Sustainability at A.P. Moller - Maersk

We pursue a commercial strategy on sustainability aiming to respond to and aid customers on their decarbonisation journey, however far they have come.

A key feature in this is the Maersk ECO Delivery product. Launched in 2019, it remains one of only a few options for net zero emissions shipping on the global market so far. Maersk ECO delivery uses externally certified biodiesel in the form of used cooking oil to power vessels in our network. The CO2 savings generated from this are used to neutralise emissions related to transport of specific cargo by customers. In 2020, customer uptake of Maersk ECO delivery shipping exceeded our expectations.

Most importantly, however, we are learning that the commoditised freight market is open for price differentiation related to sustainability. Driven by the end-consumers' increased willingness to pay for sustainability, and growing climate urgency, this represents a solid contribution to the development of a business model for decarbonised logistics and transport, lowering the risk we take on when investing in the development of decarbonised logistics and transport services (shipping, rail, road, air).

The physical effects of climate change are already evident in the form of heat and water stress, precipitation, storms, and rising sea levels. These effects will intensify regardless of collective action taken today to decarbonise, just as physical climate change risk for our customers and our business operations will increase.

Moreover, the transition to a 2.0-degree pathway will likely be a source of major disruption (transition risk) in and of itself because of the accompanying government policies and changed consumption patterns. And a 2.0- degree pathway will entail ongoing material risk of accelerated climate change (tipping points) and abrupt policy changes in response.

These scenarios confirm to us the urgency of climate action to mitigate the risks to our own business and stay relevant in the market by supporting our customers to decarbonise their supply chains. Climate change, more specifically the risk of not decarbonising our end-to-end supply chain at a speed that matches our customers’ and investors’ expectations, was in 2020 confirmed by our executive leadership as one of the top enterprise risks to Maersk.

Read about our 2020 performance and activities on pages 16-22 in the 2020 Sustainability Report.

The transition will not happen without strong regulatory frameworks. These processes take time, but there is real benefit to having a global solution to create a more level playing field. Adequate policy frameworks must not only secure that low performers are held accountable, but also that the first movers are rewarded for the risks taken on behalf of the whole industry.

In parallel, private action and advocacy initiatives should also continue. We are very proud to have been part of the launch in 2020 of the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping. This independent centre will engage scientists from all over the world in trying to find solutions on fuels for shipping.

We continue to engage actively in the Getting to Zero coalition, and beyond our own sector we have joined with a group of other leadership companies in the Transform to Net Zero initiative, launched in 2020, which aims to lead by example, developing guidance and pilot projects to enable all businesses to achieve net zero emissions.

We have conducted extensive analyses of the available technology and fuel options for net zero carbon operations.

Based on this work, we have concluded that there are technologies that are mature enough for us to participate in their development to scale by acting as an ambitious customer.

In response to the increased urgency of delivering on decarbonisation, we believe that the right thing to do is to leapfrog to pure net zero vessel technology without any transitional technologies.