ON A SUSTAINABLE COURSE - Hamburg Sud
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Contents Foreword 07 Introduction 10 Compliance 22 Energy and emissions 28 Environment 42 Employees 48 Quality 60 Supply chain 66 GRI Content Index 74 Sustainable Development Goals 83 Glossary 84 Imprint 85 Contents Sustainability Report 2016/2017 05
Foreword Dear Business Partners, the floors of our dry container newbuilds, and 102-10 Colleagues, and Readers, have not recorded any oil spills throughout 102-14 the entire reporting period. You can find out Today, you are holding in your hands Hamburg more about these successes in the chapters Süd’s second Sustainability Report prepared in “Energy and emissions” and “Environment.” accordance with the Global Reporting Initia- tive (GRI) guidelines. One month before the Sustainability is an indispensable part of our end of the reporting period, on December 1, corporate philosophy and for us means rec- 2017, Hamburg Süd became part of the market onciling economic efficiency, environmental leader Maersk Line through an acquisition deal. protection, and social responsibility based on Although Hamburg Süd will continue to operate stable economic development. We will continue in the markets as a commercially independent to leverage our scope for action in pursuit of brand, belonging to a new corporate family will these aims as we move forward. For example, inevitably entail significant changes. The most we will organize the pre- and on-carriage of important of these in the context of this report containers to and from the ports in the most is that in the future Hamburg Süd ships will be environmentally friendly way possible in those operated by Maersk Line – with development cases where our customers entrust us with this. and management of the fleet being controlled Hamburg Süd will still organize these intermodal from Copenhagen already since April 2018. transports independently as part of the new Accordingly, the definition of efficiency and parent company. Independent assessments of environmental targets for ships and con- our sustainability performance show us that tainers will in the future also lie with Maersk we are on the right track. Most recently, the Line. This report therefore does not contain Carbon Disclosure Project, to which we have any broader objectives; instead it focuses on reported voluntarily for several years, gave us what has been achieved to date, which with an above-average rating. EcoVadis awarded regard to our central sustainability objectives us the highest possible “Gold” rating for the is consistently positive. We have been able to second time. Dialog and critical discussion with further reduce the CO2e emissions of our fleet our stakeholders also help us to continuously in terms of transportation work, are now using develop our commitment to greater sustainabil- almost exclusively fast-growing bamboo for ity. As with the first report, they have once again Foreword Sustainability Report 2016/2017 07
102-10 played a major role in helping us to identify the 2017, we grew faster than the market did, and 102-14 key issues and sharpen the content of the re- the bottom line for our container activities was port. We would like to thank them for their input. a profit in the double-digit million range. This is a step in the right direction, though the prof- it was less than satisfactory given the capital We want to continue to invested. As part of A.P. Moller-Maersk, the provide our customers with world’s largest container shipping company, we are excellently positioned to exploit future the excellent service they opportunities, while at the same time Hamburg know and expect from us. Süd will remain commercially independent. In doing so, we will continue to advocate sustainable solutions A central task not only for us but for all contain- as we go forward. er shipping lines is to anticipate future regu- lations and legal requirements and, wherever possible, to participate in the development of Although global overcapacities in container global solutions. For example, we contribute shipping continued to put pressure on freight to the process initiated by the International rates in the period under review, we are look- Maritime Organization (IMO) to define uniform ing ahead with confidence. In the financial year emission standards. We accept that the ship- 08 Sustainability Report 2016/2017 Foreword
Dr. Arnt Vespermann, Frank Smet, Jakob Wegge-Larsen, Chief Executive Officer (CEO) Chief Commercial Officer (CCO) Chief Financial Officer (CFO) Hamburg Süd Hamburg Süd Hamburg Süd ping industry also has a responsibility to make tical logistics. As a leading provider of refriger- 102-14 its fair contribution to reducing global emissions ated container transports, we have upgraded of greenhouse gases and air pollutants – espe- our equipment to meet the strict guidelines cially as in our case higher efficiency and lower of Good Distribution Practice (GDP) for the consumption pay off both ecologically and eco- transportation of pharmaceutical products. Our nomically. Combating climate change is one of customers can now also rely on our expertise the most urgent ecological tasks of our time. In in this area. See page 64 for more information. addition, the globally binding, lower sulfur limits Together with our customer Electrolux, we had for marine fuels used at sea will have a positive also launched a project to reduce sulfur dioxide effect on air quality from 2020. It will be import- emissions while a ship is in port. Read on page ant to ensure global compliance with the stricter 40 how we carried out a fuel switch about a limits through controls and other measures. year ago in Iquique, Chile. We are also proud Discussions at the national level concerning that the Marine Training Center we co-founded bans on diesel vehicles in major German cities in Tarawa, Kiribati, has been training seafarers show that the issue of emissions is high on the for half a century now. To date some 5,000 political agenda and in the public awareness. people have learned their trade here, many of whom we have recruited as qualified crew Apart from numerous challenges, the last two members. This unique project, from which years have seen just as many successes. For both sides benefit, is presented on page 58. example, we were able to confirm our very good punctuality record and continued to be among In the current year, we hope to sustain our the best liner shipping companies worldwide positive economic development and once in terms of schedule reliability. This is what again provide our customers with the excellent customers expect from a quality carrier. At the service they know and expect from us. In doing same time, we further expanded our range of so, we will continue to advocate sustainable services and successfully positioned ourselves solutions as we go forward – in this respect, in the important growth market of pharmaceu- too, Hamburg Süd will remain Hamburg Süd. Yours, Dr. Arnt Vespermann Frank Smet Jakob Wegge-Larsen (CEO) (CCO) (CFO) Foreword Sustainability Report 2016/2017 09
