M3 Assignment

Identify at least two climate-related risks that are relevant to the business described in your case study. Describe why these risks are relevant and how the company could benefit from measuring and disclosing them to investors and the public.

For Sayle Dockyards the biggest climate related risk is that ships being built today will be obsolete by the time they are seaworthy. Assuming the company builds a combination of Bulkers, Tankers, and Gas Carriers that require many years to complete, as the pace at which international shipping regulations are progressing, stringent emission requirements may render existing productions obsolete or stranded as demand for fossil fuels decline and with it, demand for their international transport.  Secondly, the company is at risk of facing legal challenge should it continue to use or produce polluting ships.  In the landmark ruling in the Hague in 2021, Milieudefensie v Shell, it was held that Shell was required to limit its CO2 emissions by at least 45% by the end of 2030 relative to 2019.  This has the effect that Shell needs to start complying immediately, even if appeal was expected. As such, Sayle Dockyards would benefit from measuring and disclosing the emission status of their current fleet so that investors and the public knows their strategy for preventing stranded assets and activist litigation. And leadership at the board level is able to plan, implement, and monitor a clear transition future worthy strategy.

2. Consider the value of reporting mechanisms such as the GHG Protocol Corporate Accounting and Reporting Standard or the Task Force for Climate-related Financial Disclosure (TCFD). How could the business in your case study ensure that effective reporting and planning measures are implemented? (Max. 150 words)

Depending on where Sayle Dockyards (SD) is at on the ladder of eco-enlightenment, the TCFD and the GHG Protocol are helpful tools to aid reporting and planning.  Being a widely used framework adopted by many stock exchanges world-wide these reporting mechanics are a suitable communication structure for a broad audience of international financiers and demonstrate competence of the company with Board lead determination to change. The GHG Protocol Corporate Standard is especially helpful for quantifying Scope 3 emissions, which for ships that gets bought and taken apart and sold or leased out again may prove to be a useful calculator for emissions upstream or downstream. 

To ensure effective implementation however, one strategy is to tie senior management bonuses or other income incentive to Emission Reduction KPI and how effective SD has been to achieve the targets that have been set.  The Board Remuneration committee and Risk committee should monitor and ensure the metrics are achievable, ambitious and authentic. 

3. A long-term net zero reduction target is essential for securing the future value and competitiveness of any business.
How could the business in your case study set and monitor its progress towards the net zero target, and how could this benefit it during the transition? (Max. 200 words)

In your answer, identify:

  • at least one tool or framework relevant to your case study (eg the Corporate Accounting and Reporting Standard, the SBTi Net Zero Standard, carbon budgeting or the TCFD)
  • one commercial advantage associated with implementing this tool or framework.

Having identified the most material risks and opportunities for SD in a Net-Zero economy, leadership at the board level should put in place a plan for short, medium and long term emission reduction. The TDFC recommendations use governance, strategy, risk management, and metrics and targets to breakdown the four areas of disclosures. 

With board committees and management leadership in place, SD would benefit from a robust risk assessment set of tools and a long term vision for the company’s sustainable future.  SD should use TCFD recommendations for enterprise planning, consistent measurement, and transparent reporting to inform its stakeholders. An important step is also to identify its core stakeholders and allowing the board and management to understand how creating a win-win scenario for SD and the planet can create impact and make manifest a successful implementation. The various shipyards, brokers, customers, seafarers/crew, ports are all part of an industry which operates on a long product life cycle and highly vulnerable to shifts in global geopolitics. Switching to more efficient ships, employing fleet management technology, and exploration of renewable fuel sources presents a long-term commercial opportunity that begins with training its existing staff, recruiting new cadets, capacity building and forging new partnerships. Adoption of such a long term view of its business will certainly allow SD to demonstrate industry leadership and attract like-minded investors.

References:

Science Based Targets. 2018 https://sciencebasedtargets.org/resources/legacy/2018/05/SBT-transport-guidance-Final.pdf

Kitack Lim, Secretary-General, IMO, Shaping the Future of Shipping Conference 2021. https://www.imo.org/en/MediaCentre/SecretaryGeneral/Pages/ICS-Shaping-the-future-of-shipping-conference.aspx

International Chamber of Shipping. 2 September 2022 https://www.ics-shipping.org/news-item/could-40-of-global-containership-traffic-be-fully-battery-powered-by-2030/

Willis Towers Watson. https://www.wtwco.com/en-ZA/Insights/2020/02/7-issues-facing-the-shipping-industry-in-the-new-decade

H Chao, August 2022. Venture Forward Volume 9. https://www.wahkwong.com.hk/news/attachments/20220805193256.pdf

How humans store value
the history of money and why it matters to everyday citizens The …
Protected: Pickleball Now!
https://www.youtube.com/watch?v=IwwgQdhYgFo Setting-up-Pickleball-Macau-and-its-subsidiary-Asian-Pickleball-Tournament-Events-LtdDownload
Sports Asset Management
Sports asset management companies engage in a variety of profit-making activities aimed …
Invest AI
投資者對人工智慧 (AI) 的熱情推動美國股市在 2024 年初創下多個歷史新高。人工智慧相關股票,尤其是大型股的強勁表現,讓一些市場觀察人士質疑,這是否類似於2000年破裂的互聯網泡沫。 我們仍然將人工智慧視為近代史上最具革命性的技術進步之一,這是一個多年的機遇。它才剛剛開始出現在公司的底線中。 自去年以來發生了很多事情,因此我們正在總結我們目前對人工智慧股票的看法,以及該技術可能採取的下一步行動和全球人工智慧的前景。 我們強調,人工智慧必須被視為一種全球現象,我們不建議只投資美國公司。我們還認為,至關重要的是,想要購買人工智慧的投資者必須確保投資組合能夠接觸到從基礎設施到軟體和人工智慧應用的整個人工智慧價值鏈中的公司。我們看到了該技術的“推動者”和“採用者”的潛在機會。 又大又閃亮?是的。泡沫?不。 人工智慧股票正在上漲,因為投資者一直在對技術需求處於長期增長期開始的跡象做出反應。自 2023 年初以來,人工智慧相關股票的回報率比美國和全球指數高出 …