SUSTAINABILITY REPORT 2017 - MSC
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2017
SUSTAINABILITY
REPORT
2017
SUSTAINABILITY
REPORT
TABLE OF CONTENTS
SUSTAINABILITY
REPORT
04 A WORD FROM OUR PRESIDENT & CEO
06 THE MSC GROUP
10 MATERIALITY ASSESSMENT
& STAKEHOLDERS
16
SOCIAL INCLUSIVE
APPROACH
32
MSC’S COMMITMENT
TO THE ENVIRONMENT
46
HEALTH AND
SAFETY
58
BUSINESS ETHICS
AND PROTECTION
OF HUMAN RIGHTS
70 ABOUT THIS REPORT
A WORD FROM OUR PRESIDENT & CEO WHEREVER WE OPERATE, ON LAND OR AT SEA, OUR PEOPLE REMAIN OUR GREATEST ASSET. In 2017, MSC successfully maintained its leadership In addition, we have demonstrated how these pillars are position in the global economy, despite slow trade strictly linked to our support towards the Ten Principles of growth and high operating costs that have created the United Nations Global Compact and our contribution in uncertainty within the international container shipping joining global efforts for the progressive realisation of the sector. Achieving such economic performance did not United Nations Sustainable Development Goals (SDGs). come without challenges at all levels. Yet, we pursued Yet, above all, we have acknowledged the engagement our goals by remaining true to our roots and our core and dedication of our 70,000 employees who bring to family values, promoting a sustainable business model life our sustainability approach and our Group family that goes far beyond a “business as usual” approach. values. This is what makes us so successful today and Regardless of the challenges and transformation we what, at the same time, creates not only countless might face in today’s business world, our approach does opportunities but also great responsibilities. not and will not change: we have a genuine passion for We are running our activities and operations at a time the sea, an unparalleled nautical heritage and a strong of increasing environmental policies and regulations, commitment to our employees and communities. such as the 2020 global cap on sulphur content in marine Wherever we operate, in both developed and develop- fuel oil, which our technical teams started to prepare ing countries, both on land or at sea, our people remain for in 2013. We should not forget that reaching these our greatest asset. Our strategies focus on building ambitious environmental goals and targets represents and maintaining strong and reliable relationships with a financial commitment of billions of dollars. In this our stakeholders, communities and business partners respect, we continue to invest in retrofitting, the optimi- as well as securing continuity and long-term employ- sation of bulbous bow and propellers, ballast water ment opportunities for our employees. We do this while management, new build programs and latest availa- making significant investments in low-carbon technol- ble technologies to reduce greenhouse gas (GHG) and ogies and promoting integrity and ethical practices sulphur oxide emissions. By doing this, in 2017, we through capacity-building efforts and training. proudly achieved an 11% reduction in CO2 per tons of In our 2017 Sustainability Report, we further illus- cargo moved on a per mile basis, compared to 2015. trate how all these elements are an integral part of our However, it is important to acknowledge that our decision-making process and therefore embedded in tremendous progress in energy and operational effic MSC’s four fundamental sustainability pillars: the promo- iency is also achieved thanks to the daily efforts and tion of social inclusion and a shared value approach, our outstanding expertise of our dedicated teams working respect and care for the environment, our continuous at the Headquarters, in our technical offices and MSC’s focus on occupational health and safety and our strong Agencies worldwide. commitment to promoting respect for internationally So, we continue to rely on governments to provide clar recognised human rights principles and standards. ity with practical and meaningful legislation, regulation 4 A WORD FROM OUR PRESIDENT & CEO
Capt. Gianluigi Aponte Mr. Diego Aponte Mrs. Alexa Aponte Vago
Group Executive Chairman Group President & CEO Group Chief Financial Officer
and standards that take into account real economy situation to limit environmental damage and protect
imperatives, financial implications and operational lives. No amount of technological progress or digitalisa-
challenges. This can certainly contribute to reducing tion, it seems, can help fix this relatively simple problem
barriers and promoting the respect for human dignity in our industry.
and decent long-term working conditions for all employ- I sincerely hope that sharing more about these topics
ees as well as the next generations of employees, in line and challenges with our customers, employees, suppli-
with the 2030 Agenda for Sustainable Development. ers and our wide range of stakeholders will deepen
Similarly, we continue to rely on our stakehold- our strategic partnerships and strengthen our concert-
ers to further engage in promoting safety at sea and ed actions to advance social and environmental
support our ongoing efforts to prevent potential risks performance.
to the health and safety of crew members as well as We look forward to continuing to join forces to foster a
environmental accidents. We are very active in indus- sustainable and responsible approach to doing business
try associations and forums to highlight our concerns throughout our sector and beyond.
to our customers. We believe that more accuracy and
transparency is needed. It is imperative that shipping
companies are well informed on what is being transport-
ed in containers in order to safely manage dangerous or
potentially dangerous cargoes. The public may assume
the shipping line is at fault – it is our logo on the ship –
but many of the tragedies that occur in our sector are
down to incorrectly declared cargo. And where there
have been accidents at sea, we have always taken all Diego Aponte
necessary actions and moved promptly to rectify the President and CEO
MSC SUSTAINABILITY REPORT 2017 5
6 THE MSC GROUP
CONTRIBUTING TO THE SUSTAINABLE OCEAN ECONOMY
THE MSC GROUP
Headquartered in Geneva, Switzerland, and privately-owned,
the
MSC Group is a recognised world leader in the maritime sector, serving
millions of customers around the globe. Our innovative, flexible and
unique approach to shipping has led to impressive growth in terms of
volume and fleet capacity. This has enabled us to diversify our portfolio
of activities, from a one-vessel operation in 1970 to a successful and
sustainable global business today.
Today, the MSC Group encompasses a Cargo Division respect for human rights and environmental standards
with MSC Mediterranean Shipping Company (MSC), at an international level.