INTRODUCTION Sustainability management at Hamburg Süd Page 12 Engagement with stakeholders Page 12 Materiality analysis Page 15 Company profile Page 15 10 Sustainability Report 2016/2017 Introduction
Introduction Sustainability Report 2016/2017 11
Introduction – utilizing potentials and ensuring sustainability 102-11 Sustainability management Sustainable management is an integral part 102-12 at Hamburg Süd of Hamburg Süd’s corporate identity. This 102-16 is reflected in our commitment to partners 102-43 Successful and sustainable corporate man- and employees and in our long-term, sound 102-50 agement go hand in hand at Hamburg Süd. business policy, which is geared toward long- 102-54 Our aim is to continuously improve our sus- term sustained growth. At the same time, we tainability performance and further develop our are innovative and leverage forward-looking 103-2 sustainability management. As early as 2014, a technologies also in the interests of sustain- overall separate staff unit was set up for this purpose, ability. Our economic principles are closely which reports directly to the Executive Board linked to our ethical guidelines. The latter and implements and promotes the associated are laid down in our Principles of Social and processes. One example is the comprehensive Ecological Responsibility, our code of conduct environmental controlling framework introduced and our environmental, safety, and quality in 2011, which systematically collects and ana- policy. Together with our management sys- lyzes all consumption and emission data, thus tems, they form the general framework for our revealing potential for improvement. Cooper- operational activities and strategic decisions. ation with the various specialist departments and the regions is of central importance here. Open and transparent communication on our The Sustainability Staff Unit is also an important performance and the associated challenges and link to the outside world: through cooperation progress are also part of our comprehensive sus- in initiatives and contact with our stakeholders, tainability management. This report for 2016 and it brings important topics into the company 2017 therefore documents Hamburg Süd’s sus- and promotes exchange and cooperation. tainability performance for the second time. This report has been prepared in accordance with the We introduced an integrated management GRI Standards: Core option. We also look at the system as a central instrument for ensuring United Nations’ Sustainable Development Goals the quality and environmental compatibility of (SDGs), to which we refer for the first time in this our performance back in the 1990s. Quality report. The 17 objectives are each defined more management to DIN EN ISO 9001 and envi- precisely through several action-oriented sub- ronmental management to DIN EN ISO 14001 goals. Although primarily aimed at government are supplemented by the International Safety organizations, companies can also contribute Management Code (ISM Code). The regulations to one or several of these objectives, depending adopted by the International Maritime Orga- on their field of activity. In a first step, we iden- nization (IMO) stipulate binding measures for tified which SDGs this applies to for Hamburg the organization of safe ship operation and aim Süd and assigned them to the topics we have not only to protect people on board but also reported on (see table on page 83). For better to protect the marine environment. By apply- orientation, we have also integrated the SDG ing the precautionary principle, the systems symbols into the report at the appropriate points. serve to anticipate risks and to prevent detri- ments to human health and the environment. Engagement with stakeholders We foster continuous engagement with our stakeholders as a matter of course. The feed- back and suggestions we receive from regular personal dialogs as well as in the context of our association work and our commitment to various initiatives deliver valuable input. This may take the form of working group meetings 12 Sustainability Report 2016/2017 Introduction
Introduction Sustainability Report 2016/2017 13
102-40 for example in the Association of German that have touchpoints with Hamburg Süd to 102-42 Shipowners (Verband Deutscher Reeder – participate. A total of 104 persons respond- 102-43 VDR) and the World Shipping Council (WSC), ed to this request, who can be assigned to 102-46 or lectures at universities and conferences. nine stakeholder groups: employees, owners, In addition, we are in close contact with our customers, suppliers, business & cooperation customers at all times – at the meetings and partners, politicians & administrative repre- in the working groups of the Clean Cargo sentatives, representatives from education & Working Group (CCWG), for example, we research, associations & initiatives, and NGOs. regularly work together on devising methods In addition to 36 representatives from external and solutions to further improve environ- target groups, 68 employees from all regions mental protection in container shipping. and all hierarchy levels took part – including crew members of three ships, who tend to In preparation for this report, in addition to the focus on different aspects than their shore- regular dialog, we again conducted a target- based colleagues, as experience has shown. ed online survey to identify the topics that our All participants were asked to evaluate the stakeholders consider to be material in the importance of previously identified sustainabil- sustainability context. In order to obtain as ity topics first individually and then to priori- broad and diverse an opinion as possible, we tize them against each other. The topics were asked representatives from all major groups selected by an internal project group headed 30.5 % 19.5 % Customers Suppliers 11 % Business/cooperation partners 5.5 % 8.3 % Politicians, authorities, Other administrative representatives 8.3 % 2.8 % Owners Education, science and research 5.6 % 8.3 % NGOs Associations/initiatives 36 external stakeholders took part in our survey (difference to 100 % due to rounding). 14.7 % 16.2 % Shore – Global heads/ Sea – Ratings regional managers 10.3 % Sea – Operational level 11.7 % 25 % Sea – Ship board Shore – Senior managers management 8.8 % 13.2 % Shore – Specialists Shore – Managers In addition, 68 employees from all regions responded to our questions (difference to 100 % due to rounding). 14 Sustainability Report 2016/2017 Introduction
