The shipping company’s sustainability efforts at a time of rough seas are laudable. It should be doing more to trumpet them
Maersk, the world’s largest shipping company, has been buffeted by a bleak economic climate, with a slowdown in China, a weak recovery in Europe and overly optimistic growth projections for emerging markets. Its profits fell a painful 84% last year.
But the group remains upbeat about its sustainability strategy. Since the group first launched this strategy in 2010, it has demonstrated progress based on a systematic approach of integrating sustainability into the business and reporting on material issues. The 2015 sustainability report follows this format, with the mantra that “trade unlocks growth”.
From the outset Nils S Anderson, CEO of the AP Moller–Maersk Group, acknowledges that the Danish company must adjust to the market outlook to stay competitive. In an effort to make the group “leaner and simpler” Maersk announced last year it would let go 4,000 of 23,000 onshore staff by the end of 2017. It is now focusing on growth through acquisitions.
The current four-year sustainability strategy, launched in 2014, focuses on the same areas as the original strategy: trade, climate change and education. But there is a change to the drivers of progress, most notably education, which no longer focuses on strengthening the Maersk talent pipeline. Instead, the focus is on supporting relationship-building for the group in selected markets.
The report is structured around three sections: systemic issues, managing impacts and community engagement and investment.
“Systemic issues” covers trade and climate change as well as anti-corruption, ship recycling and partnerships and collaboration. This section recognises that Maersk’s actions alone are not enough to mitigate risks to the company’s business objectives, and that change at a systems level is the only solution. For example, the section describes continued efforts in Maersk’s pilot projects to improve processes and procedures for trading across borders and improving local businesses’ ability to access global markets. Given Maersk’s resolute belief in growth through trade, this section could have been used as a showpiece for its strategy. Instead, the case studies on sustainability efforts, such as the shipping information pipeline, merge into the text-heavy narrative, barely standing out as achievements.
While Maersk continues with its target to reduce CO2 emissions by 30% by 2020 compared with the 2010 baseline, emissions at group level grew in absolute numbers compared with 2014.
It is forceful on the issue of decoupling emissions from growth, but this vision is mired somewhat by the reporting of a 10% increase in Maersk Oil’s CO2 emissions due to “a general increase in production activities”. In general Maersk does not enter into the discussion of fossil fuels’ contribution to climate change, which is disappointing in light of COP21’s commitment to a transition away fossil fuels.
The “managing impacts” section devotes a good deal of space to human rights, safety and the environment. Human rights concentrates on the process of respecting and managing human rights impacts without actually disclosing any human rights abuses by the group. This approach feels formulaic and text-heavy, and perhaps a missed opportunity for Maersk to show a high level of transparency, as it does in the area of safety.
Safety is the most material sustainability issue for the group, going to the heart of Maersk’s value of “constant care”. The discussion focuses on fatalities in port terminals and process safety in preventing and dealing with oil spills and explosions. Overall, Maersk delivers a full and frank discussion on the issues, neatly linking safety to employee wellbeing, its social licence and productivity.
In “community engagement and investment” the report concentrates on the third element of Maersk’s sustainability strategy: education. The focus on growth through acquisitions means that education is relegated to the status of “added benefit” for the business in the long term. Generally this section feels much like an afterthought, with a lack of any stated goals, or any visual aids to help illustrate some admirable achievements in humanitarian relief and assistance.
Maersk had a tough business year but managed to maintain its commitment to sustainability. This comes through in the report, but only once the reader has extracted the much over-written story. Showcasing its sustainability performance in this way leaves the reader feeling underwhelmed, which is a shame, considering the company has a relatively good story to tell.CSR economic climate sustainability strategy climate change emission