Eimskip and Sustainability
Eimskip strives to provide its customers with the most efficient and sustainable transportation solutions combined with outstanding services, while securing a good return for its shareholders and being responsible towards its employees and society and the environment.
Eimskip defines society as one of its stakeholders. Other stakeholders are the Company’s shareholders, customers, and employees. Sustainability plays a large role in the Company’s operations, and environmental matters are important. Eimskip’s values are Achievement, Cooperation, and Trust. These values guiding in the Company’s endeavor to work for a better society, preserve and protect the environment.
As a company Eimskip wants to contribute to a better and safer society wherever it operates and responsibility towards the community is an integral part of its sustainability policy. The Company gave priority to improving sea safety, supporting environmental projects, charities, sporting activities, culture, and innovation and, last but not least, projects centered on youth and children and young adults.
The Company is especially proud of the bicycle helmet project, which began in 2004 in cooperation with Kiwanis (a global community of clubs, members and partners dedicated to improving the lives of children one community at a time). The Company has given all six-year-old children in Iceland bicycle helmets and safety reflectors to contribute to youth safety. Eimskip has given helmets to about 69,600 children.
SUSTAINABILITY AT EIMSKIP
Eimskip is a registered participant in the UN Global Compact, the United Nation's initiative for social responsibility concerning human rights, labor, environment and anti-corruption. The Company has committed to manage its business operations so that the UN Global Compact and its ten principles become an integral part of Eimskip's strategy, culture and day-to-day operations.
Eimskip’s Sustainability Policy is based on the Nasdaq ESG Reporting Guide, published in March 2017. The Nasdaq voluntary reporting guide focuses on 30 environmental, social and governance (ESG) performance indicators.
Throughout 2020, Eimskip continued working on sustainability. The Company focused on implementing Eimskip’s Sustainability Policy within the group and on developing measurements and goals. The Company also worked to further reduce the Company’s ecological footprint.
EXAMPLES OF ESG PROJECTS IN THE YEAR 2020
The Company received a formal certification in Iceland of operating the Equal Pay system, based on the Icelandic law on the Equal Position in Iceland. This certification confirms that processes and standards that have been implemented ensure that employees get equally paid for equally valuable jobs according to rules, regardless of gender or other objective points of view. The company’s vision for the future is that all employees are paid equal wages and enjoy the same terms of employment for work of equal value, including for those who work in other countries.
The Company started a partnership with the entrepreneurial company Pure-North Recycling, which is developing new solutions for recycling plastic in Iceland. The goal of this project was that all plastic that falls into warehouses in Iceland would be recycled with Pure-North to reduce The Company‘s carbon footprint.
Quarterly publication of environmental statements which is a great milestone in managing and monitoring The Company‘s CO2 emissions.
Launched a service for larger customers who can now get access to their carbon footprint for their transportation with Eimskip.
Two methane trucks were added to the Company fleet in November 2020. This is a very important step towards Eimskip goal of reducing the Company's CO2 emissions by 40% by 2030. It is important for companies such as Eimskip to participate in energy exchange and to try out new environmentally friendly alternatives.
Eimskip took delivery of two new vessels, Brúarfoss and Dettifoss in 2020. These vessels are made in line with environmental standards and designed to be very fuel-efficient.
In the third quarter, Eimskip collaborated with a consulting company to perform a risk assessment on the company's ESG and also on ESG training for all managers and employees worldwide. Based on the risk analysis, Eimskip prepared an action plan for the next 3 years regarding sustainability. The action plan took effect in November 2020, as one of the first tasks was to improve information on the company's website. Objectives were set to improve and review the company's strategy by establishing a team in the company's organization.
Policies that have been reviewed
Human Resource Policy
Code of Conduct
Equal Rights Policy and action plan for 2021-2023
New policies that have been approved
Whistleblower Policy
Money- Laundering Policy
Procurement Policy (OPEX)
Supplier Code of Conduct
FUTURE FOCUS
In 2021, the focus will be on further implementing Eimskip’s Sustainability Policy and the new policies that have been approved within the group. New global goals of the United Nations that are most closely linked to our operation and action plan will also be implemented. Eimskip will continue to focus on improving waste management and exploring ways to replace our fleet of vehicles with more environmentally friendly trucks.
Environment
DECLARATION ON CLIMATE ISSUES
The battle against climate change is still ongoing and the world is aware of the negative impact that the use of fossil fuels has on the climate. Global warming, ozone-layer depletion, and acid rain are examples of some the consequences of using fossil fuels.
Iceland bases a large part of its economy on sustainably harvesting natural resources from the sea. Changes attributed to global warming and sea pollution leave the modern economy dangerously exposed, as well as threatening the quality of life for future generations. To support global and local environmental initiatives, Eimskip signed the Reykjavík Declaration on Climate Issues in November 2015. The agreement includes reducing greenhouse gas emissions, reducing waste, monitoring the results of these measures, and regularly reporting this information.
