We have been publishing annual sustainability reports since 2010, demonstrating our commitment to sustainability by fully and transparently disclosing our performance and progress in all material areas covered by ISO 26000:2010. Sustainability issues continue to form a key part of our medium to long-term business strategy and senior management continues to monitor the management of substantive Environment, Social and Governance (ESG) factors across the SPO group and reporting them to our parent company, Swire Pacific Limited.
The process of meaningfully reporting our sustainability issues has helped us to understand the complex expectations of our key external and internal stakeholders and helps us fine-tune how these expectations can be used to positively impact our business.
In the short term we, along with nearly all global business must continue to manage our response to the ongoing COVID-19 pandemic to ensure the physical safety and mental wellbeing of all our employees. The pandemic has created significant hurdles to crew changes and repatriation of seafarers, and this is expected to linger on into 2021 until the pandemic is brought under control worldwide. We remain extremely focused on ensuring that crew changes are done safely and healthily for all, despite the increased cost to business that enforced quarantine measures through the crew relief process causes.
By a long mile, our key medium and long-term sustainability challenge is decarbonisation of our operations. Offshore fleets present a particular problem in that the ultimate decarbonisation solution of switching to a low or zero carbon fuel is constrained. This is due to the very limited space available for almost all alternate fuels that are less energy dense and thus require more storage space on small OSVs to deliver the same endurance. The other issue is the load profile of OSVs that can have long periods of "ticking over" on standby, interspersed with shorter bursts of high power when towing or on Dynamic Positioning (DP).
We recognise that we do not have the size to undertake sole viable major studies as alternate fuels reach higher Technology Readiness Levels (TRL). However, we do seek to be active knowledge partners with other industry and academic partners, where relevant, in joint studies on the likely candidates (all with pros and cons in areas of safety, sustainability, availability and cost of engine conversion) of Ammonia, Methanol, Fuel Cells, Hydrogen and Biofuel.
The concept of "peak oil" was first postulated by geologist M. King Hubbert whose 1956 paper first presented a formal theory. As of 2021, peak oil forecasts range from 2019 to 2040, depending on economics and how governments respond to global warming. The COVID-19 pandemic led to a sharp dip in demand for all energy as economies shut down to prevent the virus spreading between workers and consumers. But even with this reduction in total demand, and a change in its relative use between delivering grid energy generation, transport and chemical feedstock over time, as the excerpt from the latest IEA paper shows, oil and gas is forecast to be still providing just 20% less of world primary energy supply in 2050 than it is providing today. We will continue to evaluate supply and demand requirements in the years ahead very carefully and closely.
In order to exchange best practices and work towards the common goal of a more sustainable shipping sector, SPO is partnering with organisations in the marine sector, through collective initiatives such as the Sustainable Shipping Initiative (SSI), Ship Recycling Transparency Initiative (SRTI), the World Ocean Council (WOC), the Maritime Anti-Corruption Network (MACN), the British Chamber of Commerce in Singapore (BritCham), the Singapore NTU College of Engineering, Maritime Energy and NTU MESD CoE. SPO has also signed the Neptune Declaration on Seafarer Wellbeing and Crew Change.
We conduct regular "horizon-scanning" for even weak signals of change, and these are discussed at senior-most levels. We have strong support to make commercial decisions for both the general public good and enlightened self-interest. We undertake regular evaluations of our risk and opportunity profile, and put in place adaptive and mitigation strategies early.
For all these reasons we are in a good place to deliver both value-added and sustainable performance for the years to come.
General Manager – Sustainable Development, SPO
Top: Photo by Ilse Orsel on Unsplash