Terminal Investment Limited (TiL), MEDLOG, and a The Cargo and Passenger Divisions have different materi-
Passenger Division with MSC Cruises and Mediterranean ality and due diligence assessments, mainly due to the
passenger ferries, Grandi Navi Veloci (GNV) and SNAV diversity of their respective activities, missions and business
(Società Navigazione Alta Velocità). strategies. For instance, the relevance of internal and exter-
Through our wide range of companies, we contribute nal factors and their prioritisation in decision-making, risk
to connecting people and countries by offering a global management and risk assessment processes vary.
integrated and holistic network of transportation and These factors include the international standards and
logistics solutions by land and sea. We are engaged in regulations that each division is assumed to comply
the promotion and development of key ocean industries, with, specific stakeholders’ interests and concerns,
such as maritime transport and tourism, which are essen- broader social expectations and the capacity to exercise
tial for fostering economic growth and social welfare. influence on upstream (such as the supply chain) and
We have built our long-standing reputation with our downstream (such as customers) entities.
customers and stakeholders by providing sustainable In this respect, this report intends to cover the MSC
and resilient transportation services and infrastructure, Group Cargo Division, highlighting progress made
while promoting inclusive and lasting social benefits towards the implementation of the United Nations
wherever we operate. (UN) principles-based approach and the promotion of
We significantly contribute, in a responsible way, to the the UN Sustainable Development Goals (SDGs), in line
growth of shipping-related services, operations and with the company’s commitment to the United Nations
business activities, in both developed and developing Global Compact and the Global Report Initiative (GRI)
countries. Additionally, we facilitate the development of standards.
international trade and contribute to fostering countries’ Some initiatives are described as Group initiatives
competitiveness by providing access to our global network. when core topics have relevance for both Divisions and
Being a family-owned business, the companies of the promote a strategic common approach to protecting and
MSC Group are guided by common Group values and a supporting human rights and our strong commitment
long-term vision promoting fair business practices and to environmental stewardship.
*Source: “Ocean Economy in 2030”, OECD, 2016
MSC SUSTAINABILITY REPORT 2017 7
CARGO DIVISION PASSENGER DIVISION 8 THE MSC GROUP
ORGANISATIONAL STRUCTURE
CARGO DIVISION PASSENGER DIVISION
MSC is a transportation service provider carrying physi- The MSC Group’s Passenger Division is comprised of
cal commodities from one point in the world to another. cruise and ferry businesses.
The company operates a fleet of 510 vessels, calling at MSC Cruises is the world’s largest privately owned
500 ports. Headquartered in Geneva, Switzerland, MSC cruise company and the number one cruise line in
has 480 offices in 155 countries and employs 47,000 Europe, South America, South Africa and the Gulf
people for its shipboard and ashore activities. Region. A game-changer in the world of cruising, the
Shipboard operations are largely monitored by third company has achieved 800% growth in its first ten years
parties due to certification requirements and routine by building one of the youngest cruise sea fleets and a
inspections set out by local port authorities and other global reputation in the industry. The MSC Cruises fleet
entities. MSC local agencies are responsible for ashore is currently made up of 15 ultra-modern, highly innova-
activities. tive and elegantly designed ships that welcome around
MSC, through its Terminal Investment Limited (TiL) two million guests per year.
subsidiary, has interests in 54 terminals within 29 With an ambitious investment plan of EUR€11.6 billion,
countries across five continents. TiL invests in, devel- the MSC Cruises fleet is set to expand to 25 mega-cruise
ops and manages container terminals in strategic ships by 2026. It has recently designed six new ship
global locations, providing essential infrastructure for class prototypes that will push the boundaries of naval
international trade. architecture and design. MSC Cruises’ services are sold
MSC’s logistics arm, MEDLOG, offers a variety of ser across the globe through a distribution network in 70
vices to customers in over 50 locations around the countries. The company employs over 23,500 people
world. These services include transportation by road, worldwide, both ashore and on board its ships.
rail and barge, off-dock storage, container maintenance In addition to ocean cruises, the MSC Group’s Passenger
& repairs (M&R), warehousing & distribution, project Division includes GNV and SNAV, two leading ferry
cargo and reefer container services. MEDLOG direct- companies that connect a large number of ports in the
ly employs more than 6,000 employees and generates Mediterranean Sea all year round.
approximately 2,000 indirect jobs around the world.
The technical management of MSC vessels and
crews is handled by MSC Shipmanagement Technical
offices, located in Limassol, Cyprus and Sorrento, Italy
respectively.
MSC SUSTAINABILITY REPORT 2017 9MATERIALITY ASSESSMENT
& STAKEHOLDERS
PROMOTING SDGs AND SUSTAINABILITY
SUSTAINABILITY CULTURE GOVERNANCE
MSC is strongly committed to achieving economic perfor- Sustainability Steering Committee
mance while promoting ethical business throughout its In 2017, MSC enhanced the role and structure of its
value and supply chains. For this reason, environmen- Sustainability Steering Committee.
tal and social considerations are equally important to Led by the Aponte family and executives from the
us and embedded in our decision-making process and Headquarters in Geneva, the Committee is respons
business models. We work responsibly, implementing ible for providing strategic guidance on matters such
sustainable practices, procedures and policies based as environmental protection, occupational health &
on good corporate governance, integrity and care for safety, sustainable development, human rights and
the environment. These are reflected in the way we take social welfare.
decisions, interact with one another and behave with One of the key strategic decisions taken by the Committee
our customers and stakeholders. Since the signing of is to strengthen the ongoing harmonisation efforts in
the UN Global Compact in 2016, we have increased order to better monitor compliance with our ethical
efforts at Group level to further promote our responsi- and good governance practices throughout our value
ble approach to business throughout our organisation and supply chains. To do so, we have planned to
and in our day-to-day operations, in line with the Ten further improve internal processes and cross-transver-
Principles of the United Nations. In addition, we have sal cooperation among relevant departments and local
reinforced the way we mainstream our Group values and agencies. This will contribute to enhance an organisa-
sustainability into our internal and external communica- tion-wide coordination process led by the Headquarters,
tions by ensuring a cross-departmental collaboration at while maintaining local specificities and further refining
HQ level between the Marketing and Communications business activities and operational strategic actions to
Departments of both MSC and MSC Cruises. advance specific goals. The newly established Global
Human Resources Department will also play a crucial
role in this respect.