The Company’s environmental management system is a digital data collection and environmental compliance solution, covering the energy and waste management of the vessel fleet, truck fleet, terminal assets, warehouses, and office space for Eimskipafélag Íslands hf., Eimskip Ísland ehf., Faroe Ship and Eimskip’s shipping department in Norway. The software company Klappir Green Solutions works with Eimskip on smart environmental management and certifies our environmental management solutions.
As an environmental service to its customers, Eimskip has developed a carbon calculator for both sea and land transport. The carbon calculator is accessible on the Company’s website.
Eimskip will continue to focus on reduced emissions and improved waste management, and, at the same time, strives to increase the transparency of its ecological footprint throughout the supply chain.
The focus in 2021 will still be on the continued monitoring of emissions and waste from the supply chain. Moreover, Eimskip will continue to collect data from all emitting sources and stream it electronically to a common data warehouse. This digitalization of emission and waste registration data from the supply chain enables continuous monitoring of measures and provides reliable and transparent information on the current status.
CARBON FOOTPRINT
Eimskip defines its ecological footprint as a combination of the calculated carbon footprint and waste management. The operation of vessels is by far the main contributor to the Company’s carbon footprint.
The Company respects the environment and acknowledges the effects that climate change could have on society. The Company is also fully aware of the environmental impact of its business activities and the need for a low-carbon economy. Minimization of the environmental load from operations focuses on achieving full clarity regarding emissions and waste from each emitting source in the supply chain. The use of data and analytics was increased in 2016 and again in 2018, giving Eimskip a better overview of its actual ecological footprint and reduction opportunities. Eimskip started quarterly publication of environmental statements which is a great milestone in managing and monitoring the Company’s CO2 emissions.
The calculation of the Company’s carbon footprint is presented in the graph below. It shows accumulated results of carbon intensity per ton of transported units, compared to the base year 2015.
CARBON INTENSITY PER TON OF TRANSPORTED UNITS
Accumulated results compared to the base year 2015
The accumulated reduction of Eimskip’s carbon footprint in the year 2020 was 13.8%, compared to the base year 2015, calculated per ton of transported units. The Company’s aim is to further reduce its footprint in the coming years, with a goal of 19% accumulated reduction in 2022, 32% in 2027 and 40% in 2030. This goal of total reduction is compatible with Iceland’s decision to join the European Union and Norway in their common goal of a 40% reduction of emissions by 2030.
Environmental Policy and Aims
In 1991, Eimskip became one of the first companies in Iceland to establish an environmental policy. Since then, challenges in this field have developed rapidly and the transportation industry, as well as others, realizes how important environmental issues are for the world today.
Much has been accomplished and Eimskip continues to take further steps to improve its environmental performance and aligning to global initiatives.
EIMSKIP HAS THE FOLLOWING ENVIRONMENTAL AIMS:
- Identify and control potential environmental risks posed by the Company’s operations
- Manage the Company’s operations according to applicable laws, regulations, and international conventions
- Recycle and minimize waste
- Improve the energy efficiency of the Company’s vessels
- Improve the energy efficiency of the Company’s fleet of trucks and other equipment
- Work on reduction and improved efficiency in energy consumption on Company premises
- Set yearly goals on environmental issues and measure
- Provide employees and customers with regular training on environmental issues
IDENTIFY AND CONTROL POTENTIAL ENVIRONMENTAL RISKS POSED BY THE COMPANY’S OPERATIONS
All the Company’s vessels are operated according to a certified Safety Management System complying with the International Safety Management (ISM) code. This includes environmental risk assessments and applicable procedures to control and mitigate environmental risks as carefully as possible. It also includes emergency procedures for each vessel and the offices, to ensure a proper response to incidents that could potentially harm the environment.
Eimskip operates a loss prevention team. One of its tasks is to monitor and identify potential environmental risks anywhere in the Company, and to highlight them to the applicable managers and/or employees.
MANAGE THE COMPANY’S OPERATIONS ACCORDING TO APPLICABLE LAWS, REGULATIONS, AND INTERNATIONAL CONVENTIONS
New regulations came into effect on January 1st 2020, regarding sulphur emissions from vessels in international waters. The rules oblige shipping companies that operate in international waters to use fuel with a sulphur content of no more than 0.5%.
Eimskip’s ambition is to be a leading transportation company in the North Atlantic and a leader in responsibly fulfilling global environmental requirements. The aim of the new regulation is to have a positive effect on the environment. Eimskip will meet those new regulations by installing scrubbers on the new vessels currently under construction in China. A scrubber was installed on “Lagarfoss” in July 2019 and the company will use fuel meeting the sulphur limit on the rest of the fleet.
RECYCLE AND MINIMIZE WASTE
For many years, Eimskip has categorized and recycled the majority of waste produced by its operations. In recent years, the focus has been on recycling as much as possible, and this will be further developed.
