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 for its employees, society, and the environment. As a company, Eimskip aims to contribute to a better and safer society wherever it operates, and responsibility towards the community is an integral part of the Company’s sustainability policy. The sustainability policy is reflected in Eimskip’s global policies that apply to the Eimskip Group.
Eimskip is a registered participant of the UN Global Compact, the United Nations’ initiative for social responsibility for human rights, labor, environment, and anti-corruption. With its participation, the Company has committed to managing its business operations so that the UN Global Compact and its Ten Principles are a part of the Company’s strategy, culture, and day-to-day operations.
Eimskip’s Sustainability Policy is based on the Nasdaq ESG Reporting Guide.
SUSTAINABILITY STRUCTURE
The Company has a governance structure for sustainability-related matters where the CEO is responsible for a strategic sustainability framework. Executive Vice Presidents are responsible for specific categories within the sustainability framework – environment (E), social (S), and governance (G), and the Sustainability Manager holds the day-to-day responsibility.
SUSTAINABILITY GOVERNANCE
In 2020, Eimskip collaborated with the consulting company Circular Solutions (now a part of KPMG) on a risk assessment of the Company’s ESG and established a three-year action plan. Several of the risks that were identified were addressed in 2020, information flow was increased, and effort put to implement new polices and review older. Some of the risks are under continues improvement. Environmental issues have and will be focus in upcoming years, social risk like diversion and inclusion and governance risk.
Parallel to the work on the main ESG risk Eimskip linked projects to UN Sustainability Development Goals: Climate Action (goal 13); Good health and Well-Being (goal 3); Responsible Consumption and Production (goal 12); and Peace, Justice and Strong Institution (goal 16).
SUSTAINABILITY STATEMENT
The Eimskip ESG Sustainability statement 2021 is available here. Eimskip basis the sustainability reporting on Nasdaq ESG reporting guidelines.
Several projects were conducted over the year 2021. They were of great diverse, and many employees were involved. Among highlights are projects that touches wellbeing, environment, green investment, extension of ESG scope and Eimskip policies. Further description of the highlight can be seen below.
FUTURE FOCUS
In 2022, Eimskip will continue to focus on climate change projects. The Company will continue to gather information and knowledge regarding the transition of energy but energy exchange is a vital part in reaching the Company’s reduction goals. The Company will continue to improve ESG reporting and work with global offices to fully map scope 1 and scope 2 emission in operation and improve mapping in scope 3. Further goals will be set for different kinds of segments in the Company to encourage better success In 2022, the Company will take steps to implement TCFD reporting (Task Force on Climate related Financial Disclosures) as a part of the risk management. The Company offers carbon calculator for customers to enable them to see their carbon footprint in transporting with Eimskip. The Company will continue to develop the calculator to give even more information e.g. to Trans-Atlantic customers and TVG-Zimsen.
The Company will continue to implement the Procurement Policy and Supplier Code of Conduct and follow up on other policies within the Company. Special attention will be on diversity and inclusion projects in the employee group and actions positively affecting employee turnover.
Environment
The changes associated with global warming and pollution of the ocean leave all the critical components of its modern economy utterly exposed, in addition to threatening the quality of life for future generations.
The Company respects the environment and recognizes the effects of climate change on society, its business activities, and the need for a low-carbon economy. Minimizing the environmental load from the Company’s operations is crucial. The Company considers climate change one of the main ESG risks in the operation.
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 measured results, and regularly publicizing the information. The Company has been involved in the Green initiative in the Faroe Islands, a project in cooperation with local companies and institutions within the Faroe Islands aiming to advance sustainable business.
The focus is on achieving complete clarity regarding emissions and waste from each of the emitting sources in the supply chain. Development in data and analytics gives Eimskip a better overview of its ecological footprint and reduction opportunities. The Company uses an electronic Environmental Management System linked to all significant assets in the supply chain, streaming reliable and transparent information on its environmental matters. Digitization of emission and waste-registration data from the supply chain enables continuous measurements and provides transparent and dependable communication.
Eimskip defines its ecological footprint as a calculated carbon footprint and waste management combination. The operation of vessels is the main contributor to the Company’s carbon footprint.
