Shipmanagement Under Sustainability Standards

The ISM regulation over the shipping activity has evolved as a new approach to safety, in response to marine disasters. Similarly, Corporate Social Responsibility (CSR) guidelines for a new more holistic, although voluntary approach of the business mission, have evolved, due to the new social and environmental parameters, e.g. need for corporate governance, transparency, social cohesion against inequalities and climate change.

Corporate citizens of today are expected to do well, by targeting in doing good. A corporate strategy that considers citizenship parameters, e.g. social inclusion and Global Warming, is gradually becoming an important factor of sustainable business growth. A company leader in times of economic crisis could, therefore try to invest in a new business approach of doing business in a socially responsible way.

However, is this pattern acceptable by the shipping industry? Are shipping executives individually sensitized towards all their stakeholders, proactively and responsibly changing their business strategy over those issues?

A pioneer shipping company could implement Business Models of uniform standards that guarantee that transparency, corporate governance and sustainability, same as those that all the other sectors & industries successfully apply. Those Models aim to enhance their members’ leadership and professional skills by applying standard sustainability principles. Business Excellence Models, Guidelines or Standardized Management Systems ( e.g. UN GRI, AA1000, ISO 26000, EFQM, Investors in People) do not compete but are mutually supportive, providing methodology and assessment over Excellence, Sustainability and Total Quality through multiple criteria.

Upgraded and standardized Business culture of Ethical and socially responsible patterns, have gradually become more familiar and comprehensible to the internal & external stakeholders, by identifying an organization as recognized for its sophisticated business methods. However, there is a risk that such performance is not highly recognized, if not properly reported and mainly if measurements reported, were not verified as ‘true and fair’.

Corporate Social Responsibility (CSR), as a way of performance management in shipping is still at a primary stage compared to other industries, since this industry does not care to follow generally spread management and marketing practices of social profile. Shipping is a volatile and highly competitive business sector with unique Management practices, afloat by nature with activities of transnational reach.

By implementing standard CSR best practices, shipping companies persuasively prove to their customers (charterers) that they are assessed according to the same Quality and Excellence Management standards as the industries ashore.

Businesses that, via models, achieve positive results enjoy extended positive publicity & media coverage as role models at awareness campaigns in International or national fora. Corporate Governance & CSR frameworks are guidelines to internally check if the company is on the right track to excellence, led by ethics.

Excellent organizations measure regularly their impact to society, exchanging information over social responsibility best practices, and by reporting their sustainability progress they accept social auditing that gives them an important competitive advantage. An Excellence culture is better enabled, once an Excellence model, policy and strategy are fully deployed and implemented in the company.

Excellent companies have leaders who are role models of a culture of Excellence. They implement their mission, vision, policy and strategy, based on the present and future needs of their stakeholders, because their people are involved, empowered and cared for. As long as the drive to Excellence is voluntary, there are promotional incentives in order that ship managers decide to implement a CSR / CC performance.

Self-regulation in the shipping industry has proven over the years to be the only way forward given its fundamentally international character and its ability to self enforce, as well as due to its long history of not succumbing to political interests and not trying to satisfy public opinion at its own expense. In this respect the IMO has played an excellent host/venue for the shipping industry to bring forward and debate self regulation usually much earlier than other industries, that look towards national governments and/or supranational and regional associations for regulation and enforcement .

However, a shipping company consists of a SME (Small Medium Enterprise) of 10-50 employees ashore, despite of its complicated economic presence. Due to its limited human resources ashore, it may not systemically benefit from Sustainability standards mainly designed for large inland industries with marketing, PR, CSR and HR special departments.

Moreover, Shipping has its own fully specialized and qualified consultants to obtain an initial guidance over Excellence performance. Classification societies are certified to verify standards that interest the shipping industry and have a worldwide competent network in order to assess and verify CSR and Climate Change (CC) reported practices.

Yanna Pavlopoulou

Co-founder, CEO and General Counsel of CommonLawgic

Lawyer, LL.M. (Georgetown) MSc (Liverpool JMU/Shipping)

CSR Practitioner and Climate Change Leader (IEMA UK)

Sustainability Report Verifier on behalf of Lloyd’s Register

13, Ag. Konstantinou, Piraeus, 18532, Greece

ypav@commonlawgic.org www.commonlawgic.org