According to MARPOL Annex V, all vessels are to have a garbage management plan and a garbage record book. To further improve monitoring, recycling, and reporting, Eimskip digitized the garbage log and started streaming the data to the environmental data warehouse in 2016. The solution was further developed in 2017, with digitalization of MARPOL Annex I and MARPOL Annex VI. Through this, waste has become a part of the supply chain footprint calculation and analytics. This also increases the possibility of further creating value from waste.
IMPROVE THE ENERGY EFFICIENCY OF THE COMPANY’S VESSELS
As a front-runner in the industry, Eimskip started to explore the use of new energy management technologies in 2005 with the intention of increasing the energy efficiency of its fleet. Energy management solutions in shipping were new at the time and the technology was in its infancy. Today, energy efficiency is an integrated part of the operation of the vessel fleet. Based on the positive results, Eimskip will continue to improve energy efficiency and decrease the environmental impact of its vessels.
IMPROVE THE ENERGY EFFICIENCY OF THE COMPANY’S FLEET OF TRUCKS AND OTHER EQUIPMENT
Eimskip operates about 144 trucks in Iceland, which are connected to a monitoring system for improved energy efficiency.
The Company operates mobile harbor cranes connected directly to external electrical power at three of the Company’s terminals in Iceland: Reykjavík, Grundartangi, and Reydarfjördur on the east coast. They were supplied by Konecranes/Gottwald and were originally designed to be able to run either on diesel engines or connected to an external electrical power supply. The cranes use 1.2 MW power at 11 KV, which is similar to the needs of a village of 500 to 700 inhabitants. Their operation is environmentally friendly since they produce no emissions when running on electrical power that comes from Iceland’s fully sustainable electrical power plants. By operating cranes with electricity, Eimskip reduces carbon dioxide (CO2) by 340 metric tons per year. This amounts to what a 17-hectar forest is able to bind on an annual basis. In addition, noise and dust pollution is reduced at the terminals. Five harbor cranes were taken into operation from 2015 to 2017 and three of them are fitted for an external electrical power supply. In 2019, as the terminal moved to a new quay, the rail-mounted STS crane in Reykjavik from 1984 was replaced by another state-of-the-art STS crane running on 11KV external power.
WORK ON REDUCTION AND IMPROVING EFFICIENCY IN ENERGY CONSUMPTION ON THE COMPANY’S PREMISES
Most of the Company’s premises and storage facilities use electricity for lighting and the operation of refrigeration systems and electrical loading stations. Harbor lighting also consumes electricity. The focus of 2016 and 2017 was to obtain full transparency regarding power consumption and its distribution between various consumption units by streaming power data into the environmental database for analytical purposes, the aim being further reduction of energy use.
The new terminal area is equipped with LED lightning, which is far more efficient than conventional lightning systems.
SET YEARLY GOALS ON ENVIRONMENTAL ISSUES
In 2015, Eimskip decided to take a huge step forward in improving its overview of its ecological footprint, by implementing its own digital Environmental Management System. The system uses data analytics and connectivity solutions, and allows the Company to link together various categories of data collected from the entire supply chain. Crews and office personnel are now provided with high-quality information on environmental performance on a user-friendly format.
Eimskip’s Environmental Management Team uses the data collected from the various data sources in the supply chain in various ways. The system employs built-in predictive analytics, data preparation, and user dashboards. This supports monitoring of the footprint throughout the supply chain, including all users, and indicates where improvements are needed. Data from the entire fleet is now streamed into one Company-designed data warehouse. Other emitters, including trucks and electrical power users, were also connected to the data warehouse in 2016.
PROVIDE EMPLOYEES AND CUSTOMERS WITH REGULAR TRAINING ON ENVIRONMENTAL ISSUES
Training crew members has been a crucial part of implementing the energy management solutions on the Company’s vessels and has resulted in strong teamwork with goals for each week of the year. Specific training sessions have been carried out on the vessels using a Ship Energy Efficiency Management Plan (SEEMP). This tool is highly useful for efficiency improvement, in using the onboard energy management system, and in working with fuel changeovers when sailing into ECA zones.
Tax footprint
The economic value generated by Eimskip's operations in the year 2020 amounted to EUR 669,0 million, consisting of revenue, gain on sale of assets and finance income. The economic value has been contributed in many different ways to the societies in which the Company operates, such as through salaries to employees, payroll taxes to authorities, purchase of goods and services from suppliers etc.
TAX FOOTPRINT
EUR million
The total tax footprint of Eimskip amounted to EUR 51.2 million in the year 2020 of which EUR 23.8 million was born by the company and EUR 27.4 million was collected on behalf of local authorities. For comparison, the Company's total tax footprint was EUR 66.7 million in 2019.
The Company's taxes borne include employment taxes in the amount of EUR 14.0 million, corporate income tax of EUR 4.7 million, property taxes of EUR 2.3 million, VAT of EUR 0.9 million and other expenses of EUR 1.9 million. Collected taxes include employment taxes borne by employees amounting to EUR 26.6 million, and other collected expenses of EUR 0.8 million.