Lenders to shipping are increasingly considering climate performance when setting loan margins, a study has found. However, their focus remains on the corporate level rather than the asset level, potentially limiting their ability to mitigate transition risks.
The Lower margins are tied to companies’ climate performance rather than to low-carbon assets study by Marie Fricaudet, Sophia Parker, Nadia Ameli, and Tristan Smith, published in Cell Reports Sustainability, examines the lending practices of shipping debt providers. The researchers found that banks, particularly those signed up to the Poseidon Principles, have begun to price in the climate score of shipowners they lend to. This shift is largely attributed to the Paris Agreement and growing pressure for decarbonisation within the shipping sector.
However, despite the increasing importance of climate performance, the study highlights that lenders are not differentiating their margins based on a ship's carbon intensity. This suggests that while they are considering climate factors at the corporate level, they are not yet fully addressing the transition risks associated with individual assets.
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