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2020

Annual report

Environment

Managing GHG and climate risk, environmental emergency preparedness, biodiversity, waste and water and ship recycling.

As a global logistics company operating a fleet of ocean vessels and trucks, managing our operations’ environmental impacts is crucial to our success. Our business’s most material environmental issues are GHG and non-GHG emissions, environmental emergency preparedness of our ships, vessel recycling, biodiversity (ballast water and hull fouling), waste and water consumption on land and sea. In recent years, managing our GHG emissions and related climate risks has moved front and centre. It has become even more clear that greenhouse gases contribute to global warming and that carbon emissions are creating climate risks for our company, industry and stakeholders.

The financial community has galvanised broad support for more robust climate-related disclosures, a movement we embrace as a public company committed to transparency. Our industry, global logistics, is considered a hard to abate sector. Climate change presents us with physical risks such as changing port conditions and transition risks such as a changing regulatory landscape, customer demand for sustainable logistics, and even fuel availability. Our main climate risks are extreme weather, cost of carbon (by way of regulation), access to and cost of capital, and technology risk.

Climate Risk governance

The Board of Directors has a strong awareness of climate risks and opportunities and is committed to actively engaging management and business partners to find bold solutions. The entire Board of Directors reviews the company’s Long Term Strategy, Annual Sustainability Report, and sustainability objectives, metrics and targets annually. In 2020, the company’s leadership engaged in a high-level assessment of our Climate risk management, based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

Climate Risk management

We believe that climate change creates potential risks for our business but also presents opportunities, and both climate risks and opportunities are part of the company’s Long Term Strategy. Climate risks are also identified and assessed on an ongoing basis as part of our overall risk management. The company’s Sustainability Management System is used to track all ESG objectives and KPIs, and data is collected and reported monthly to top management. Our ESG risk approach’s foundation is a materiality assessment that management conducted to identify the most material risks and topics for our value chain, including GHG emissions from our ocean vessels and logistics operations.

Climate Risk strategy and targets

We have taken several strategic steps to diversify services, reduce emissions and invest in innovation and technology. Our Long-Term Strategy prioritises innovationas we recognise a pressing need for significant innovation in the industry to reduce emissions and meet global emission goals.

After achieving a CO2 intensity target reduction 12 months ahead of schedule in 2019, we developed  Science-Based Targets to guide our zero-emissions journey with emission reduction targets in line with current climate science and the Paris Climate Agreement.

To track progress, the company measures Scope 1 and Scope 2 emissions and discloses them annually in this report, according to the GHG Protocol. Emissions are also part of the company’s KPI Dashboard, visible to all company managers.

*) 2019 is the base year

Environmental Emergency Preparedness of Ships, Ship Recycling, Biodiversity, Air Quality, Water and Waste

While operating a large fleet of ocean vessels in near-continuous operations, environmental emergencies may arise within and outside the company’s control. Our approach to managing this risk is to prepare to ensure an optimal emergency response. The Marine Operations Management team has the overall responsibility for ensuring the fleet’s emergency preparedness. In practice, this is done indirectly through close collaboration with the fleet’s various ship management companies responsible for the spill response readiness of the individual vessels.

The focus of preparation for all vessels owned by Wallenius Wilhelmsen is on IMO Shipboard Oil Pollution Emergency Plans and Oil Pollution Act 90 drills. The regulations stipulate that drills are conducted at least biannually. They are organised by the ship managers, who are also responsible for providing adequate response tools and materials.

If an environmental emergency does occur, the company’s Emergency Response Reporting Routines Policy is enacted so it can respond quickly and effectively to minimise environmental impact. The policy includes immediate notification from the vessel to the Marine Operations Management team, who are responsible for the company’s emergency response.

Ballast water from vessels and hull fouling on vessels are known to contribute to invasive species’ spread. Invasive species are not merely a reputational risk for ocean carriers. They can wreak havoc on biodiversity, killing off native species and harming local ecosystems and economies. Protection of marine ecosystems is essential for environmental and economic reasons and remaining compliant with such regulations is critical to our success.

We manage our potential impacts on biodiversity by deploying Ballast Water Treatment Systems (BWTS) on our vessels and enrolling our entire fleet in an innovative anti-fouling programme. Both efforts are designed to minimise the danger of invasive species being introduced into port and harbour communities by our operations. As well as lowering the threat of transferring invasive species, hull-fouling also provides a vessel with significant fuel efficiencies.