Identified Material Aspects Material internally Material externally 102-47 Anti-corruption • • Anti-competitive Behavior • • Energy • • Biodiversity • Emissions • • Effluents and Waste • Employment • Occupational Health and Safety • Training and Education • Diversity and Equal Opportunity • Nondiscrimination • Supplier Social Assessment • Customer Privacy • • Socio-economic Compliance • • by the Corporate Communications depart- of particular importance to our employees, 102-2 ment, taking internal and external evaluations or they are directly related to pressing global 102-7 of sector- and company-specific aspects into tasks such as combating climate change. 102-46 account as well as overarching global chal- lenges and trends. In addition, respondents There were no significant changes in the were asked to state other topics they consider scope and within the limits of the topics shown relevant and to formulate their expectations compared with the previous reporting period. regarding what the Sustainability Report should deliver. The responses of all participants were weighted equally in the evaluation. The results of Company profile the survey decisively influenced the topics dealt with in this report. However, compared to the Hamburg Süd is one of the world’s leading last survey conducted in 2014, there has been providers of liner shipping services and is only a very slight shift in the priority ranking. represented by its own offices and agencies in more than 100 countries. It has a global pres- ence of some 6,500* employees at sea and Materiality analysis ashore who ensure that our customers benefit from tailor-made logistics solutions. Founded The results of the stakeholder survey were in Hamburg in 1871, we are today an interna- transferred to the materiality matrix. In a next tionally active logistics service provider that step, the relevance of the individual topics for offers services which extend far beyond pure Hamburg Süd as a company was compared; and simple transportation by sea: our portfolio finally, the Executive Board also validated the also includes pre- and on-carriage transports list of identified topics. Some aspects were by rail, truck, or inland waterway as well as given a greater weighting, providing they met comprehensive services from official clear- the following conditions: they are essential ance to customs formalities. In 2017, Hamburg for Hamburg Süd’s competitiveness and thus Süd transported 4.69 million TEUs (2016: its long-term success, they represent a chal- 4.39 million) with 116 container ships (2016: lenge for the entire shipping industry, they are 121) and through its services generated sales *Includes employees on parental leave, as of Dec. 31, 2017. Introduction Sustainability Report 2016/2017 15
102-2 revenue of 5.42 billion US dollars. In the 2017 into Hamburg Süd at the beginning of 2018. In 102-6 reporting period, the company has for the first addition to classic dry cargo, we mainly trans- 102-7 time prepared its annual financial statements port cooled goods as one of the world’s leading in accordance with IFRSs; the revenue figures providers of refrigerated container shipments. also relate exclusively to container activities. However, Hamburg Süd also ships large-scale In container liner shipping, Hamburg Süd break-bulk and project cargo as well as haz- also operates under its Brazilian subsidiary ardous goods. The core trades include traffic Aliança in addition to its own-name brand. to and from South America; Aliança is also the In the reporting period, the Chilean compa- leader in Mercosur traffic between the South ny CCNI also belonged to the brand family; American states and cabotage traffic along however, this company was incorporated fully the Brazilian coast. Hamburg Süd’s network 102-44 Material Aspects Very important Economic Environmental Social Material externally Sustainable materials Resource consumption ashore Noise emissions from ships Important Empty container transports Important Material 16 Sustainability Report 2016/2017 Introduction
of over 90 liner services connects all conti- ment of all our own ships and also looked after 102-2 nents and the world‘s most important ports. all our newbuilds and conversions. From 2018, 102-6 these tasks will be taken over by our new owner 102-10 Another business segment is tramp shipping, in Maersk Line or its subsidiaries. The Hamburg which we transport dry and liquid bulk goods Süd family also includes Hamburg Süd Trav- under the three brand names Rudolf A. Oetker el Agency, which specializes in planning and (RAO), Aliança Bulk, and Furness Withy with handling business travel but also offers its bulk carriers and product tankers. During the expertise for private travelers. However, be- period under review, Columbus Shipmanage- cause this field of activity and the sales revenue ment GmbH was responsible for the crewing, generated is not part of the core business of technical management, and materials manage- Hamburg Süd, it is not included in this report. These topics are of equal importance to internal and external stakeholders. Oil spillages Ship efficiency Occupational health and safety Data privacy Ship recycling Air emissions Anti-corruption Fair competition Occupational health and safety (supply chain) Intact cargo Sound business policy Equal opportunity/ nondiscrimination Compliance Innovative Reefer containers technologies (efficiency) Conservation of species and habitats Punctual services Training and education Customer service Social benefits Reconciling career and family internally Very important Introduction Sustainability Report 2016/2017 17
102-5 Hamburg Süd as part of the Oetker Group (until November 30, 2017) 102-18 Dr. August Oetker KG Advisory Board of Group Executive Board: Advisory, control, and Dr. August Oetker KG Richard Oetker, Dr. Albert Christmann, veto function Dr. Ottmar Gast, Dr. Niels Lorenz Shipping Beer and Sparkling Food nonalcoholic wine, wine Banking Other interests beverages and spirits Hamburg Süd- Group Executive Board: Dr. Ottmar Gast (Chairman), Dr. Heino Schmidt, Advisory and supervisory Advisory Board of the Dr. Arnt Vespermann, Frank Smet, function, appointment and Hamburg Süd Group Peter Frederiksen dismissal of members of (until June 30, 2017) the Executive Board his organizational chart was valid until November 30, 2017. The acquisition of Hamburg Süd by Maersk Line took T effect on December 1, 2017. The new Hamburg Süd Executive Board is made up of Dr. Arnt Vespermann (CEO), Frank Smet (CCO), and Jakob Wegge-Larsen (CFO). Memberships of associations and initiatives 102-13 ICCO Box Club – International Council of Containership Operators Memberships at management level. Commitment at project level or in working groups. 102-10 On December 1, 2017, one month before the end of the reporting period, Maersk Line’s ac- quisition of Hamburg Süd was approved. As announced, the operational functions will be integrated and in the first months of 2018 this has successfully progressed, for ex- ample to ship management, but also to logistics, network, marine operations, and pro- curement. Wherever possible and foreseeable, we point out changes in this report, some of which have already taken place. You can find out more about this not only in the in- dividual chapters, but also in the Foreword by the Executive Board on page 07. 18 Sustainability Report 2016/2017 Introduction
Hamburg Süd at a glance 4,686,000 102-7 TEUs >250 offices approx. 6,500 employees 5.42 USD bn revenue* 171 ships** 582,554 containers >90 services * The revenue figures relate only to the container business. ** In addition to 116 container ships, this figure also includes bulkers and tankers. Introduction Sustainability Report 2016/2017 19