A COMMUNICATION TOOL
Sustainability Working Groups
Our Sustainability Report aims to describe our best To effectively mobilise all departments in implement-
practices as well as challenges related to the implemen- ing approved strategies, in 2018 we plan to create ad
tation of the United Nations’ Ten Principles approach and hoc Sustainability Supporting HQ Working Groups
the SDGs. We also wish to raise awareness of the SDGs composed of in-house subject matter experts who will
among our employees and stakeholders, and facilitate be responsible for supporting the integration of sustain-
the understanding of our approach to sustainability. ability into the daily work of the MSC value chain. They
Significant case studies highlighted in our reports will will also underpin the ongoing efforts at HQ level to
be regularly updated by our local agencies via the MSC monitor progress and track sustainability performance
official website to show that continuity is an integral part in strategic priority areas.
of our business model, and to enable our employees and
stakeholders to follow our progress with regards to our
activities and broader sustainability-related initiatives.
10 INTRODUCTION TO THIS REPORTOur values
WE ARE A WE HAVE
Our values shape our culture and
FAMILY PASSION
define the character of our company.
COMPANY
They guide how we behave and make
decisions, they influence recruitment of
The commitment of the founding We are passionate about what
employees, and they are fundamental
Family inspires us with dedication we do, we challenge ourselves
to our operations.
and trust, increasing our sense of to achieve excellence and
belonging. we are tenacious in overcoming
Sharing the family’s entrepreneur- obstacles.
ial spirit leads us to act proactively, Working together with passion and
courageously and responsibly in enthusiasm, we provide a unique
the best interest of our customers experience for our customers.
and our Company.
WE ARE IN WE WE BELIEVE IN
CONTINUOUS CARE FOR EQUAL
EVOLUTION PEOPLE OPPORTUNITIES
Our tradition, expertise, We believe that each person brings Our mission is to provide our
professionalism and ambition unique value. people with personal fulfillment
drive the Company’s fast and We develop authentic relation- and enrichment.
sustainable growth. ships built on ethics, respect and We are committed to sharing our
We strive for the most innovative team spirit. knowledge, delivering training
solutions to embrace change, We truly care about the satisfaction and support enabling our people’s
always respecting safety and the and loyalty of our customers and professional growth.
environment. employees. We ensure fair opportunities
providing long-term career
development, embracing diversity
and valuing all cultures.
We support the UN Sustainable
Development Goals
We believe our approach to
the business and our values will
help us contribute to a more
sustainable supply chain.
MSC SUSTAINABILITY REPORT 2017 11SHARED VALUE APPROACH ENVIRONMENTAL PROTECTION MSC’s decision-making process and shared value One of our main material topics is and will remain our approach are both based on a strategic framework strong commitment to preserving the environment and consisting of four main pillars: social inclusion, protec- biodiversity, in accordance with SDGs 7, 12, 13,14 and tion of the environment, occupational health & safety, 15. Our extensive investments in the latest available business ethics and protection of human rights. Within low-carbon technologies, energy efficiency practices and this framework, in 2017 we began to assess existing operational efficiency systems are regularly assessed to practices, policies and gaps relating to each of those ensure that they meet current and future international pillars against a number of criteria to better identi- regulations. In line with SDG 17, we are actively involved fy our material topics and enhance our sustainability in the Clean Cargo Working Group (CCWG) and we are strategy on key strategic areas. a founding member of the Global Industry Alliance MSC’s business model promotes social inclusiveness (GIA), which is supported by the International Maritime in line with SDGs 1, 2, 3, 8 and 10. We aim to contrib- Organization (IMO) and promotes energy efficiency and ute to long-term socio-economic growth in the countries low-carbon maritime transport systems. In addition, where we operate through community involvement and MSC is part of the board of the World Shipping Council local recruitment, especially in developing countries. Our (WSC), whose goal is to provide a coordinated voice for massive investments also focus on the latest environ- the liner shipping industry on matters such as these. mentally friendly cooling technology such as refrigerated containers, depots and warehouses. This helps to reduc- ing food losses, ensuring quality food, encouraging PARTNERING responsible consumption in line with SDG 12 and enabling FOR WILDLIFE CONSERVATION small farmers to enter global food markets. We seek to AND MARINE BIODIVERSITY improve inland connectivity, including in landlocked countries, by investing in cross-border transport Our constant efforts to minimise our environmental impact solutions, logistics services, storage facilities and trans- and carbon footprint include our participation in sever- port infrastructure, in partnership with public and private al local and international initiatives and partnerships to stakeholders. In line with our people-centred approach, promote the protection of wildlife and marine biodiversity. our training programmes are an essential element of In 2017, MSC reiterated its strong commitment to the our investment strategy, as illustrated by the recently United for Wildlife Buckingham Palace Declaration, approved MSC Academy project to be launched in 2018. which aims to combat the illegal trade in endangered This will promote the alignment between business goals animals by breaking the transportation link between and people-related objectives by focusing on key areas suppliers and buyers. such as people development, learning programmes and internal mobility. The departments of MSC HQ have also enhanced their collaboration to improve and harmonise existing practices and procedures throughout the organ- isation. The global harmonisation process is intended to assist our subsidiaries and branch offices worldwide to further align their ongoing strategies and country-specific or region-specific corporate social initiatives with the company’s overall sustainability strategy promoted at the HQ level. 12 MATERIALITY ASSESSMENT & STAKEHOLDERS
Marevivo
We have also further strengthened our long-term
partnership with Marevivo, an Italian marine conserv
ation association founded in 1985 that works worldwide,
supported by a scientific commission, legal commission,
territorial delegations, a diving division and an extensive
network of volunteers and members. Recently, Marevivo’s
advocacy efforts led to the Italian government’s decision
to pass legislation banning microplastics from cosmetics
by 2020 and removing plastics from cotton swabs by 2019.
Since 2015, MSC Cruises and Marevivo have joined
forces to increase environmental awareness among
young people. Educational programmes include topics
such as marine biodiversity, sustainable development
and restoration of marine protected areas, as well as
combatting pollution and illegal fishing.
In 2017 Marevivo and MSC worked on three projects:
• The ‘Guardian Dolphins’ youth programme is an initi-
ative implemented in primary schools on ten Italian
islands, which aims at fostering greater aware-
ness about the conservation of marine resources.
