Green apple or red herring?

Malcolm Latarche
Malcolm Latarche

16 December 2016


While the shipping industry digests the latest EU proposal to include shipping in the EU emission trading scheme, it is worth reflecting on a recent development in the US. Shipping is often told that it must ‘green’ up because its customers and the wider public are demanding that it does. Despite some shippers requesting information about carbon footprints, most shipowners know that deep down it is the price that is the main deciding factor. Recently a shareholding lobby group at computer and electronics giant Apple pushed for official sanction against the company by the US Securities and Exchange Commission arguing that the company’s plan to achieve its 100 percent renewable objectives remained unclear, and that Apple officials should provide specific details and a timeline for implementation. Apple’s defence extolled the company’s efforts to reduce carbon emissions saying, “The company has gone to great lengths to provide its shareholders and the general public with detailed information, available on the company’s website, about its greenhouse gas emissions and energy use,” But while making that statement it also asserted that the proposal inappropriately allows for shareholder oversight of “numerous aspects of the Company's business which are simply too complex for shareholders to understand fully based on the limited information available to them.” The defence argument also said “The company is not in a position to require its major suppliers to change their business operations to reduce their emissions or engage in other operations to offset their emissions. Because the Company cannot compel its major suppliers and regulatory agencies in countries where they operate to take action on carbon emissions as requested by the proposal, it is impossible for the company to produce the plan without intervening actions by third parties.” Like many corporates in the west, Apple has chosen to outsource much of its manufacturing to the Far East and can conveniently hide behind such arguments which it may not be able to do if manufacturing took place in the US or in Europe. In the light of that, attempting to force shipping lines to reduce their carbon footprint is somewhat hypocritical. That shipping lines feel obliged to pay lip service to the idea that they can help reduce shippers carbon footprint is one of the reasons why regulators see them as a soft touch. Perhaps if they were more prepared to take on regulators rather than mollify them, the industry would be in a better position than it currently is.