Locations Hamburg Süd and its subsidiaries are represented with some 250 offices in over 100 countries worldwide, more than 100 of them company-owned. The company’s organizational units are subdivided into five regions. 102-4 U RE Region North America (RNA) Hamburg Canada USA Morristown RN A Miami Region Caribbean and Latin America West Coast (RCW) Aruba Curaçao Jamaica Bahamas Dom. Republic Martinique Barbados Ecuador Mexico Belize El Salvador Nicaragua Bolivia Guadeloupe Panama Chile Guatemala Peru Colombia Guyana Puerto Rico São Paulo Costa Rica Haiti Trinidad and Tobago Cuba Honduras Venezuela RC W Region South America RSE East Coast (RSE) Argentina Brazil Paraguay Uruguay 20 Sustainability Report 2016/2017 Introduction
Region Europe (REU) Algeria Denmark Iceland Lebanon Poland Switzerland Austria Egypt India Lithuania Portugal Syria Bahrain Estonia Iran Malta Qatar Tunisia Bangladesh Finland Ireland Morocco Russia Turkey Belarus France Israel Netherlands Saudi Arabia United Arab Emirates Belgium Germany Italy Norway Slovenia United Kingdom Cyprus Greece Kuwait Oman Spain Czech Republic Hungary Latvia Pakistan Sweden Hong Kong Region Asia Pacific (RAP) American Samoa New Caledonia Angola New Zealand Australia Papua New Guinea Cambodia Philippines China Samoa Congo Singapore Cook Islands South Africa Fiji South Korea French Polynesia Sri Lanka Hong Kong Taiwan Indonesia Thailand Japan Tonga Malaysia Vietnam RA P Introduction Sustainability Report 2016/2017 21
COMPLIANCE Anti-corruption Page 24 Fair competition Page 26 Data privacy and data security Page 26 22 Sustainability Report 2016/2017 Compliance
Compliance Sustainability Report 2016/2017 23
Compliance – binding basis for our actions 103-1 Compliance with applicable laws and regula- 103-2 tions – whether domestic, foreign or suprana- 103-3 tional – forms the basis of our business policy 88 % 419-1 and determines our actions. We expect the same of our partners and, of course, of each $ of our employees. Our Principles of Social and Ecological Responsibility, our code of conduct and our safety, environmental, and quality policy set out this mission accord- ingly. Because only if we act in compliance with the law and in a trustworthy manner o date, 88 % of the national companies and business T units have been analyzed for corruption risks. can we build positive and mutually beneficial business relationships and partnerships that secure Hamburg Süd’s long-term success. possible consequences, but also to tackle the root causes of corruption. Risk assessments In order to ensure global compliance with of individual regional companies and business statutory requirements at all times, Hamburg units are conducted on an as-needed basis Süd has established a compliance management and reveal where potential risks and scope for system that operates independently of the rest optimization lie – 35 such assessments have of the organization. The Compliance Officer at been carried out to date. With the exception of the Hamburg location reports directly to the so-called facilitation payments, which are some- Executive Board and is supported worldwide times expected in ports and on canal passages by some 50 Compliance Coordinators in the to expedite handling, no significant risks were regions and at our subsidiaries. They are the identified. Together with other market partici- first point of contact for staff seeking assistance pants, we develop strategies to counter such and advice in warding off possible breaches of demands (see also the paragraph after next). the law. The Compliance Officer is also the first person to whom any violations within Hamburg Süd or by our agencies, suppliers, and service providers should be reported. This contact HQ 100 % may, of course, also be made anonymously. HQ/REU 99 % HQ/REU 97 % With the exception of the cases mentioned in RAP 99 % the section “Fair competition” (see page 26), no RAP 99 % fines or nonmonetary sanctions were imposed RCW 96 % on Hamburg Süd during the reporting period 85 % RCW for noncompliance with laws and regulations. RNA 100 % RNA 99 % 103-1 Anti-corruption RSE 99 % RSE 95 % 103-2 103-3 Corrupt business practices have no place at Governance Body Members 205-1 Hamburg Süd and contradict our understand- Management 205-2 ing of a sustainable corporate policy. They Specialists (incl. coordinators) endanger free competition and can cause lasting harm to the reputation of the companies involved. That is why we work continuously at nti-corruption training is compulsory for all Hamburg A Süd employees. The participation rate is correspond- various levels not only to sensitize our employ- ingly high. (For the abbreviations of the regions see ees to the issue and make them aware of the page 20/21.) 24 Sustainability Report 2016/2017 Compliance
Regardless of their position and activity, all of 102-12 our shore-side employees undergo manda- 102-13 tory online anti-corruption training. In mari- 103-2 time operations, risks and best practices are 103-3 communicated within the scope of regular Hamburg Süd has been involved in the 205-2 officers’ briefings. All personnel, including Maritime Anti-Corruption Network since 2013 – the Executive Board, are made aware of for a maritime economy free of corruption. Hamburg Süd’s anti-bribery and anti-corruption policy, which has been in force since 2013. Among other things, Hamburg Süd is partici- Hamburg Süd has also been actively involved in pating in the Suez Canal “Say No” campaign the Maritime Anti-Corruption Network (MACN) launched in 2015 and has played a pioneering since 2013 in an effort to tackle these problems role here. The MACN analysis shows that the across the industry. This global initiative works situation on the ground has improved signifi- toward the vision of a maritime industry free of cantly in the interim. The ships of all participat- corruption. To this end, members identify best ing shipping companies pass through the canal practices and take collective action to combat without delays or other disruptions. Demands illegal personal benefits. To address not only the for cigarettes, for example, have fallen just as symptoms but also the root causes of corrup- sharply as threats of violence against ships and tion, MACN cooperates closely with govern- crews. This shows that joint, decisive action ments and various international organizations. is an effective way of combating corruption. Compliance Sustainability Report 2016/2017 25