Wallenius Wilhelmsen’s Marine Operations Management team oversees vessel retrofitting of BWTS according to the regulatory schedule, and external ship management companies are responsible for ongoing compliance with ballast water management regulations. The Marine Operations Management team also oversees Wallenius Wilhelmsen’s hull fouling management and policy. The ship management companies are charged with continual compliance with regulations and implementing our vessel and fleet policies.

Wallenius Wilhelmsen actively searches for new ways of working that will reduce waste and unwanted cost associated with undesirable environmental impacts. The Marine Operations Management team is responsible for overall policies, processes and procedures for water and waste management and recycling practices on the fleet. At the same time, ship managers ensure that the policies and requirements set by the company are followed on individual vessels.

To improve our environmental performance continuously and help us navigate to zero emissions, we measure, manage and report on our performance in the following material areas: emissions, environmental emergency preparedness, ship recycling, ballast water, hull fouling, bio-security, water and waste management.

Relevant internal governance documents

Wallenius Wilhelmsen Environmental Policy, Vessel Recycling Policy, Biofouling Management Policy, Ballast Water Management Policy, Ship Operation and Maintenance Policy.

Review of progress in 2020

Our annual Scope 1 emissions were 20% lower in 2020 (3,772,582 tonnes CO2e from 4,695,394 tonnes CO2e in 2019), mainly due to the COVID19 pandemic and related economic shutdowns. Reductions in emissions from the ocean fleet account for nearly all the group’s CO2e reduction. Scope 2 emissions (from electricity consumed in 2020) were roughly equal to 2019, at just over 6,000 tonnes CO2e.

While CO2e emissions from Shipping services were 20% lower than in 2019, CO2e from Logistics services remained nearly constant with 2019 levels, even though overall production volumes were lower in 2020. Many processing facilities continued to operate even with lower volumes due to a growth in the customer base from 2019 to 2020.

In 2020, total SOx emissions of the Ocean shipping fleet were 8,945 tonnes, a significant reduction from 60,989 tonnes in 2019. The average sulphur content of fuel for the ocean fleet was about 80% lower than in 2019 (.38% vs 2% in 2019), accounting for the dramatic reduction of SOx emissions. This was due to the successful implementation of IMO new global sulphur cap on 1 January 2020, mandating a limit of 0.50% sulphur for all areas that are not already at 0.10%.

Guided by a commitment to continuous improvement, we published a revised Environmental Policy, updated to include new topics important in our industry, including raw materials, conflict minerals, and the responsible management of chemicals.

We continued to manage our impacts on biodiversity by installing nine company-owned vessels with Ballast Water Treatment Systems (BWTS) in compliance with the regulatory schedule. By the end of 2020, 48% of the company-owned fleet of 86 vessels has a BWTS installed. The remainder of the fleet complies with requirements through ballast water exchange. 100% of the owned fleet was also enrolled in hull biofouling management programmes.

Garbage sent for recycling from Ocean vessels slightly increased due to special provisions for preparing 16 vessels for a cold layup, among other lesser factors.  Garbage generated by Logistics services was down by 22% compared to 2019.

 

Environmental KPIs, performance data & targets 

KPI description Unit of measurement 2020 2021 target 2030 target

CO2e intensity from Shipping

 

grams CO2/ tonne km

 

33.51

 

-2.5%1)

 

-27.5%1)

Scope 1 CO2e emissions from Shipping

Tonnes CO2e 3,764,260 n/a n/a

Scope 1 CO2e emissions from Logistics

Tonnes CO2e 8,322 n/a n/a

Scope 2 CO2e emissions (from electric consumption), Logistics

Tonnes CO2e 6,166

Average sulphur content of fuel, Shipping

Percentage 0.38% n/a n/a

Total SOx emissions, Shipping

Tonnes 8,945 n/a n/a

Total number of significant spills (> 20 litres), Shipping

Number of incidents 0 0 0

Non-compliant environmental breeches (release, spill or discharge) reported to authorities, Logistics services

Number of incidents 2 2 0

Percentage of owned fleet enrolled in hull fouling management programmes

Percentage 100% 100% 100%

Number of Ballast Water Treatment Systems installed on own vessels;

Number of installations 9 202) n/a

Percentage of fleet implementing ballast water exchange; and

Percentage 52% n/a n/a

Percentage of fleet implementing ballast water treatment

Percentage 48% n/a 100%

* Performance data for all KPIs we measure available on pages 62-64.

1) Baseline for CO2 targets in 2019.
2) Annual Target is set every year according to the fleet’s annual Regulatory Schedule of installations.