Summary
Details
- Global
The Poseidon Principles are intended for financial institutions involved in ship financing, including:
- Commercial banks providing shipping loans
- Leasing companies financing vessels
- Financial guarantors and export credit agencies
The framework applies to credit products secured by vessels, such as bilateral loans, syndicated loans, and finance leases tied to ships. It generally covers vessels that fall within the scope of the IMO Data Collection System (DCS), typically ships of 5,000 gross tonnage and above engaged in international trade.
Deep dive
📩 Stay ahead of climate regulation and reporting shifts
Regulatory updates, reporting standards, and new climate software — distilled into one concise weekly brief for decision-makers.
Thanks for signing up. Please check your inbox to confirm your subscription.
Practical updates. Once per week.
Overview
The Poseidon Principles are a voluntary global framework designed to measure and disclose the climate alignment of financial institutions’ ship-finance portfolios. The initiative was launched in 2019 by a group of major shipping banks with the objective of integrating climate considerations into maritime lending decisions.
The framework establishes a common methodology for assessing whether the vessels financed by participating institutions are aligned with decarbonization trajectories for the shipping sector. These trajectories are designed to be consistent with the greenhouse-gas reduction ambitions of the International Maritime Organization (IMO), including the objective of reaching net-zero emissions from international shipping around 2050.
By providing standardized metrics and disclosure practices, the Poseidon Principles aim to create a consistent global baseline for evaluating the climate alignment of ship-finance portfolios and improving transparency in maritime lending.
Reporting requirements for signatories
Financial institutions that adopt the Poseidon Principles must measure and disclose the climate alignment of their shipping portfolios each year. The reporting process typically involves several steps:
Collecting verified vessel fuel-consumption data through the IMO Data Collection System.
Calculating vessel emissions intensity, often using metrics such as the Annual Efficiency Ratio (AER).
Comparing vessel performance with decarbonization trajectories established under the Poseidon Principles methodology.
Aggregating vessel results into a portfolio-level climate alignment score.
Reporting the alignment score to the Poseidon Principles Secretariat and publishing it in institutional reports.
These disclosures allow stakeholders to evaluate whether financial institutions’ shipping portfolios are consistent with international climate targets.
Enforcement and verification
The Poseidon Principles are not a regulatory requirement and do not impose statutory penalties. Compliance is supported through several mechanisms:
Contractual covenants in ship finance agreements requiring borrowers to provide emissions data.
Standardized technical guidance that defines the methodologies and data sources used in climate-alignment calculations.
Annual public disclosures that create transparency and enable comparisons among signatories.
Financial institutions may also rely on classification societies or other recognized organizations to verify vessel emissions data and perform alignment calculations.
Current status
The Poseidon Principles are currently in operation as a voluntary framework used by financial institutions to assess the climate alignment of ship-finance portfolios. The initiative has continued to expand participation across the global ship-finance sector.
The framework is periodically updated through revisions to its Technical Guidance, which defines the methodology used by signatories. The most recent update (Version 5.2) was released in July 2025, introducing updates to the climate-alignment methodology, including revised well-to-wake emission factors used in portfolio assessments.
Resources
Cut through the green tape
We don't push agendas. At Net Zero Compare, we cut through the hype and fear to deliver the straightforward facts you need for making informed decisions on green products and services. Whether motivated by compliance, customer demands, or a real passion for the environment, you’re welcome here. We provide reliable information. Why you seek it is not our concern.