92 % he “Competition Compliance” online training was T introduced in the reporting period. Most of the employees for whom the training is obligatory have already completed it. is closely involved in the self-assessment of these cooperation agreements with competi- tors and therefore acts as a governance body. In the period under review, six legal actions were brought against Hamburg Süd – in some 103-1 Fair competition cases in concert with other market partici- 103-2 pants – concerning anti-competitive behavior 103-3 Fair competition is important because it ad or violations of antitrust law. Three of these 206-1 vances the entire market. Hamburg Süd actions have already been discontinued or therefore naturally respects prevailing anti-trust settled without a fine, and in another, a deci- legislation. In order to embed our principles, sion was taken to impose a low five-figure fine. which are anchored in the company’s code of The other two investigations are ongoing. conduct and in our safety, environmental, and quality policy, in the daily work of our employ- ees, we introduced an online training course Data privacy and data security in the reporting period entitled “Competition Compliance.” With the help of this tool, selected Digitalization is also progressing apace in ship- groups of employees receive training on issues ping. In this context in particular, the protection related to competition law and the avoidance of and security of employee, customer, and partner infringements and are given concrete recom- data is of particular importance to Hamburg mendations for action in specific shipping situa- Süd. This requirement was also affirmed by tions. The training is obligatory for all employees our stakeholders in the survey underlying this who are in direct contact with customers and report, who rated the topic as one of the most competitors or who work in procurement. important of all. In order to fulfill our respon- sibility in this area, we have established fixed We behave fairly toward our competitors above processes and guidelines for data privacy and and beyond the legal requirements. With many data security. Responsibility for all information of them we work together in various industry security issues is vested with the Corporate initiatives and even cooperate in day-to-day Information Security Officer (CISO) who is business: we allocate capacities on board our supported by five Regional Information Security ships via so-called vessel sharing agreements Officers (RISOs) – the IT managers of the Ham- and slot charter agreements or, conversely, burg Süd regions – and three IT managers from secure capacities on selected routes of our our subsidiaries. The RISOs handle all informa- competitors. The Compliance Organization tion security inquiries in their respective regions 26 Sustainability Report 2016/2017 Compliance
and meet regularly with the regional manage- In addition, the Data Protection Officer advises 103-2 ment. The results of these meetings are report- employees in Germany on all matters relating to 103-3 ed to the CISO. He or she presents the signif- data protection and is the point of contact for 418-1 icant topics twice a year at the meeting of the complaints regarding data protection violations. Information Security Management Board, which In the regions, this function is assumed by the apart from him/herself also includes the Chief Compliance Officers. In order to support our Executive Officer (CEO) and the Global Head of employees in their daily handling of sensitive data Information Technology and Services. This high- and to provide them with the necessary knowl- est governance body for data security takes all edge, we conduct mandatory online training on important decisions and initiates improvements. the subject of information security for all new em- ployees. Subsequently, all employees are required to undergo refresher training every two years. As in the two previous years, there were no incidents of data leaks, data theft, or loss, or substantiated complaints regarding breaches of No incidents of data leakage, customer privacy during the reporting peri- data theft, or loss during the od. The mechanisms and processes in place reporting period. have thus repeatedly proven to be effective. Compliance Sustainability Report 2016/2017 27
ENERGY AND EMISSIONS Ship design and ship technology Page 32 Ship operation Page 32 Reefer containers Page 35 Energy consumption Page 35 Air emissions Page 36 Environmental balance Page 38 Spotlight: fuel switch in Chile Page 40 28 Sustainability Report 2016/2017 Energy and emissions
Energy and emissions Sustainability Report 2016/2017 29
Energy and emissions – on a sustainable course 102-10 In the period under review, Hamburg Süd containers, the entire container fleet is now 15 103-1 had 52 owned and 64 chartered contain- percent more efficient on average than in 2010. 103-2 er ships in service, as well as 55 chartered 103-3 bulkers and tankers. All owned vessels were Where a lot of energy is converted into power, transferred to our new owner in spring 2018. emissions occur. We are aware that the scale In the future, Maersk Line will be respon- at which we can reduce the air emissions of sible for the development, management, our ships plays a central role in assessing our and operation of the fleet and thus also for sustainability performance. All our energy effi- defining the associated environmental and ciency measures also contribute to our original efficiency targets. All objectives, measures, target to reduce our fleet’s CO2e emissions by and results reported below relate to the 45 percent by 2020.* The International Maritime 2016/17 reporting period and are therefore Organization (IMO) is currently working on a still the responsibility of Hamburg Süd. cross-industry strategy to reduce greenhouse gas emissions from ships: in April 2018 the Most of our total energy consumption is ac- initial greenhouse gas (GHG) reduction strategy counted for by the operation of our ships. So was adopted. It sets forth specific objectives for this is precisely where we place the focus of international shipping, like reducing “the total our energy-saving measures: small and large annual GHG emissions by at least 50 percent savings potential can be leveraged in ship by 2050 compared to 2008.” These objectives design as well as with the help of the technol- will set the framework for the development of ogy on board and in day-to-day operation. The specific short,- mid,- and long-term measures. Ship Energy Efficiency department provided Through our memberships in the World Ship- advice on these and other energy issues ping Council (WSC) and the Association of Ger- across the entire organization. Our almost man Shipowners (VDR), we are also participat- 84,000 reefer containers also consume energy ing in this process and welcome the aim of the to achieve their cooling performance. By IMO to define globally binding standards in line using newbuildings and modernizing existing with the goals set out by the Paris Agreement. *Per TEUkm compared to the base year 2009. 30 Sustainability Report 2016/2017 Energy and emissions
Energy and emissions Sustainability Report 2016/2017 31
