Diginex Solutions, a sustainability-focused impact technology company, has partnered with oil tanker giant Hafnia to create a new environmental, social and governance (ESG) reporting tool for the shipping industry.
Using DiginexESG, a digital platform launched earlier this month, the two sides will create an ESG reporting framework tailored to the nuances of the shipping industry, helping organisations benchmark and measure their performance against peers.
“Organisations are under increasing pressure to provide investors with more ESG-related details. For the maritime industry, this process often takes a considerable amount of time, huge consultancy fees, and extensive resources, making ESG documentation incredibly expensive,” says Mark Blick, CEO at Hong Kong-based Diginex Solutions. “Our plans to launch a maritime-focused version of the platform will further remove the burden of manual reporting while providing a cost-effective solution for industry players. It is our mission to improve tracking and reporting of ESG data, making processes six times faster and 90% cheaper than existing tools.”
Released on May 5, the DiginexESG platform aims to lower the barriers to entry to ESG reporting for all organisations, using blockchain to create a permissioned, traceable data repository that enables SMEs and large organisations to show how they are currently performing against internationally recognised frameworks and identify how they can improve positive impact.
“In our experience of working with complex supply chains around the world, the question we often get is how to manage for garbage in, garbage out. If the data is not useful, it is not a useful exercise. What we have learned is the greater accountability you put on the data, the more likely it is that people think more carefully about what they are entering. Every step that is taken on the platform is event logged, so we know who created that information, who entered the data, and there is multiparty verification,” Blick tells GTR. “Companies can create robust data that has a high degree of certainty, then choose who they want to give access to, be that investors, consumers, or regulators, and for how long.”
This comes as ESG reporting has become increasingly important in trade. The emergence of supply chain finance programmes that offer discounted financing rates to firms that can prove their performance against certain metrics, as well as regulatory moves in Singapore and the EU to set out the kinds of industries that banks, insurers and investors should be supporting in order to achieve inclusive economic and social development, means that companies along supply chains are now under increased pressure to understand and communicate their impact on issues such as climate change, human rights, and diversity.
In the Hafnia partnership, Diginex will incorporate relevant frameworks, including the United Nations Sustainable Development Goals (UN SDGs), Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Disclosures (TCFD), as well as bespoke indicators that are specific to maritime trade into its platform.
“As ESG reporting is becoming more common among listed companies, it is also becoming increasingly difficult to stay on top of all the changing regulatory frameworks,” says Shanker Pillai, head of innovation and change at Hafnia. “Moreover, the challenge of collecting and reporting data manually looms large. By partnering with Diginex Solutions it will be easier to track and measure our progress on our sustainability commitments.”
Maritime transport is responsible for approximately 2.5% of global GHG emissions, according to a 2014 report by the International Maritime Organization, a UN agency responsible for regulating shipping. The volume of GHG emissions in shipping could rise significantly if mitigation measures are not put in place, increasing by between 50% and 250% by 2050 in a mid-range scenario depending on future economic growth and energy developments.
To tackle this, the maritime trade sector has increasingly turned to technology-driven processes to ensure compliance with international standards. Last year, Pole Star, a maritime technology company, partnered with carbon accounting solutions provider CarbonChain to integrate its emissions calculation tool for vessels into Pole Star’s PurpleTRAC platform.
Diginex Solutions says its ESG platform has already seen application in 12 different markets including the US, UK, Luxembourg, Hong Kong, Singapore and Chile, and the company now plans to scale up, both via partnerships with large “champions” such as Hafnia that can bring their networks on board, as well as organically. “Our focus is on companies just starting their sustainability journey, who don’t want to pay hundreds of thousands of dollars, and who just want to get started somewhere easily, because that’s the only way we think it can have a meaningful impact,” says Blick.