CARBON FOOTPRINT
The Company is fully aware of the environmental impact of its business activities and the need for a low-carbon economy. Minimizing the ecological load from operations by focusing on achieving complete clarity regarding emissions and waste from each emitting source in the supply chain.
The calculation of the Company’s carbon footprint is presented as carbon intensity in scope 1 per transported unit in kgCO2 equivalent (e). Eimskip aims to reduce its footprint by 40% from 2015 to 2030.
The calculation of the Company’s carbon footprint is presented in the graph below. It shows accumulated results of carbon intensity per tonne of transported units, compared to the base year 2015 and the path that is needed to reach the goal before 2030.
CARBON INTENSITY PER TON OF TRANSPORTED UNITS
Accumulated results compared to the base year 2015
It is good to see Eimskip’s new vessels, Brúarfoss and Dettifoss, contribute to reduced emission per transported unit. The accumulated reduction of Eimskip’s carbon footprint in the year 2021 was 18%, compared to the base year 2015. The Company works hard on achieving the ambitious goal set in 2015: to reduce its carbon footprint by 40% before 2030. The vessels account for 96% of the Company’s CO2 emissions and energy exchange is needed to reach that goal. Eimskip has a group of employees from various positions within the Company working together towards that goal.
Eimskip’s official KPI was set in 2015. It is used to measure the development of reducing GHG emissions by 40% before 2030. It represents all scope 1 emissions of all vessels in Iceland, Norway, the Faroe Islands, and trucks/equipment in Iceland per tonne of the transported unit. The KPI is adjusted to the vessel sharing agreement with Royal Arctic Line (RAL) due to rules regarding transportation to and from Greenland.
Eimskip reach a great milestone when the Company started to publish quarterly environmental statements. The statement is introduced and discussed with the executive team each quarter, and possible risk factors are discussed. This reporting is essential in managing and monitoring the Company’s CO2 emissions.
New service was developed regarding transport of fresh fish by sea, but the Company offers a robust and reliable solution in transporting fresh products with lower emissions than cargo with airfreight. Eimskip has also continued to develop a carbon calculator for larger customers as an addition to the carbon calculator on www.eimskip.com.
GREENHOUSE GAS EMISSIONS
Eimskip has a good overview of the GHG emissions of the operation. The Company has an environmental management system and gathers its data digitally. The data covers the vessel fleet’s energy and waste management, trucking fleet, terminal assets, warehouses, and office space.
In scopes 1 and 2, the Company has a good overview of data from Eimskipafélag Íslands hf., Eimskip Ísland ehf., Faroe Ship and Eimskip’s shipping department in Norway; furthermore, Eimskip’s offices in the Faroe Islands, Germany, Poland, Spain, and the UK are now part of the environmental statement for the first time. Eimskip is pleased to see more of the Company´s global offices in the environmental statement. The goal in 2022 is to finish all scope 1 and 2 registration for main offices globally.
The Company´s energy mix is 97% fossil fuel, with most emissions coming from the vessels.
The work in scope 3 is constantly evolving. The focus has been on registering scope 1 and scope 2 emissions and finalizing Eimskip’s operation. However, the Company will take more steps in gathering more data into scope 3. Today, Eimskip has gathered information about waste in Iceland and business flights.
Eimskip’s total emissions were 297,988 tCO2e in 2021. Scope 1 is 296,684 tCO2, where the vessel fleet is responsible for most of the emissions. The effect of including global offices into scope 1 is not significant. Including the global offices is more visible in scope 2, where the emission is 1,102 tCO2. The main reason is that energy production in Iceland is greener than in other countries.
NEW FUEL SOURCE, INFRASTRUCTURE, AND SUPPLY
To meet Eimskip´s CO2 reduction goal, energy transition is necessary. The future will lead to green fuel, but there are several options. Green methanol, green ammonia, and green hydrogen are future energy sources of ocean and land transport. But before giant steps are taken, the supply of the energy and the infrastructure must be in place. It is also of importance that the pricing of the new energy is transparent so that it will be possible to calculate all green investment based on operational requirements.
CARBON OFFSET
Several carbon offset projects were conducted in 2021 e.g. all vessel transport of personal effects, all business flights and the printing of Eimskip’s calendar.
