Environment

Drawing on our Natural Capital

The primary environmental impacts of shipping are emissions and discharges. At sea and in port, these outputs are substantially all regulated and compliance is enforced across international, regional and local jurisdictions.

We recognise our responsibility to reduce the impact of our operations on air, sea and land, and our Pacific Basin Management System is designed to measure and continually improve every aspect of fleet operations, including our environmental outputs.

• One of the ways we reduce the environmental impact of our operations is by our efficient operation of modern ships designed and equipped for efficiency.
  
  
• Through our largely counter-cyclical acquisition of newbuilding vessels and modern second-hand ships, we renew our fleet with new or modern ships of the best, efficient designs and equipped with technical enhancements that reduce atmospheric emissions and marine discharges.
  
  
• Similarly, we retrofit our existing ships in operation with technical enhancements that reduce atmospheric emissions and marine discharges, and we adopt operational measures to minimise our ships’ fuel consumption and emissions.
  
  
• Environmental measures embraced by our employees at sea and ashore include training and defined policies and practices such as reducing our consumption of electricity, water and other materials, and recycling.
  
  
• Our policies and guidelines are designed to promote environmental awareness, mandate environmentallyfriendly activities and promote similar behaviour at work and in the communities where our ships trade and our employees live and work.
  
  
• The first step to improving the environmental performance of our fleet is to monitor, measure and analyse the outputs of our vessels. From there, we can assess and adopt measures to reduce our environmental impacts, with performance improvements achieved through both technical and operational enhancements.
  
  

Tackling our Environmental Responsibilities

Propelling a vessel across oceans requires many resources, the outputs of which impact the environment, as summarised on page 12.

We take a holistic approach to reducing our operations’ impact on the atmosphere, sea and land. Our Pacific Basin Management System ashore and at sea conforms to the mandatory International Safety Management (ISM) Code and is also certified by Lloyd’s Register Quality Assurance (LRQA) to voluntary standards, including ISO 14001:2004 for our environmental management system. We track the effectiveness of our Environmental Management Systems using KPIs.

Environmental Responsibilities

We seek to minimise our impact on the environment from atmospheric emissions, resource consumption and marine discharges

through the adoption of energy-efficient and environmentally-friendly ship designs, technologies and practices at sea and ashore. The information below is a summary of significant initiatives we pursue to reduce our environmental impact.

Atmospheric Emissions & Fuel Efficiency

The main measures and technologies we use to minimise our emissions include:

Fuel-efficient Operational Measures

• Upgraded adaptive autopilot systems reduce rudder movements and improve course-keeping by automatically adapting to load characteristics and weather conditions.
  
  
• Our proprietary Right Speed Programme determines optimal operating speeds based on prevailing freight rates and fuel prices.
  
  
• Optimal scheduling of our fleet coupled with fuel-efficient voyage planning minimises ballast passages resulting in fuel savings.
  
  

Improving Hull and Propulsion Hydrodynamics

• Fitting propeller boss cap fins improves propulsion hydrodynamics, which improves fuel efficiency and reduces emissions.
  
  
• Application of anti-fouling paints over a larger hull area reduces drag and improves fuel efficiency even when fully laden.
  
  
• Computer-aided calculation and monitoring of hull performance over time allows us to optimise hull condition management.
  
  
• By continually renewing our fleet, we introduce ships with fuel-efficient hull designs and machinery which reduces fuel consumption.
  
  

Improving Engine Performance

• Fuel combustion catalysts facilitate more complete and cleaner combustion. This leads to fuel savings and reduces the frequency of engine overhaul maintenance.
  
  
• Computer-aided optimisation of cylinder lubrication and machinery overhaul intervals leads to reduced fuel and lubricating oil consumption.

CO₂ Emissions Performance in 2016

Due to the above technological and operational measures and the overall efficiency of our large, modern fleet, our carbon intensity remains among the lowest in our segment. Our aim is to maximise cargo carried per tonne of energy consumed. Our fleet’s carbon emissions in 2016 increased 3% to 11.02 grams of CO2 per tonne-mile, as calculated using the industry-standard ship Energy Efficiency Operational Indicator (EEOI) method. The increase was due to our faster average operating speeds as optimised by our proprietary Right Speed Programme based on prevailing freight rates and fuel prices. The increase was positively partly offset by the increased efficiency of our fleet as our newbuilding programme delivers. We continued to apply technologies and practices that we implemented in earlier years to minimise our fuel consumption and emissions, and benefitted from the delivery into our fleet of new ships of efficient design. In 2016, we added six modern ships to our fleet on the water, and the average age of our owned ships was 8.5 years as at 31 December 2016. Four more have delivered in early 2017 and three further ships remain contracted to deliver into our owned fleet by mid-2017 – all efficient and of the best design for our trades.

Marine Discharges & Waste Management

The main measures and technologies we use to minimise our marine discharge and waste include:

Reducing Marine Discharges

• Our ISM-compliant safety management system prescribes system controls, procedural safeguards and training to prevent and respond to oil spillage.
  
  
• Oily water separators minimise the risk of inadvertently pumping out contaminated bilge water.
  
  
• IMO-compliant ballast water management plans set out strict practices to minimise the spread of aquatic species.
  
  
• We use biocide-based paints and monitor advances in more eco-friendly paints.
  
  

Waste Management

Garbage compactors on our ships facilitate easy storage of operational garbage (excluding food waste and cargo residues) until it can be disposed of responsibly on shore.

Marine Discharge, Pollution and Waste Performance in 2016 We aim to not have any pollution incidents. In 31,700 ship days in 2016, our owned fleet committed no marine pollution violations (2015: no pollution violations). This MARPOL performance is indicative of the effectiveness of our Pacific Basin Management System and the high standard of professionalism of our seafarers.

Green Efforts Ashore

Across our offices ashore, we do what we reasonably can to minimise our footprint by addressing environmental elements that are within our control.

Guidelines and communications are regularly posted and policies and practices are in place across our network of offices to:

• Reduce consumption of electricity, water and materials
  
  
• Recycle office waste
  
  

Pacific Basin was awarded a Silver Label in the WWF’s Low-carbon Office Operation Programme that measures and tracks outputs and Energy Consumption from our headquarters in Hong Kong.

An independent audit of our environmental performance determined that our office in Hong Kong (where 59% of our shorebased staff work) produced carbon emissions of 1,067 metric tonnes for the 2015/2016 audit year (2014/15: 1,329).

Our Hong Kong headquarters’ carbon intensity in 2016 reduced 20% to 5.3 tonnes CO2 per employee due to a number of initiatives including:

• eliminating ten computer servers;
  
  
• more Skype-based video meetings reducing the need for air travel; and
  
  
• switching from business class to economy class air travel.
  

Our Pacific Basin Management System ashore and at sea conforms to the mandatory International Safety Management (ISM) Code. It is also certified by Lloyd’s Register Quality Assurance (LRQA) to voluntary ISO 14001:2004 standards for our environmental management system.

We also disclose our carbon footprint data through: the Carbon Footprint Repository (CFR) developed by Hong Kong’s Environment Bureau for listed companies in Hong Kong; and the HKQAA Sustainability Rating and Research for the Hang Seng Corporate Sustainability Index Series.