea safety

  • Selection of technical managers with high safety standards: ongoing monitoring of safety KPIs, safety protocols in place onboard vessels and incident sharing;
  • Promote safety at sea and prevention of human injury/loss of life, exceeding regulatory standards for crew;
  • 24/7 remote/telephone medical assistance for seafarers at sea;
  • Safety training: training and seminars for officers and crew to promote safety culture, strict drug/alcohol policies and a whistleblowing policy for crew;
  • • Additional O2 tanks supplied during the onset of COVID-19 as well as supply of O2 concentrators.

 

SDG 13: Climate action

SDG 16: Peace, justice and strong institutions

Compliance and conduct

  • Environmental regulations: well positioned to meet the upcoming IMO regulations commencing from January 2023;
  • ESG reporting: commitment to transparency and strong ESG reporting.

 

SDG 8: Decent work and economic growth

Community and employee engagement

  • Supporting crew welfare initiatives: signatory to the “Neptune Declaration on Seafarer Wellbeing and Crew Change”;
  • Training and development: supporting seafarer cadet training programmes onboard vessels;
  • Community support: supporting charities which align with our core values.

 

SDG 16: Peace, justice and strong institutions

 

SDG 17: Partnerships for the goals

Strong Corporate Governance

  • Premium listing on LSE: ensures strong corporate governance and adherence to UK’s highest standards of regulation;
  • ESG Policy steered by independent board ESG committee;
  • Diversity in action: 75% female independent directors and 50% female executive team;
  • Zero tolerance of bribery and corruption: active members of Maritime Anti-Corruption Network.

8. Disclaimer

This information which has been complied by Taylor Maritime Investments (TMI) does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) form the basis of, or be relied on in connection with, any contract in connection therewith.

This information is not a financial promotion and should not be taken as an inducement to engage in any investment activity and is for the purpose of providing background information about TMI only.  No recipient of this information should engage in any behaviour in relation to securities or financial instruments in TMI which would amount to an offence under the EU Market Abuse Regulation.

No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information provided, or for any opinions expressed by TMI in relation thereto.  Neither TMI, nor any of TMI’s advisers or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this information or its contents or otherwise arising in connection with this information.  The information may be subject to updating, completion, revision, verification and amendment and such information may change materially.  Neither TMI nor any other person is under an obligation to keep this information current. 

This information may contain certain forward-looking statements with respect to the financial condition, results of operations and business of TMI.  These forward-looking statements represent TMI’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainty that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.  TMI’s targeted returns are based on assumptions which TMI considers reasonable.  However, there is no assurance that all or any assumptions will be justified, and TMI’s returns may be correspondingly reduced.  In particular, there is no assurance that TMI will achieve its dividend targets (which for the avoidance of doubt are targets only and not profit forecasts).