Gone to Carolina by Way of Alabama-Hydrogen Hubs, ESG, ERPs, and BDRs

Happily, the chilly weather we’ve been having is conducive to researching and gathering information on new wrinkles (to me, anyway) of shipping’s decarbonization journey. In writing a new group of articles that will be appearing in leading maritime magazines, I’ve been chasing down information from some non-traditional sources. In a soon to be published work on “Hydrogen Hubs” (a big deal, maybe- if stars align, as part of the rebuilding, 21st century style, of the U.S. infrastructure), I did come across some articles from a group called the Natural Resources Defense Council (NRDC) – an extraordinarily well-endowed and well-connected group which seeks to influence policymakers on many things environmental. Good for them; they’ve been at it since the early 1970’s- the time of the first Earth Day, and, also, around the time that James Taylor was singing “Gone to Carolina in my mind…”. I mention that not because Duke is playing North Carolina next week (Go Blue Devils!), but rather because James Taylor is an Honorary Board Member of NRDC.

One of the articles that I came across concerned “Greenwashing”; in an exceptionally well-written piece, all about the practice and its ramifications. I had heard the term used- the article delves into things like diesel emissions at car companies (that’s really the closest that the writer gets to transport), descriptions of natural products, and various offenses committed by oil majors (with one of the largest confused via mis-spelling, with a port in Alabama- next time hire a shipping guy to proof-read it, guys). Most of the corporate untruths cited in the article are external, where a company brags to consumers about its supposed green credentials, while in fact not taking steps to decarbonize its processes.

In contrast, I had an experience with one of my operational clients (maritime writing never pays the bills, sadly) that gets at internal greenwashing. It’s complicated, and optimizers who might be reading this, don’t get overexcited and start calling me, because the vessels involved are not subject to CII and all that stuff. The particular charter, with a Fortune 100 entity paying the freight, involved multiple vessels, where one was swapped out for another during its term. The marine department, let’s call them that, at the charterer started asking some peculiar questions about fuel consumption, wanting various comparisons. It’s reasonable enough, so I put together an analysis (analytics pay some bills, but not all of them) suggesting that there was not a whole lot of difference between the vessels’ fuel burns, and, by the way, there were so many exogenous things going on (currents, weather-related conditions including wind patterns, berths occupied, etc.) that it was inappropriate to make “apples to apples” comparisons. That did not satisfy them; they threw some statistics at me from their Enterprise Resource Program (“ERP”, the previous version of today’s “Data Lakes”) regarding fuel purchases. Of course, since I am an old school kind of guy, I had copies of bunker delivery receipts (“BDR”s) and ended up pointing out that info in the ERP did not comport with the realities of how much fuel had been purchased. Having fun yet?

It gets better (or worse, depending…) still. Then, a few weeks later, we received the “Compliance questionnaire” asking all about ESG, mostly E, programs in effect at the shipowner client. My reaction, and that of my colleagues on the vessel side, was somewhere between amusement and fear, skewed heavily towards the latter. We finally filled out the questionnaire, in a complicated online screenshare, with maritime counsel on our Zoom screen (maybe it was MS Teams…I was too scared to remember) reviewing our answers. Throughout this whole exercise, it slowly dawned on me that the maritime and logistics staff at the charterer were completely clueless about this effort emanating from the C-Suite at their corporate headquarters. Various attempts to understand their questioning had been met with non-answers. At first, I thought that they were being cagey and might be wanting to back-trade on something or another in the charter. But, the reality was that the maritime and logistics folks were being green-washed internally; they were far,far, far from being onboard with the broader corporate ESG-speak as the vessels continued to load up. Let this be a cautionary story.