102-12 Ship design and ship technology tests and other simulation methods, resulting 103-2 in a reduction of fuel consumption of almost 103-3 Even before a ship sails the oceans for 4 percent. Where possible, all newbuilding Hamburg Süd for the first time, the course series have been optimized in this manner, and can be set for lower energy consumption. To in some cases we have also collaborated with this end, we work closely with our shipyard charter shipping companies to achieve simi- partners in the search for new solutions. For lar savings with ships on long-term charter. In addition to ship design, a number of tech- nical innovations contribute to reducing fuel consumption. These include, for example, the Becker Twisted Fin, which partially cancels out the negative effect of the swirl in the propeller’s Since 2013, Hamburg Süd has voluntarily slipstream, or the so-called rudder bulb which, disclosed CO 2 emission data and other attached to the rudder, enhances the water flow information through the Carbon Disclosure into and out of the propeller. In addition, the Project (CDP), which collects and publishes newbuildings of our “Polar” class have been self-reported environmental data from com- equipped with a wave radar that makes the di- panies and cities around the globe. rection of the waves and the ocean current vis- ible. The ships’ course can be aligned with this and thus optimized – also in terms of efficiency. example, optimizing smaller main engines for partial-load operational ranges and running at lower cruising speeds can produce a pos- Ship operation itive effect on fuel consumption compared to larger engines – as shown by the 9,600-TEU However, the greatest savings potential lies in ships in our “Cap San” class. The standard everyday operations. Deploying Hamburg Süd ship’s hull can also be optimized using flow ships to keep fuel consumption as low as pos- 32 Sustainability Report 2016/2017 Energy and emissions
sible en route from the port of departure to the port of destination has therefore always been our central objective. Like many others in the market, 538.5 we switched to slow steaming many years ago, i.e. a cruising speed of between 16 and 18 knots, saving up to 40 percent in fuel compared to a g/tkm speed of 20 knots. This corresponds to around 45 tons per day and ship for a ship in our “Santa” class. Even taking deployment of an ad- ditional ship per route into account to enable the services to operate in the usual rhythm despite 67.2 g/tkm longer voyage times, the model in most cases pays off economically as well as ecologically. Just as important as speed is the chosen route, Cargo plane or adjusting the ship’s course as required. Truck Storm and heavy seas, for example, can drive fuel consumption up. A weather routing pro- gram on board all Hamburg Süd ships analyzes meteorological data and supports the ship’s 26.2 g/tkm 14.8 command either by giving the bad-weather area 16.6 g/tkm g/tkm a wide berth or adjusting the speed so that the vessel reaches the affected area ahead of or only after the forecast spell of adverse weather. Diesel locomotive Barge Container ship The vessel’s trim is also optimized with the aid of software – the better its position in the water, ompared with other means of transportation, the container ship per- C the less propulsion energy it requires. forms well in terms of CO 2 e emissions.* *Source: CO 2 -Berechnungen in der Logistik (CO 2 Calculations in Logistics) by Andre Kranke, Martin Schmied, and Andrea Dorothea Schön, Munich 2011. Energy and emissions Sustainability Report 2016/2017 33
34 Sustainability Report 2016/2017 Energy and emissions
The Eniram Dynamic Trimming Assistant re- until Fleet Management has been integrated 102-13 cords the relevant parameters on all Hamburg with Maersk Line, information on the position of 103-2 Süd ships, including propulsion power, draft, all Hamburg Süd ships, the respective weath- 103-3 and wind speed/direction. The data is analyzed er conditions, and currents is combined with 302-4 by the system to calculate proposals for opti- additional data. On this basis, we support our mizing the trim, making fuel economies of 3 to 5 ships’ commands in important decisions regard- percent possible. ing route and speed. Much of the data has until recently been collected via the Navigator Insight software system, which was installed on all own and chartered container ships. For example, it used integrated bunker controlling to determine the fuel consumption for each ship accurate to the day, so that countermeasures could be taken promptly in the event of deviations. Most recently, 68 ships were supported, mainly on Hamburg Süd has been a member long-haul routes, but on request also on coastal of the Trident Alliance since 2015 – a joint trips. In severe weather, proactive information initiative of shipping owners and operators about possible alternative routes is provided. In committed to the enforcement of sulfur addition, the Fleet Operations Center monitors regulations in shipping. the increase in hull resistance caused by algae or barnacles, which can lead to increased fuel consumption. Since commissioning, the fuel con- The on-board power supply system that sumption of the monitored ships on the sea pas- supplies our ships with electricity also offers sages has been reduced by almost 10 percent. considerable savings potential. To ensure that these opportunities are exploited, Hamburg Süd has been systematically training its ships’ Reefer containers commands in matters of energy saving for more than ten years. Corresponding instruc- As one of the leading providers of refrigerated tions are set out in the Ship Energy Efficien- container shipments, we used around 84,000 cy Management Plan. The latest technology reefer containers (refrigerated containers) in also contributes to efficient ship operation: the reporting period to bring our customers’ pole-changing fan motors and speed-controlled temperature-sensitive cargo safely to its des- cooling water pumps adapt to the operating tination. Containers need energy to provide conditions and thus achieve energy savings the required cooling capacity. With the goal to of between 70 and 85 percent. All unneeded increase efficiency while maintaining perfor- fans and pumps as well as unneeded lighting mance, we achieved energy savings of over are consistently switched off. Part of our fleet 30 percent in newbuildings between 2010 and is also equipped with the Bluetracker fleet 2015. For the existing fleet, the newbuilding performance management software, which program and further modernizations such records and analyzes the energy consump- as software updates on average increased tion of all machinery and power units in the the efficiency by more than 15 percent. on-board network in real time. This creates a holistic energy profile that identifies irregularities, inefficiencies, and potential for improvement. Energy consumption At a higher level, the Fleet Operations Center at As described above, Hamburg Süd is contin- our Hamburg headquarters has been supporting uously making adjustments aimed at increas- and optimizing ship operations since 2015. Here, ing energy efficiency in day-to-day operations Energy and emissions Sustainability Report 2016/2017 35
