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Maersk Launches Green Finance Framework to Further ESG Commitments

Maersk is making moves.

The shipping giant is taking action to ensure more green operations, while expanding APM’s port operation into Louisiana and growing its e-commerce client base.

Green Finance Framework

Maersk has launched its “Green Finance Framework” designed to allow the company to issue a variety of sustainable financing instruments that could include bonds, loans, project finance and other instruments.

Cicero Green was appointed to review Maersk´s Green Finance Framework and ultimately verify its alignment with the ICMA Green Bond Principles 2021 and the Green Loan Principles 2021. Based on the overall assessment of the eligible green assets under this framework and governance and transparency considerations, Maersk’s Green Finance Framework has received a Cicero Medium Green shading and a governance score of excellent.

Maersk is ensuring more green operations, while expanding APM’s port operation into Louisiana and growing its e-commerce client base.
The 500 million euro green bond comes under Maersk´s Green Finance Framework. Courtesy

“Issuing green financing Instruments is a further step to integrating sustainability into our financing operations as it is an effective tool for channeling investments to projects with positive environmental impact and thereby contributing to the achievement of the UN Sustainable Development Goals and the Paris Agreement,” Patrick Jany, chief financial officer of A.P. Moller-Maersk, said. “With this green bond, we aim at diversifying our investor base by reaching out to new investors and increasing the transparency of our ESG ambitions and performance even further toward our stakeholders.”

By establishing the new Green Finance Framework, Maersk said it intends to align its funding strategy with its goal to become carbon neutral by 2050. To start, the company has placed its inaugural 10-year, 500-million-euro ($562 million) green bond to fund the building of its first feeder vessel and series of eight large ocean-going container vessels that will be capable of operating on carbon neutral methanol by 2023 and 2024, respectively. Maersk said the transaction received a strong reception from investors and was several times oversubscribed, with a final order book of 3.7 billion euros ($4.16 billion).

APM Terminals

Plaquemines Port, Harbor and Terminal District (PPHTD) and APM Terminals announced a Letter of Intent for APM to become the operator of the newly planned container terminal and intermodal rail facility.

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Plaquemines Port and its financial partners will manage the financial activities associated with the infrastructure development, investment and ownership of the port.

The facility is in the early stages of development as a 50-foot deep-water depth, state-of-the-art container terminal in Plaquemines Parish, La. Located on the Mississippi River just 50 nautical miles from the Gulf of Mexico, the gateway port will cater to exporters and importers who could tap into the multimodal routing options of rail, truck, inland marine and air.

The terminal will be environmentally friendly, powered by a combination of natural gas and electricity, encompassing up to 1,000 acres and 8,200 feet of Mississippi River frontage.

“We see tremendous opportunity to write a new supply chain playbook for U.S. exporters and importers with this location,” Wim Lagaay, CEO of APM Terminals North America, said. “Exporters are looking for ways to ship their products overseas with a competitive port and importers are looking for more ways to reach major regional consumer markets in the South and Midwest.”

Sandy Sanders, PPHTD executive director, said the vision is to create a new port with an entirely new supply chain network into the United States.

“We will have multiple routing options to inland markets, which give supply chain planners the resiliency and contingency layers essential to manage future supply chains effectively,” Sanders said.

Special focus will be on utilizing modern infrastructure technology and engineering to withstand storm surges and wind damage in the design of the port. The port and connecting infrastructure will be built 16 feet above sea level. Phase One of construction is expected to last two years and will deliver the capability to handle 22,000-TEU class vessels with the ability to expand capacity as needed.

To reduce the risk of flooding of the terminal site and surrounding area, the U.S. Army Corps of Engineers is building a new federal levee system that will bring the existing flood protection from a four-foot height to 14 feet and will tie back into the Mississippi River levees at a height of 15 feet. Once completed, the system will be able to protect the site from devastating storm surges similar to those of Hurricane Ida. Construction of the flood protection profile is scheduled for completion in the spring of 2023.

Plaquemines Port Harbor & Terminal District is the 13th largest tonnage port in the U.S. and encompasses the first 80 miles of the Mississippi River from the Gulf. APM Terminals operates 75 container terminals worldwide and is the port operator unit of A.P. Moller-Maersk.

Zinus deal

Zinus, a global e-commerce furniture company, signed a memorandum of understanding (MOU) for Maersk to become its preferred global integrator of logistics.

YounJae Lee, the CEO and Founder of Zinus, Ditlev Blicher, Head of Asia Pacific at Maersk, and Adam Farmer, the Representative Director and Head of Sales of North East Asia at Maersk, among others, participated in the signing ceremony.

Under the MOU, the two companies expressed their intent for Maersk to provide a stable supply of shipping containers in 2022, as well as additional logistics services. The firms intend to continually grow and strengthen the strategic partnership globally over at least a 10-year period.

In the short term, the arrangement would allow Zinus to secure a stable supply of shipping containers in 2022 at a fixed rate to meet its shipping needs and stabilize ocean freight expenses in a volatile, uncertain market. In its recent third quarter, Zinus reported year-over-year revenue growth of 16.3 percent despite the limitations of the current global shipping crisis, thanks in part to the continually increasing demand for online purchase of furniture, which has accelerated over the course of the Covid-19 pandemic, the company noted.

“This strategic cooperation will allow us to reduce our logistics risks during a period when the world is suffering from global supply issues due to the shortage of shipping containers and high ocean freight rates,” Seonkyoo Park, senior director of Zinus, said. “We believe this MOU will also serve as a springboard for Zinus to continue to grow our global business even beyond the 16 countries where we currently operate.”

Ditlev Blicher, head of Asia Pacific at Maersk, said Zinus’ growth plans require a state-of-the-art logistics platform for continued expansion. With digitally enabled, seamless, end-to-end solutions based on a network of terminals, vessels and inland facilities, Maersk stands committed to enable the continued growth journey the company, he added.