An important journey that has the commitment and involvement from all levels of the organisation
ESG (Environmental, Social and Governance) outcomes continue to grow in visibility and importance, especially in the context of climate change, anti-corruption, equality, and sustainability. Pressure on companies to play their part is also increasing.
Even as environmental effects of greenhouse gases become more apparent, many people around the world continue to worry about basic needs such as food, shelter and security. Energy is a critical enabler to lift people out of poverty. We must balance the needs of human beings today – affordable shelter, food, heating, mobility – with concerns about our environment tomorrow. We are convinced of the role that LPG can play in the global energy transition towards the use of cleaner burning energy. LPG as a clean, portable and widely available fuel has a vital role to play in this balance between current and future needs.
BW LPG’s formal ESG journey began with aspirations to create a better workplace for employees on shore and sea, for more robust reporting to ensure compliance. Support for community projects were also ad hoc and opportunistic. Our inaugural Annual Report in 2014 included references to our ESG initiatives. In 2017, we launched a Wellness Program for seafarers to emphasise the importance of both physical and mental health for colleagues at sea. In 2018, we announced our R&D project into pioneering LPG propulsion for large LPG carriers and SMARTShips initiative, committing expertise, time, funds and four vessels to the project. As the project progressed, in 2019 we transitioned all vessels to low-sulphur fuel options to comply with IMO 2020’s requirement for fuel oil used onboard ships operating outside designated emission control areas to have less than 0.50% m/m of sulphur.
As we turned into a new decade, in 2020 we made significant and exciting progress in our ESG journey. On the back of better-than-expected test results, we committed a further 11 vessels for retrofitting with LPG dual-fuel propulsion technology amounting to an investment of USD 130 million, we published our inaugural standalone Sustainability Report, and the world’s first LPG-powered Very Large Gas Carrier, BW Gemini, was redelivered. Covid-19 became a pandemic, and we explored how we could support the community in a meaningful way. We partnered with local grassroots networks in Singapore to sponsor the energy needs of low-income households and supported Protovillage, a grounds-up rural initiative in India looking at ways to scale up sustainable rural living practices.
In 2021, we secured our first Transition Loan and Sustainability Linked Loan (SLL) – a nod of support from our financial stakeholders on our efforts at reducing climate impact from operations. The SLL was a US$40 million upsize to an exisiting US$221 million loan facility, to finance the retrofitting of four VLGCs with LPG dual-fuel propulsion technology. It has a sustainability margin adjustment mechanism that is dependent on our continunous improvement in emissions related key performance indicators across our fleet. This SLL subsequently won the “Transport Deal of the Year 2022” for ASEAN in The Asset Sustainable Infrastructure Awards.
In 2022, we completed our ambitious LPG retrofitting project, and now serve customers with the largest fleet of LPG-powered VLGCs, with the lowest emissions profile for long-haul voyages. We are honoured to be selected to form part of the OBX ESG index that recognises 40 blue-chip companies listed in Norway that demonstrate best ESG practices.
LPG is a sustainable transition fuel and can power a cleaner energy future. The urgency to create a better world must be matched with pragmatism; balancing a tension between the need for progress and the need to provide for the least able; and spreading the burden of additional costs over time to achieve our shared goal of a Better World where current and future needs are met. Our seafarers and shore staff around the world enables BW LPG to play its part in this. For their efforts and commitment, we give our thanks.
- Read about our Sustainability Approach here.
- Read about LPG dul-fuel propulsion technology here.
- Read our Annual Report 2021.
Keywords: sustainability, ESG, climate, climate impact, climate change, innovation, research and development, LPG, LPG shipping, shipping, maritime, energy, decarbonisation, CSR, corporate social responsibility, environment