Reduction of energy consumption of owned and 302-3 Energy intensity chartered container ships (in 1,000 GJ) 302-4 2014 88.1 % 2014 10,731 2015 86.3 % 2015 9,632 2016 85.8 % 2016 13,442 2017 79.3 % 2017 23,613 J/TEUkm index; the energy intensity of all fuels M pplying the efficiency standards of the 2010 base A consumed on board ships has been decreasing for year, Hamburg Süd would have additionally consumed several years. Base year is 2012 (100 %). the above energy volumes. A variety of efficiency measures have made a significant reduction possible. and lowering fuel and electricity consumption. cases, hybrid fuels are also used, which simi- The more we succeed in this, the greater the larly comply with the 0.1 percent limit. In 2020, dividends it will bring for the environment while new legislation will come into force that will set at the same time enhancing our cost-effec- the sulfur content of marine fuel outside these tiveness. As a result of all these measures, we designated areas at a maximum of 0.5 per- were able to reduce our energy requirements in cent. Hamburg Süd will of course comply to the reporting period not only relative to trans- the new regulations once they are introduced. portation capacity, but also in absolute terms: Hamburg Süd’s consumption fell by 2.2 percent The Navigator Insight software, which we from 2016 to 2017. Our environmental balance developed a few years ago together with a sheet on page 38 provides detailed figures. partner and which was used on all our own and chartered ships until recently, provided an over- view and therefore control of all emissions from 102-10 Air emissions container ships. The system recorded parame- 103-1 ters such as fuel consumption and engine data, 103-2 Although container ships are the most efficient as well as load and waste volumes. Everything 103-3 way to transport goods over long distances in was stored, analyzed, and converted into re- 305-5 terms of CO2e emissions, we have introduced ports, which were distributed to the responsible 305-7 a variety of measures aimed primarily at higher efficiency and lower consumption – while at the same time helping to reduce the emissions of our fleet (see previous sections). As a result of the acquisition by Maersk Line, we will no longer be able to pursue our environmental target of minus 45 percent CO2e emissions by 2020 single-handedly. However, by the end of Hamburg Süd reduced its CO2e 2017 we had already achieved a 40 percent emissions by 40 % per TEUkm.* reduction. We are confident that under the new management our fleet will continue to play its part in achieving emission reduction targets. departments. Here, evaluations were carried out All efficiency measures have a similarly positive that could point to ways to further increasing effect on emissions of other air pollutants such efficiency. All in all, we were able to reduce our as sulfur dioxide, nitrogen oxides and particulate CO2e emissions, as well as other air emissions, matter. In designated special shipping areas, both in relative and absolute terms within the so-called Emission Control Areas, Hamburg reporting period and compared with 2015. Süd’s ships run in accordance with regulations Specifically, for the period from 2016 to 2017, on marine gas oil, which has a maximum sulfur Hamburg Süd reported a reduction of 2.3 per- content of 0.1 percent. While this is consid- cent for CO2e, 3.7 percent for nitrogen oxides, erably more costly, it reduces sulfur dioxide 4 percent for particulate matter and 8 percent emissions by over 95 percent – based on an for sulfur dioxide. Our environmental balance average sulfur content of 2.2 percent. In some sheet on page 39 provides further figures. *Compared to the 2009 base year. 36 Sustainability Report 2016/2017 Energy and emissions
Reduction of greenhouse gas emissions Greenhouse gas emissions intensity (in 1,000 t) 305-4 305-5 2014 66.8 % 2014 573 2015 65.1 % 2015 455 2016 64.8 % 2016 737 2017 59.9 % 2017 1,533 T he intensity of greenhouse gas emissions (in CO 2 e/ pplying the efficiency standards of the 2010 base A TEUkm) has been decreasing continuously for years. year, Hamburg Süd would have additionally produced Base year is 2009 (100 %). the above CO 2 e emissions. A variety of efficiency measures have made a significant reduction possible. Energy and emissions Sustainability Report 2016/2017 37
103-3 Environmental balance sheet – energy consumption 302-1 Trend 302-2 Unit 2014 2015 2016 2017 2016 > 2017 302-4 Total consumption 1,000 GJ* 99,296 120,786 120,778 118,084 –2.2 % 1,000 MWh 27,582 33,552 33,549 32,801 –2.2 % Scope 1 Total (direct) 1,000 GJ 79,655 92,730 92,691 89,474 –3.5 % Container ships 1,000 GJ 73,458 86,458 86,851 83,936 –3.4 % Bulkers & tankers 1,000 GJ 6,161 6,237 5,806 5,506 –5.2 % Other (owned trucks, vehicle fleet, offices) 1,000 GJ 36 36 34 32 –4.1 % Total (energy indi- rect; electricity and Scope 2 district heating) 1,000 GJ 63 67 64 61 –5.3 % Offices and shore- side power California 1,000 GJ 63 67 64 61 –5.3 % Total Scope 3 (other indirect) 1,000 GJ 19,579 27,988 28,023 28,550 1 .9 % Total (energy consumption in the upstream chain of purchased fuels Category 3 and electricity) 1,000 GJ 7,301 9,053 9,033 8,713 –3.5 % Total (energy con- sumption of pur- Category 4 chased shipments) 1,000 GJ 12,184 18,836 18,893 19,743 4.5 % Total (energy consumption for Category 6 business travel) 1,000 GJ 94 100 97 94 –2.9 % *GJ = Gigajoule. Scope 1: container ships 0.1 % Scope 1: bulkers and tankers 16.7 % S cope 1: other (owned trucks, vehicle fleet, offices) 7.4 % 0.1 % cope 2: total (energy indirect; S < 0.1 % electricity and district heating) 71 .1 % 4.7 % cope 3: category 3, total (energy S consumption in the upstream chain of purchased fuels and electricity) cope 3: category 4, total (energy S consumption of purchased shipments) cope 3: category 6, total (energy S consumption for business travel) Energy consumption by area 2017 (difference to 100 % due to rounding). 38 Sustainability Report 2016/2017 Energy and emissions
Environmental balance sheet — emissions 103-3 305-1 Trend Unit 2014 2015 2016 2017 2016 > 2017 305-2 305-3 Carbon dioxide equivalents 305-5 (CO 2 e)* 1,000 t 7,654 9,275 9,328 9,114 –2.3 % 305-7 Scope 1 Total (direct) 1,000 t 6,282 7,285 7,316 7,064 –3.4 % Container ships 1,000 t 5,711 6,709 6,740 6,514 –3.4 % Bulkers and tankers 1,000 t 479 484 451 427 –5.2 % Other (owned trucks, vehicle fleet, offices, reefer coo- lant losses) 1,000 t 92 92 126 123 –2.0 % Total (energy indi- rect; electricity and Scope 2 district heating) 1,000 t 5 6 5 5 –13.5 % Offices and shore-side power California 1,000 t 5 6 5 5 –13.5 % Total Scope 3 (other indirect) 1,000 t 1,367 1,984 2,006 2,045 1.9 % Total (energy consumption in the upstream chain of purchased fuels Category 3 and electricity) 1,000 t 530 668 668 645 –3.5 % Total (energy consumption of purchased ship- Category 4 ments) 1,000 t 830 1,310 1,332 1,394 4.7 % Total (energy consumption for Category 6 business travel) 1,000 t 6 7 7 6 –2.9 % Sulfur dioxide (SO 2 ) 1,000 t 94 107 113 104 –8.0 % Nitrogen oxides (NO X ) 1,000 t 167 203 198 190 –3.7 % Particulate matter (PM 10 ) 1 .000 t 14 17 16 16 –4.0 % *In addition to CO 2 , CO 2e also includes other greenhouse gases such as methane. Scope 1: container ships 0.1 % Scope 1: bulkers and tankers 15.3 % cope 1: other (owned trucks, S vehicle fleet, offices, reefer coolant losses) 7.1 % Scope 2: total (energy indirect; 0.1 % electricity and district heating) 1.4 % 4.7 % 71.5 % cope 3: category 3, total (energy S consumption in the upstream chain of purchased fuels and electricity) Scope 3: category 4, total (energy consumption of purchased shipments) Scope 3: category 6, total (energy consumption for business travel) Greenhouse gas emissions by area 2017 (difference to 100 % due to rounding). Energy and emissions Sustainability Report 2016/2017 39