RECYCLE AND MINIMIZE WASTE
For many years, Eimskip has sorted and recycled most of the waste produced by its operations. In recent years, the focus has been on recycling as much as possible, and this will be further developed in coming years e.g. with a new sorting station in Sundahöfn.
On board vessels Eimskip works on waste management according to MARPOL. All vessels have a garbage management plan and a garbage record book. To further improve monitoring, recycling, and reporting, Eimskip has digitized the garbage log and started streaming the data to the environmental data warehouse in 2016. Through this, waste has become a part of the supply chain footprint calculation and analytics.
Waste management at land operation is continuously improving, and in 2021, particular focus was on reducing unsorted waste in harbor and warehouse areas. All plastic in Iceland is recycled in cooperation with entrepreneurial company Pure North, developing new solutions for recycling plastic.
One important step in waste management is to reuse material and prevent waste. In the Eimskip operation, emphasis is on reusing material as much as possible. An example of a project that focuses on reuse is the utilization of dunnage bags. Dunnage bags are used to stabilize cargo and are reused again and again. Another example is the handling of old pallets in the system. When they cannot be used anymore for transport, the wood has been given a new life as a spare part for other pallets.
The rate of recycled waste has gone from 23% in 2020 to 30% in 2021. The percentage of the sorted waste was 75% in 2021 compared to 73% in 2020.
From the office, the most waste is due to use of paper. All around the world, employees in Eimskip offices have worked on projects to support “Eimskip Paperless Journey”. Several projects were conducted with a digital solution, and in other cases, employees changed their way of working to reduce printing. For example, printed paper in Iceland has gone from 2 million pages in 2019 to 1 million pages in 2021. Eimskip UK took a huge step in 2019 and prints 24.000 pages less per month than previously.
IMPROVED ENERGY EFFICIENCY
Eimskip is continuously working on improving the energy efficiency in the overall system. Energy efficiency is an integrated part of operating the vessel fleet, and the Company constantly seeks opportunities to find a solution to increase the efficiency in energy consumption. In 2022, Eimskip has been working on the land connection at Sundahöfn for the newest vessels, Bruarfoss and Dettifoss. This year was also the first full year in operation for Eimskip new vessels that are the most environmentally friendly vessels pr TEU of the whole fleet. The effect of the new vessels clearly shows in Eimskip reduction KPI (carbon intensity per tonne of transported units).
The Company operates mobile harbor cranes connected directly to electrical power at three of the Company’s terminals in Iceland: Reykjavík, Grundartangi, and Reydarfjördur on the east coast. Some of the cranes were initially designed to run on diesel but have been retrofitted. Eimskip reduces carbon dioxide (CO2) by 340 metric tons per year by operating cranes with electricity. This amounts to what a 17-hectare forest can bind on an annual basis. In addition, noise and dust pollution is reduced at the terminals.
Eimskip operates about 157 trucks in Iceland and Europe. Most of them are connected to a monitoring system for improved energy efficiency.
Most of the Company’s premises and storage facilities use electricity for lighting and the operation of refrigeration systems in warehouses and electrical loading stations. Harbor lighting also consumes electricity. The new terminal in Sundahöfn is equipped with LED lighting, far more efficient than conventional lighting systems.
MANAGING COMPANY´S OPERATION ACCORDING TO APPLICABLE LAWS, REGULATIONS, AND INTERNATIONAL CONVENTIONS.
New regulations came into effect on January 1, 2020 regarding sulfur emissions from vessels in international waters. The rules oblige shipping companies that operate in international waters to use fuel with a sulfur content of no more than 0.5%. Eimskip’s ambition is to be a leading transportation company in the North Atlantic and responsibly fulfilling global environmental requirements. The aim of the new regulation is to have a positive effect on the environment. Eimskip has met those new regulations by installing scrubbers on Bruarfoss, Dettifos and Lagarfoss; the Company will use fuel meeting the sulfur limit on the rest of the fleet.