Key impact: 700 students; 60 teachers, operators and
experts; 19 schools; 1,400 adults in ten minor Italian
islands (Eolie, Egadi, La Maddalena, Palau)
• Nauticinblu, an educational programme targeting
future seafarers focused on the incorporation of
environmental conservation and marine sustain-
ability in Italian naval academies’ curricula.
Key impact: three maritime academies: San Giorgio
in Genoa, Volterra-Elia in Ancona and Nino Bixio in
Sorrento; 210 students (70 per institute), 30 teachers.
• #Mybluewave Experience on sustainable develop-
ment. This project includes on-board activities during
cruises, ranging from “edutainment” games to learn-
ing moments and species-sighting activities to educate
children about the environment in which cruise ships sail.
Key impact: in 2017, 200,000 children participated in the
activities dedicated to the sea on board MSC Cruises’
ships.
MSC SUSTAINABILITY REPORT 2017 13MSC Headquarters, Geneva, Switzerland 14 MATERIALITY ASSESSMENT & STAKEHOLDERS
HEALTH BUSINESS ETHICS
AND SAFETY AND PROTECTION OF HUMAN RIGHTS
MSC considers occupational health and safety a funda- Finally, it is MSC’s objective to conduct its business
mental material topic. In this respect, we promote activities in a responsible and ethical manner. We
personal, environmental and navigational safety in line support the UN Global Compact’s principles-based
with SDGs 3, 8 and 14, applicable international quality approach in the areas of human rights, labour, environ-
shipping regulations and other relevant international ment and anti-corruption, promoting a culture of
instruments. One more area of concern relates to proper integrity throughout the organisation and within our
cargo-handling and management. sphere of influence.
In the last ten years, we have increased our offer of Furthermore, in accordance with SDG 16, we actively
training programmes in soft and technical skills to engage with other companies and international stake-
further promote a culture of safety among our crew holders to advance collective actions aimed at fighting
members and ensure rapid response capabilities in bribery and corruption. We also participate in the discus-
case of emergencies and unexpected events, especially sions of the International Chamber of Commerce Business
natural disasters. Action to Stop Counterfeiting and Piracy (BASCAP).
Our ship recycling practice is another important area As part of our commitment to the protection of human
of emphasis for MSC, as it is strictly related to labour rights, MSC strives to provide its employees with a safe
standards, environmental protection and human rights, working environment, offering stable financial revenues
in accordance with SDGs 8 and 12. We strive to ensure through long-term career paths. In line with SDGs 1, 5
that the recycling of materials and other ship compo- and 10, MSC also focuses on women’s empowerment
nents is performed at yards without any unnecessary by promoting the elimination of gender disparities in
risk to human health, safety or the environment. Our employment, both on board and offshore, and by invest-
responsible practices are fully supported by MSC top ing in technical and managerial training for women.
management and only recycling yards with IMO HKC We promote local recruitment wherever we operate, yet
standards, ISO 14001 (environment), ISO 30001 (ship our commitment to bringing value to local commun
recycling management) and OSHAS 18001 (Health & ities goes far beyond compliance. Following SDGs 1,
Safety) standards are selected for recycling at the end 2, 3 and 16, we seek to contribute to peace-building
of the useful life of a ship. efforts deployed by international actors on the ground,
by contributing to humanitarian relief actions, including
for victims of natural disasters. Whenever possible, we
transport emergency humanitarian aid cargoes to areas
of conflict, within the framework of international regula-
tions and international humanitarian laws.
MSC SUSTAINABILITY REPORT 2017 15MEDLOG employees in San Pedro, Côte d’Ivoire 16 SOCIAL INCLUSIVE APPROACH
CREATING SUSTAINABLE VALUE SOCIAL INCLUSIVE APPROACH MSC SUSTAINABILITY REPORT 2017 17
ADAPTING BUSINESS STRATEGIES effectively integrate and benefit from global supply
TO GLOBAL SOCIAL TRENDS chains. We are therefore promoting the realisation of
the 2030 Agenda for Sustainable Development, and
Being a global player in the international shipping sector its wide range of interrelated SDGs, by building solid,
with 70,000 employees and operations all over the world, enduring partnerships with all of our customers and
we are committed to ensuring a positive social impact stakeholders. For MSC, loyalty and continuity, together
wherever we operate, while promoting the sustainable with our long-term financial investments and invest-
use of oceans, seas and marine resources. ment in people, are essential elements to achieve
In all our strategies and business models, we strive to sustainable development.
create conditions for increased prosperity and wealth
both on land and at sea, despite the challenges of a
highly competitive market. Yet, new developments CREATING JOBS FOR
currently affecting transport and trade are influencing A FAST-GROWING POPULATION
sustainability considerations in our sector, and freight
transport systems and patterns in general. Therefore, The United Nations Department of Economic and Social
for us, understanding ongoing as well as future global Affairs (UN DESA) 2017 Revision of World Population
and local challenges is a must in today’s changing world. Prospects foresees a dramatic increase of world popula-
We are proud to continuously seek to transform those tion from today’s 7.6 billion to 8.6 billion in 2030. This
challenges into opportunities through our inclusive, trend is expected to bring new challenges with regards
sustainable and long-term investment strategies. In to domestic labour markets, levels of inequality and
this respect, we continue to promote local recruitment, supply chains, on both a local and global scale. Those
multi-cultural working opportunities and the develop- challenges might be exacerbated in developing and least
ment of ocean-based and shipping-related industries all developed countries, if economic growth will not create
over the world. As a global service provider, we care sufficient jobs to match the demand of a young popula-
about our customers and their cargo. This means that we tion and a growing labour force. In this respect, our
do not forget that our customers and business partners approach will continue to focus on supporting govern-
also have responsibilities towards their own customers ments to address poverty and unemployment rates
and consumers. through the promotion of decent work opportunities for
Our transportation solutions are commercially all segment of the population, without discrimination.
viable, environmentally friendly and comply with We will also further invest in programmes and training
the highest health and safety standards. We work aimed at improving the soft and technical skills of our
in partnership with governments, business partners employees all around the world, to enhance our contri-
and other relevant stakeholders to increase local bution to inclusive capacity-building efforts.