Fuel switch in Chile – together for more sustainability In spring 2017, in cooperation with our customer Electrolux, one of the world’s leading manufacturers of household appliances, we launched a pilot project to reduce sulfur dioxide emissions. Among other things, sulfur dioxide can contribute to soil acidification and to respiratory diseases. The key to reducing emissions lies in switching from heavy fuel oil (HFO) as standard to higher-grade marine gas oil (MGO). The project proved that when shippers and shipping companies work together, it is possible to implement measures for greater sustainability that go beyond the minimum legal requirements. Low-sulfur fuel has so far been used in com- The idea for a joint project was born in a mercial shipping mainly in designated special working group of the Clean Cargo Working transit areas, called Emission Control Areas – Group (CCWG), in which both Electrolux for example in the North Sea and Baltic Sea or and Hamburg Süd have been members for off the coast of the USA and Canada, where many years. The CCWG is an association of more stringent limit values for sulfur content shipping companies, freight forwarders, and apply. While marine gas oil permits a signifi- leading brand manufacturers that have set cant reduction in sulfur dioxide emissions, it is themselves the goal of minimizing the neg- also significantly more costly than conventional ative environmental impacts of global freight heavy fuel oil – the average price difference transportation and promoting responsible in the reporting period was over 60 percent. transportation. Taking the project forward As desirable as this sustainable solution is, was then a question of teamwork, involving the use of MGO also needs to be economi- Electrolux and various Hamburg Süd depart- cally viable. In our project with Electrolux, both ments from ship operation to procurement. sides – carrier and shipper – accepted addi- tional efforts to achieve greater sustainability. The pilot project was implemented during the layover of the Hamburg Süd ship “Santa Clara” (7,154 TEUs) in the Chilean port of Iquique from March 1 to 2, 2017. Instead of using HFO, the auxiliary engines and boilers were run on MGO. The latter has significant- ly lower sulfur content, in this case resulting in more than 98 percent of sulfur dioxide emissions being avoided during the port stay. We repeated the project in Chile in the spring of 2018, and we additionally carried out the fuel switch in Mexico and Peru. In respect of the container carriers in its supply chain, Electrolux has in the past made re- ducing CO2 emissions a focus of its “For The Better” sustainability strategy. Its next step is now to reduce sulfur oxides in ports where no corresponding regulations are in place. The innovative aspect of the project was not the fuel switch itself. Rather, it is the fact that both sides accepted additional efforts and higher costs in order to jointly make the value chain more sustainable and environmentally friendly. 40 Sustainability Report 2016/2017 Energy and emissions
Energy and emissions Sustainability Report 2016/2017 41
ENVIRONMENT Oil spills Page 44 Ballast water Page 44 Protection of endangered species Page 46 Sustainable materials Page 46 42 Sustainability Report 2016/2017 Environment
Environment Sustainability Report 2016/2017 43
Environmental protection – responsibility for the marine habitat 102-10 As a globally operating logistics service provid- ing procedures and checklists to ensure every- 103-1 er, we are aware of the environmental impacts thing runs smoothly on board and regular risk 103-2 caused by our services and work continuously to assessments that trigger standard or individual 103-3 reduce them. In addition to energy and emissions measures to avert or limit risks where necessary. (see separate chapter starting on page 28), we focus especially on the marine environment. The demands we place on ourselves and on our part- ners in this respect are formalized in our Princi- ples of Social and Ecological Responsibility as well as in our safety, environmental, and quality No oil spills within policy. Because the external viewpoint and critical the reporting period. exchange are also important in this context, Hamburg Süd is involved in a number of envi- In compliance with legal requirements, all ronmental and industry initiatives and thus also Hamburg Süd ships in the “Santa” class and accepts its responsibility outside the company. above are fitted with so-called inboard protected fuel tanks: they lie deep inside the ship, so that To underscore this commitment, we set our- even if the ship’s hull is damaged they are well selves binding and verifiable environmental protected. The bilge water – a water-oil mix that targets several years ago. These relate to the collects at the lowest point of the engine room greenhouse gas emissions of our fleet (see – is treated in a de-oiling unit to a maximum “Energy and emissions” chapter), the avoidance limit value of 15 ppm in line with international of oil spills, and the use of more sustainable regulations. All our ships from the “Monte” class materials in container newbuildings. As respon- upward go one step further and de-oil down to sibility for both the operation of Hamburg Süd 5 ppm, which is equivalent to just 5 parts of oil ships and container production – and thus all per one million parts of water. Other measures to related goals – will in the future be integrat- protect the oceans from pollution include biode- ed with Maersk as a result of the acquisition, gradable lubricants for the bow and stern thrust- the following information only relates to the ers and air chambers in the stern tube seals that status quo. Smaller goals are defined individ- reliably prevent oil leakages. To enable the com- ually at site level as well as within the frame- pany to learn from the experiences of others and work of the integrated management system. to benefit from pooled expertise, Hamburg Süd also participates in the Container Ship Safety Fo- rum, a network that aims to further improve safe- 103-1 Oil spills ty standards in the container shipping industry. 103-2 103-3 Spillages of fuels and lubricants into the oceans, Avoiding any contamination caused by fuels 306-3 rivers, and harbor basins is one of the greatest and lubricants is one of our central environ- environmental risks in the shipping business and mental goals. To monitor our performance in can cause pollution that may severely threat- this area and ensure that the measures taken en marine flora and fauna and coastal areas. are sufficient, every single incident is record- In addition to other objectives, the high level ed in detail, regardless of its extent, cause, of safety on board all Hamburg Süd ships is and impact. There were no oil spills across therefore aimed at preventing the occurrence of the entire fleet during the reporting period. such incidents as oil spills. The Hamburg Süd fleet is certified in accordance with the DIN EN ISO 14001 environmental management stan- Ballast water dard, and strict compliance with the International Safety Management Code (ISM Code) also Ships take on ballast water to correct and stabi- ensures maximum safety. This includes operat- lize the trim of the ship and optimize operating 44 Sustainability Report 2016/2017 Environment
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