Social
Eimskip recognizes its responsibility to work in partnership with the communities it operates in. This partnership is connected to all stakeholders from employees, customers, and society, with the Company’s values of achievement, cooperation,and trust always in mind. Eimskip has a clear human rights policy declaring that everyone shall enjoy equal rights in all respects. The policy is accessible on the Company’s website.
EMPLOYEES
Eimskip has a diverse team of engaged employees whose knowledge and skills are the Company’s most important resources. The Company employs over 1600 people across four continents and 20 countries.
Each member brings a unique set of talents and experiences to the team, which makes up a diverse and dynamic work environment characterized by collaboration, ambition, and innovation.
Eimskip actively seeks to ensure that women have a voice at all levels in the Company to ensure dynamic conversations and ensure broad perspectives. A powerful tool in driving diversity and gender equality in Eimskip’s Executive Management team is its Succession Planning process.
Women are 30% of all employees in general and 29% of management. Since 2020, the number of women on the Executive Board has advanced from 14% to 22%. The diversity of job type within the Company is good e.g., 41% of employees work in the office, 16% in warehouses, 10% in the harbor area and around 8% on the vessels. The Company is extremely proud of having employees of 41 different nationalities. Therefore, high importance is on inclusivity among the employees. The Company will continue to emphasize diversity and inclusion in the year 2022.
Employee turnover was 20% in 2021 but was 21.4% in 2020.
EMPLOYEES BY GENDER
MANAGEMENT BY GENDER
HUMAN RIGHTS
Eimskip respects human rights and operates according to its employee rights and welfare policies. Eimskip’s human rights policy is part of the Human Resource Policy and topics like wage, freedom of association, safety, child labor, and harassment are in focus. Human rights are also part of the Company Code of Conduct. With Eimskip Whistleblower program in place, employees and other stakeholders can report grievances, e.g. due to Human Rights.
WELLBEING OF EMPLOYEES
One of the main challenges in 2021 was the COVID-19 pandemic. The priority continued to be securing the health and safety of employees by implementing multiple safety precautions. The Company launched several initiatives supporting employee well-being. For instance, Focus Friday’s were introduced with the aim to reduce meetings on Friday afternoons and equip employees with uninterrupted time to complete deep work before the weekend. October was a special wellness month were the Company put special focus on well-being and offered various training and events related to wellness, health, and safety to employees.
Regular employee engagement surveys are conducted within the Company to monitor and improve employee satisfaction and engagement, which is one of the Company’s KPIs. The survey’s purpose is to give employees a chance to voice their opinions and empower leaders to understand their team members better. In April and October, two surveys were conducted in 2021, measuring the various drivers of engagement, such as freedom of opinion, growth, management support, meaningful work, equality, peer relationships, and workload. In April, overall engagement and satisfaction were 8.0 (out of 10). In November, the overall engagement score was 7.8, and satisfaction was measured at 8.0. Both engagement and satisfaction have remained steady for the past years.
SAFETY
A safe and healthy work environment is one of Eimskip’s top priorities. Eimskip has a zero-accident policy in regards to injury to people in connection with the company´s activities or caused by it. The objective is that everyone can work safely at Eimskip. To achieve this objective, the Company emphasizes on proactive approach in preventing accidents and providing employees with the necessary training. Employees undergo routine safety training and continuous advancements to create a safe work environment. An excellent example of such progress in 2021 was investing in specialized firefighting equipment for container fires onboard vessels. That action is part of Eimskip’s emphasis on increasing onboard safety. A new line of communication is in plan to be set up to focus on safety and prevention, where employees are encouraged to speak up and let the safety board know for example about hazardous situations or improvements concerning safety. The annual safety week was held in September, where Eimskip had several exercises and drills both on land and onboard.
Eimskip has a First Response Team, whose duty is to respond to various incidents on sea and land. The team’s purpose is to ensure and assist on proper first response and limit accidents to people and damages to properties, cargo, and the environment. Also, it is the team’s responsibility to respond to cyber incidents.
The Company’s Loss Prevention Team meets regularly to investigate losses, damages, and accidents and follows up on necessary changes, training, and improvements.
CUSTOMER
Eimskip is renowned for its excellent service. The Company has a broad customer base and provides a wide range of solutions to meet diverse requirements. A global team with local expertise provides customers with holistic services designed specifically for their needs.