trade competitiveness and countries’ ability to
18 SOCIAL INCLUSIVE APPROACHMEDLOG
employee,
San Pedro,
Côte d’Ivoire
A GLOBAL BUSINESS
WITH A LOCAL APPROACH
We pride ourselves on our ability to adapt business expectations of workers as well as the way we benefit
solutions to the local needs of communities, n ational from the use of new technologies. In this respect, in
authorities and other stakeholders. With 480 offices line with our social inclusive approach, our investment
across 155 countries, our customers can rely on our in innovation promotes the safety and expertise of our
in-depth understanding of the local markets, the dynam- employees, not their replacement. We continuously
ics of specific trades and any factors affecting the transit encourage e-learning, especially among women, and
of cargoes. Our approach supports our focus on invest- support employee mobility and the diversification of
ing responsibly in each country of operation, including career paths. While digital connectivity can provide
in least developing countries and emerging markets, new opportunities for countries to increase domestic
promoting business models, services and operational growth and enter the global economy, traditional trade
activities tailored to ongoing and future local and global costs related to physical connectivity can still represent
challenges. These include today’s digital and technologi- a significant barrier for the delivering of goods. This is
cal developments and their impact on transforming jobs why our strategic focus will also remain on increasing
and trade patterns. our global logistics network and promoting connec-
We must acknowledge that globalisation and digital- tivity among populations and countries in line with
isation have played a role in modifying the social national strategies and country-specific needs.
MSC SUSTAINABILITY REPORT 2017 19CASE STUDY
AFRICA
OUR COMMITMENT
TO AFRICA’S SOCIAL
INCLUSIVE DEVELOPMENT
MSC continues to support a holistic and long-term social
Lomé Container inclusive approach within the African continent. Since
Terminal, Togo the launch of our first route between the Mediterranean
and East Africa in 1971, we have invested extensively in
local recruitment, transport services and infrastructure
to bring inclusive economic and social development and
global trade opportunities to local players. Today, our
local MSC agencies serve 40 African countries, helping
to enhance their role and potential in the global econo-
my. Our liner services, calling at 60 ports every week
and at port terminals in Togo, Côte d’Ivoire, Nigeria and
Morocco, ensure connections between Africa and the
rest of the world. We also invest and manage state-of-
the-art terminals, which, working in collaboration with
our logistics teams, can take any cargo to any location.
Our overall market share, currently at around 21%,
continues to grow significantly year on year, showing
our full support for the development of the continent’s
future.
20 SOCIAL INCLUSIVE APPROACHFacilitating maritime trade of sustainable development. Positive trends, such as
to tackle food insecurity the development of local industries and the agricul-
The MSC’s strategic choice to invest in Africa’s devel- ture sector, can certainly support Africa’s growth in
opment aligns with the increasing commitment of most the long term. In this respect, there is no doubt that
African countries to foster trade exchanges within the the private sector, and especially the shipping sector
continent and beyond, also through the promotion of and its supply chain, has an important role to play in
the maritime economy. In particular, we appreciate the addressing some of the obstacles that prevent local
recent efforts put forward of several African countries African products from reaching more lucrative global
that led to the adoption in 2016 of the Charte de Lomé markets or meeting food insecurity challenges. MSC
and the expected implementation of a Continental Free will therefore enhance its network of storage facilities,
Trade Area (CFTA). further increase its offer of an integrated network of
The benefits of a free and efficient flow of goods and inland and cross-border transportation solutions and
trade extend far beyond the ships and ports themselves. support cold chain development throughout the conti-
An effective interface between them can improve the nent, in line with its commitment to the promotion of
lives of people everywhere, especially in the context the SDGs.
Trucking services
connecting remote areas
and landlocked countries
MSC SUSTAINABILITY REPORT 2017 21MSC Daniela (built 2008), 14,000 TEU. Terminal of Valencia, Spain 22 SOCIAL INCLUSIVE APPROACH
Investing in infrastructure in recent years we have reinforced our commitment
to improve connections to Africa through dialogue and partnerships with key
West African ports are currently enjoying an ongoing stakeholders at a national and international level.
positive trend of expansion, modernisation and intermodal Nevertheless, challenges for the business communi-
transportation linkages. We observe a continuing rise in ty remain, as structural projects, such as infrastructure
infrastructure investment from both the private and public projects, and private investments need to be support-
sectors to link all capitals by road, high-speed rail and air. ed by key reforms on good governance and innovative
This constitutes a positive outlook for growth, as infra- financial guarantees to become sustainable in the long
structural development is essential for enhancing African term. Yet, we are confident that ongoing global efforts
countries’ competitiveness, facilitating trade and achiev- and initiatives will continue to address current barriers
ing sustainable development. to further investments from the private sector. These
Our investments will continue to focus on terminals initiatives include the G20 Compact with Africa, which
and related infrastructure, as well as on developing a is supported by African governments, the internation-
sustainable and integrated transport network, including al community and Multilateral Development Banks
in landlocked countries (LLCs). This will further facilitate (MDBs).
the transport of goods and services across and between
African countries, including between urban and rural/
remote areas, as well as from the African continent to the
global market. As an illustration, in 2018 we plan to launch
in Le Havre ro-ro operations from Europe to West Africa,
which will complement our existing dedicated contain-
er services.
Engaging stakeholders to overcome
common challenges We have reinforced
The African Union launched a depth transformation
across the continent to further promote local produc-
our commitment
tivity and long-term economic growth. We observe a to Africa’s
new paradigm shift that encourages the participation of
the private sector in strategic plans to foster sustainable
development
development in Africa. To this end, structural changes through enhanced
have been considered as necessary and the dialogue
between the public and private sectors has been
partnerships with
enhanced and revitalised to ensure that local needs, key stakeholders
as well as ongoing and future global challenges and
broad development issues facing African countries, are
at a national and
taken into account in business models. In this respect, international level.
MSC SUSTAINABILITY REPORT 2017 23CASE STUDY
LANDLOCKED
COUNTRIES
UNLOCKING THE
GROWTH POTENTIAL
In the past 45 years, MSC’s logistics arm, MEDLOG, MSC and MEDLOG have jointly provided door-to-door
through its subsidiaries, has invested heavily in the logistics solutions to local branches of internation-
development of inland infrastructures and the creation al automotive companies for the delivery of knocked
of corridors by using and improving existing logistics down vehicles from South Africa to assembly plants
resources all around the globe. in Rwanda.
As an illustration, thanks to more than 550 dedicated Moreover, MEDLOG has supported the improvement
trucks, about 50 lifting equipment units, 15 warehouses of Rwanda’s overall infrastructure by transporting
and a presence in 23 African countries, MEDLOG has bitumen containers to Kigali for building a new inter-
built up an integrated network of road and rail solutions national airport, which will foster incoming tourism and
to connect landlocked countries (LLCs) and remote areas air freight flows.
to ports. The services provided have helped to support In West Africa, MEDLOG is also offering crucial logistics
the development of logistics-related services, enhancing solutions for the refurbishment of Gao Airport in Mali
employment opportunities and local economic growth. by ensuring that specific bitumen containers reach Gao
We have also improved food supply and socio-political after being discharged in the port of Cotonou (Benin).
stability in collaboration with the International Committee Similarly, in Niger we participated in projects relating
of the Red Cross (ICRC). Furthermore, we have contrib- to the construction of a new national road connecting
uted to local operations and programmes promoted by Tchadoua and Mayahi.
the United Nations in a number of countries, such as MEDLOG’s assets in Côte d’Ivoire and Senegal (trucks,
South Sudan, Mali, Cameroon, Togo and Central African trailers, advanced methods for storage, conditioning
Republic. and containers’ preparation) guarantee that agricultur-
In East Africa, the MEDLOG network ensures that coffee al products are stored in the best possible conditions
exports from landlocked Burundi, Rwanda and Uganda before their intermodal shipment to or from landlocked
reach the rest of the continent and the world. In addition, Burkina Faso and Mali. MEDLOG dry port in Mali offers
a flexible option to local importers.
24 SOCIAL INCLUSIVE APPROACHTerminal of
San Pedro,
Côte d’Ivoire
MSC SUSTAINABILITY REPORT 2017 25ASE STUDY
OODCASE
LOGISTICS
STUDY
REDUCING POVERTY
THROUGH FOOD LOGISTICS
NVESTING IN TECHNOLOGY
O FOSTER RESPONSIBLE
ONSUMPTION
As stressed by the former UN Secretary-General Yet, we should not forget that it is only at the end of the
Ban Ki Moon1, “everybody in the world benefits from 1960 that the shipment of “cold” food was made possi-
shipping, yet few people realize it. We ship food, ble thanks to self-refrigerated containers (“reefers”).
technology, medicines and memories. As the world’s This made possible more trade opportunities, flexibility
lusive economic
populationdevelopment reliesparticularly
continues to grow, upon sustain- In line
in develop- andwith MSC’sfor
profitability holistic and social-inclusive
many, compared to the limitationap-
of
e consumption, production and recycling of goods proach, our intention is to keep investing in the latest
ing countries, low-cost and efficient maritime transport the refrigerated ships which were mainly used to trans-
has an
d resources asessential
set outrole
bytoSDG
play in
12.growth
Among and other
sustainable port meat, systems,
technologies, dairy products and fruits.
processes and all other ele-
development.” The shipping sector, and in particular Today,
uses, food loss in developing countries is closely ments of the cold chain over thenew technologies such as the
next yearsControlled
to make
the container shipping industry, develops and sustains Atmosphere system and Cold Treatment allow the
ated to non-trade barriers, ultimately impacting sure that, on the one hand, our customers are offered
worldwide trade. Thanks to a specialised labour force reefer container to meet the highest safety and quali-
e incomes of small farmers and food prices in local the best transport and storage conditions to their per-
that works tirelessly day and night both at land and ty standards when transporting all types of “cold”
arkets. Reducing food loss is one way to limit the ishable cargos and, on the other hand, intermediate
at sea, the whole sector helps to alleviate poverty by commodities all over the world. The shelf life of exotic
gative effects of such barriers
decreasing the price and to address
of commodities whilefood and final
enhancing consumers
and fresh productsgain access which
is increased, to best quality
enables food.
shipping
curity issues affecting
economic and a largegrowth
social proportion ofas
as well the pop- The
standards of expected
companiesincrease in the
to enter new global
markets food
and demand
reach consumerswill
tion, especially in least
living in both developed
developed economies.
and developing countries. pose innew major
every challenges
country. that we want
This is instrumental to take on:
in facilitating the
MSC weInbelieve
the lastthat cold chains,
decades, i.e. supply chains
the transportation of goods the
in first one isofproviding
transport every type global
of food food supplyincluding
everywhere, with ef-
containers has
at are refrigerated fromchanged our lives
beginning dramatically.
to end, and cool- Flexible remote
ficient areas,
logistic and in unlocking
solutions to reachopportunities for small
a growing demand,
and quick to move, the container opened new avenues players, such as farmers
g technology can make a dramatic difference in in- mainly coming from emerging economies: this can be and growers.
and continues to help meet the world’s growing In this respect, MSC has contributed tremendously to
asing the supply of quality food and in reducing achieved by further expanding our container fleet and
demand for goods and food. Almost everything we the development of the world’s maritime network and
st-harvest food loss, including wasted water, ener- shipping services; the second challenge is tackling
buy, eat, use and consume every day is transported to inclusive growth around the globe, for example by
land and labour. For this reason, in recent years we food loss issue affecting most developing countries
by sea, so all countries and populations in the world increasing its investments in self-refrigerated contain-
ve massively
rely oninvested
maritime in improving our own cold by further
trade. investing
ers along with coldin and employing
storage food-related
warehouses, related
atment supply chain – i.e. refrigerated containers, and cooling technologies.
1
UN Secretary-General Ban Ki moon’s message
rehouses and depots - to ensure the best logistic
on World Maritime Day, 29 September 2016
d treatment services to our customers.
26 SOCIAL INCLUSIVE APPROACHlogistics equipment and services, through its subsidi- specific trade was accessible mainly by big players with
ary MEDLOG. MSC also operates one of the youngest, high volumes to trade. Additionally, the reefers support
largest and most environmentally friendly reefer fleets economies of scale, as fresh commodities can reach
in the world and complies with all relevant interna- different trade areas, securing food supply availability
tional rules related to freight containers, road and rail regardless of the season. This means that, in the event of
transportation. low local market demand, it helps to prevent food waste
and the destruction of excess production as commodities
Creating new opportunities for small farmers can be traded in other regions of the world.