In 2021, the Company continued to implement the Global Service Policy. The goal of the Global Service Policy is to align the service approach, goal setting, and measurements between different units within Eimskip to ensure that the Company is offering excellent customer service. The Global Service Policy contains three pillars: Global Team, Proactive, and Simplify.
To measure and monitor customer satisfaction for customers globally, Eimskip sends out a Net Promoter Score (NPS) customer survey each year. The NPS score continues to be strong. In Gallup’s research among companies in Iceland, the positivity towards Eimskip is high, and there is increased positivity towards the Company. Also, historically in Iceland, the Eimskip brand is very well known, with 100% brand awareness.
The digitalization and automation of processes are critical elements in developing Eimskip’s services. The Company is determined to adapt to customers’ needs in a fast-changing technical environment where self-service aspects are increasingly important. A strong focus on information technology and potential synergies between systems and teams are vital in Eimskip’s proactive commitment to service excellence.
PROJECTS FOR THE SOCIETY
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 the sustainability policy. The Company supports various projects, charities, sports activities, culture, innovation, and finally, projects centered on preventive measures for children and young adults. The Company is incredibly proud of the bicycle helmet project, which began in 2004 in cooperation with Kiwanis in Iceland (a global community of clubs, members, and partners dedicated to improving the lives of children one community at a time). Eimskip [ERBE1] has given all six-year-old children in Iceland bicycle helmets and safety reflectors to contribute to youth safety, a total of about 74,100 children. Another great example is that Eimskip supports young people in Arhus that have had tough times in their lives.
Governance
Eimskip strives to ensure an open and transparent relationship between the Company´s management, its Board of Directors, its shareholders, and other stakeholders.
DIVERSITY IN BOARD OF DIRECTORS
The number of women in Eimskip’s Board of Directors at year-end 2021 was at 60%, compared to 40% at the same time in 2019. For the first time in the Company’s history, women constitute the majority of the Board of Directors. The total number of Board seats of independents is 80%.
ANTI-CORRUPTION AND BRIBERY
Eimskip’s Code of Conduct was reviewed in 2021. It covers a wide area of subjects, e.g.,= competition law, data protection, sustainability, and the environment. High emphasis is on zero tolerance for harassment and discrimination.
The Code of Conduct includes Eimskip’s policy against corruption and bribery. The Company’s management and its employees strive to comply with applicable laws and regulations and with rules and general standards of business ethics and corporate governance to avoid conflict of interests and maintain confidentiality. The Code of Conduct is extended to the Company´s business partners and suppliers in Eimskip Supplier Code of Conduct. The Supplier Code of Conduct was published in 2021 and will be implemented among vendors and suppliers in 2022.
Eimskip has in place a whistleblower procedure for handling reports of alleged misconduct concerning the Company’s operations and the protection of whistleblowers. Eimskip’s Anti-Money Laundering and Sanction Policy prohibits anyone employed by Eimskip from participating in money laundering, terrorist financing, and sanction breaches.
DATA PRIVACY
Eimskip is committed to keeping the personal data of customers, employees, business partners, and other stakeholders secure. Eimskip strives to comply with applicable data protection laws, and all personal data used in our business operation must be handled following global privacy and internal policies.
DISCLOSURE AND EXTERNAL ASSURANCE
Eimskip’s ESG statement is published on www.eimskip.com. It is based on the Nasdaq ESG Reporting Guide, focusing on 30 environmental, social, and governance performance indicators. The statement is confirmed each year by Klappir Green Solution hf.
Tax footprint
The economic value generated by Eimskip's operations in the year 2021 amounted to EUR 883.4 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 60.9 million in the year 2021 of which EUR 30.5 million was born by the company and EUR 30.4 million was collected on behalf of local authorities. For comparison, the Company's total tax footprint was EUR 51.2 million in 2020.
The Company's taxes borne include employment taxes in the amount of EUR 15.0 million, corporate income tax of EUR 8.5 million, property taxes of EUR 2.7 million and other contributing factors amounting EUR 4.3 million. Collected taxes include employment taxes borne by employees amounting to EUR 26.9 million, and other collected expenses of EUR 3.5 million.