Through our wide-scale operations, our worldwide local As an illustration, in Spain, our investments and strategic
agencies network provides our customers and business collaborations with small farmers helped to boost export
partners with specialised reefer services tailored to their rates of dairy products, fruit and vegetables to alternative
needs, whenever and wherever required. Backed by deep markets. Additionally, through our “Reefer Mediterranean
knowledge of post-harvest treatments, we have been Project “, as well as in Asia and the Middle East, we offer
targeting, in coordination with farmers and growers, the local actors broader trade options through our global
expansion of their business through new opportunities. network, providing them with better return on revenue.
The reefer container can quickly adapt to different capac- At the same time, we offer accessible, sustainable forms of
ity demands without requiring high levels of minimum protection, such as ad hoc insurance policies, to minimise
inducement to start and stay in business. This factor risks and to encourage small farmers to invest in more
enabled its usage by small players, while in the past this ambitious and inclusive business models.
MSC Reefer
Services in
Ecuador
MSC SUSTAINABILITY REPORT 2017 27Fostering responsible consumption emissions of F-gases are rising fast, the European Union
and food safety passed an updated F-Gas Regulation in 2014 limiting their
Sustainable development also relies upon sustainable sale and banning their use in refrigeration systems if
consumption. According to the United Nations Food and more environmentally friendly alternatives are available.
Agriculture Organization (FAO) “hunger is still one of The ban will apply to commercial refrigeration systems,
the most urgent development challenges1”, yet “rough- such as reefer containers, from 2020. At an internation-
ly one third of the food produced in the world for human al level, the Kigali Amendment to the Montreal Protocol
consumption – approximately 1.3 billion tons – is lost or will enter into force on 1 January 2019 with the aim of
wasted before reaching consumers2”. Food waste and reducing worldwide production and consumption of
poor food conservation practices are strictly interrelat- hydrofluorocarbons (HFCs), the main type of F-gas used
ed to poverty, as they have an impact on food prices in in refrigeration technology. Partly caused by the stricter
local markets and on the incomes of small farmers, while regulations, significant increases in the prices of refrig-
also creating barriers for people to access quality food. erants are raising additional challenges.
Additionally, they might contribute to the increase of Nevertheless, we have started to make necessary invest-
malnutrition cases around the world, as they bring further ments in order to comply with the new regulations.
challenges to the poorest households and vulnerable Additionally, we have purchased thousands of new
groups in affording adequate food and in implementing Carrier Transicold NaturaLINE® reefer containers with
healthy habits and nutrition practices. natural-refrigerant R-744 (CO2) which is now the best
At MSC we believe that cold chains and cooling technol- available technology compared to other refrigerants.
ogy can make a dramatic difference in enhancing the
supply of quality food and reducing post-harvest food
loss, including losses related to water, energy, land
and labour. By increasing the supply and affordability
of quality food, reliable cold chains can play a key role
in reducing poverty, fostering responsible consump-
tion and promoting the right to health as set out by the COOLING TECHNOLOGIES
SDGs. In this respect, we continue investing exten- AND PROTOCOLS
sively in the latest available technologies, systems and
By controlling oxygen and carbon dioxide levels and
processes for sustainable cold chains, in line with inter-
removing the ripening hormone ethylene, our Controlled
national standards and regulations as well as our care
Atmosphere systems prevent premature ripening and
for the environment. This also ensures that our custom-
reduce deterioration and spoilage. In addition, they
ers are offered the best transportation and cold storage
maintain the appearance, freshness and quality of
conditions for their perishable cargoes, and provides the
perishable foods over longer distances.
highest level of food safety and quality to final consumers.
In-transit Cold Treatment protocols are a chemical-free
way to eliminate fruit flies and other insects that might
Caring for the environment with sustainable
damage the biodiversity and agricultural industries
cold chain technology
of importing countries. Our cooling and monitoring
Regulations limiting ozone-depleting substances
systems allow us to reliably keep the pulp of the fruit at
(ODS), notably the Montreal Protocol of 1987, led to the
the required temperature for the exposure period speci-
widespread use of fluorinated gases (F-gases) in many
fied in the protocols, which vary depending on the fruit
industrial sectors. These man-made gases have a high
and importing country.
Global Warming Potential (GWP), ranging from about
12 to 14,800 times greater than carbon dioxide (CO2). As
1
Source: http://www.fao.org
2
Source: http://www.fao.org/save-food/resources/keyfindings/en/
28 SOCIAL INCLUSIVE APPROACHMSC Reefer Services
CARRIER TRANSICOLD NATURALINE® REEFER CONTAINER
The GWP=1, R-744 (CO2) refrigerant polyurethane foam blowing agent
will enable us to avoid using inter- technology used in the NaturaLINE®
mediate refrigerant solutions that will unit offers high insulation properties
need to be phased out in any case without contributing to GWP.
within the 15-year lifespan of the When the NaturaLINE® unit reaches
units. the end of its useful service life, it
The NaturaLINE® reefer’s outstanding is nearly entirely recyclable. Its 95%
energy efficiency can reduce recyclability rate has been attest-
shipboard demand for electricity, ed by the Underwriters Laboratories
thus conserving fuel and reducing (UL), the largest and best-known
emissions related to power gener- independent, not-for-profit testing
ation. Moreover, the zero-GWP laboratory in the world.
MSC SUSTAINABILITY REPORT 2017 29REEFER CARGO OVER TIME
1876 1877 1879 1882 1902 Early
1960’s
A plant was The first suc- The Anchor Refrigerated deep Lloyd’s Register Shipping lines
installed in a cessful shipment liner Circassia, sea shipping recorded 460 developed insu-
sailing ship, but of meat under equipped with takes off with the ships with refri- lated containers
it was a failure. chemical refri a cold s torage first successful gerating plants, commonly known
geration was machine, attempt to carry mostly transport as ‘porthole
carried by the successfully car- frozen meat from ing meat, butter containers’.
S.S. Paraguay ried chilled meat Buenos Aires to and fruit.
from Buenos from America to Marseille.
30 SOCIAL INCLUSIVE APPROACH
Aires to Rouen. Europe.
Source: Drewry Reefer Shipping
Market Review and Forecast 2016/2017
30 SOCIAL INCLUSIVE APPROACHMSC reefer
containers at
the terminal of
Valencia, Spain
Early Late Early 2000 2016 2020
1960’s 1960’s 1970’s
Multi-temperature The first refri- The first reefers Seaborne reefer Seaborne reefer Seaborne reefer
reefer ships intro- gerated marine with integrated trade reaches trade rises to 111 trade estimated
duced, capable containers were cooling units 60 million tonnes. million tonnes. to reach 120
of transporting developed, based came to life. million tonnes
different types of on converted with a 2.5%
commodities at truck units. Reefer annual growth
the same time. containers fol- rate.
lowed, each with
its own cooling
unit and temper
ature control
system, bringing
unprecedented
flexibility and
profitability.
MSC SUSTAINABILITY REPORT 2017 31MSC Laurence (built 2011), 12,400 TEU. Terminal of Seattle, Washington (USA) 32 MSC’S COMMITMENT TO THE ENVIRONMENT
CREATING SUSTAINABLE VALUE
MSC’S
COMMITMENT
TO THE
ENVIRONMENT
MSC SUSTAINABILITY REPORT 2017 33MSC vessel at
the Terminal
of Valencia, Spain
PROTECTING OUR PLANET:
A GLOBAL CHALLENGE
The adverse impacts of climate change have become
more evident in recent decades and are increasing-
ly affecting our planet and all human beings globally.
According to the Office of the High Commissioner for
Human Rights (OHCHR), climate change disproportion-
ately affects vulnerable people and communities already
in disadvantaged situations due to various factors.
Tackling climate change challenges is therefore at the
top of the international community’s agenda.
With the signing in 2015 of the Paris Agreement,
countries have agreed that temperature rises should
be limited to no more than 2C above pre-industrial levels
and that this will urgently require a global response
from all stakeholders. Although the shipping sector
is recognised as the world’s most cost-effective and
energy efficient mass transportation method, account-
able for only around 2.5% of global carbon emissions,
it is subject to a challenging new set of technical and
operational measures to further reduce emissions, as
per international regulatory requirements.
The shipping sector has been affected by weaker global
demand since 2009. In spite of this, the internation-
al community predicts greater seaborne trade due to
the estimated growth of national GDPs as well as the
growth of economic and population trends towards 2050.
As a consequence, shipping emissions are expected to
increase between 50% and 250% by 2050 if no measures
are taken to mitigate climate change. At the same time,
maritime transport’s outlook continues to be shaped and
affected by uncertainty, increasingly challenging market
conditions, fluctuant oil prices and global socio-economic
factors and trade policies. The whole sector is therefore
under pressure to address ongoing and future challenges,
including increasing financial challenges, and to secure
sustainable solutions while remaining competitive in the
global market. MSC is investing heavily in a number of
technical solutions to meet or exceed the new regula-
tions, finding innovative solutions and continuously
improving its environmental performance.
34 MSC’S COMMITMENT TO THE ENVIRONMENTHOW SHIPPING COMPARES Source: 3rd IMO
WITH OTHER TRANSPORT METHODS GHG Study 2014
CO2 emissions by mode of transportation, CO2 g/km
Air: 560 g Road: 45 g Rail: 18 g Sea: 3 g
MSC SUSTAINABILITY REPORT 2017 35OUR STRATEGY FOR CLIMATE CHANGE
& ENVIRONMENTAL SUSTAINABILITY
MSC’s environmental strategy and approach to sustain- fuel consumption and therefore improve our energy
ability demonstrate a clear commitment to running a efficiency.
responsible business while respecting the environment We continuously monitor our environmental perfor-
and embracing precautionary efforts to mitigate broad mance and have implemented a number of operational
global climate change impacts. measures to further reduce our CO2 emissions to meet
To achieve its vision, MSC promotes a strategic focus expected new regulations, including those to be adopt-
on cleaner seas, land and cargo through massive invest- ed by the International Maritime Organization (IMO).
ments in innovative low-carbon technology, energy Our overall strategy involves an investment of approx-
efficiency and operational efficiency. Additionally, MSC’s imately USD 1.5 billion. This enormous financial
modern, green fleet was greatly enhanced in recent years commitment was made possible by MSC’s growing
by a retrofitting programme. We have invested extensive- and stable economic performance as well as by the
ly in the latest generation of marine technologies, such continuous support of key financial institutions.
as new energy-efficient propellers and bows to reduce
REGULATION AIM & ENTRY INTO FORCE MSC’S RESPONSE
IMO 2020 enhanced global Enhances existing limits for sulphur Installation of Exhaust Gas Cleaning
sulphur limit (MARPOL Annex VI, content in marine fuel to reduce Systems (ECGS); evolving fuel strat-
regulation 14) emissions of sulphur oxides and other egy including use of Low Sulphur
pollutants. Entry into force: 1 Jan 2020. Fuel Oil (LSFO); advocating for shore
power supply.
IMO Ballast Water Management Sets standards for proper manage- Installation of advanced ballast water
Convention ment of ballast water and sediments to treatment systems across entire fleet.
prevent the spread of harmful marine Newbuilds designed to need minimal
species. Entry into force: 8 Sep 2017. ballast water.
IMO Energy Efficiency Design Index Specifies a minimum efficiency level All newbuildings meet or exceed
(EEDI) (MARPOL Annex VI, per capacity mile according to ship EEDI standards; continuous invest-
regulation 4) type and size, for ships 400 GT or over. ment in latest technologies to raise
Entry into force: 1 Jan 2013. energy efficiency performance.
IMO Data Collection System (DCS) Requires collection of fuel consump- Advanced data acquisition and
tion data for ships 5,000 GT or over as analytical software developed
part of the mandatory Ship Energy Ef- in-house and installed across fleet.
ficiency Management Plan. Entry into
force: 1 Mar 2018 for data collection
from 1 Jan 2019.
EU Monitoring, Reporting & Requires collection of CO2 emissions Advanced data acquisition and
Verification (MRV) data for ships over 5,000 GT calling at analytical software developed
EU/EFTA ports. Entry into force: in-house and installed across fleet.
1 Jul 2015 for data collection from
1 Jan 2018.
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