Diversity, equity and inclusion

We also updated the impact study of our investments and activities in Alang. The study covers 14 vessels recycled between 2017 and 2021, as well as our access to health efforts in the wider Alang community. See the table on p. 33.

The mobile health unit, which we have supported since 2018 to improve healthcare access in the wider Alang area, provided nearly 15,400 health visits and 1,050 laboratory tests in 2021. The training programme, supported since 2019, raised awareness on hygiene, substance abuse and sexually transmitted diseases continued, and to address the evolving needs of the community, an additional training module on material handling and ergonomics was introduced and skin camps organised.

Regulatory landscape: still challenging

During 2021, the regulatory landscape for ship recycling changed as some gaps in the EU Ship Recycling Regulation were closed. However, challenges remain and pose a risk to having the right solutions ready in time. What was reconciled in 2021 was the uncertainty related to the effect of the 2019 entry into force of the Basel Convention on export of hazardous waste. Were it to supersede the EU Ship Recycling Regulation, this could effectively hinder nonOECD countries such as India from offering to recycle ships coming from OECD countries. The new EU Waste Shipment Regulation (which implements the Basel Convention) was published end-November 2021 and proposes that the EU Ship Recycling Regulation will take precedence when it comes to European flagged vessels, and to amend the EU regulation accordingly11. This means that yards in non-OECD countries will remain eligible for inclusion on the EU's list of approved recycling facilities, provided these can meet the requirements stated.

Creating supply for unprecedented demand

A significant part of the global shipping fleet ready for recycling in the next decade come from the post-panamax category. The name is derived from the fact that they are too large to pass through

Working on the ground

The Taasinge Maersk undergoing responsible ship recycling at R.L. Kalthia (Plot 19) in Alang, India – August 2021. The Maersk-funded Mobile Health Unit and qualified trainer imparting health awareness training to the workers. the Panama Canal, and they are also too large to be responsibly recycled at the vast majority of the world's currently available recycling facilities. Given this challenge, it is crucial that we engage to create responsible ship recycling opportunities for mainstream, commercial, post-panamax vessels globally. We need to begin to send demand signals and lead the creation of new opportunities for responsible ship recycling. In 2021, we progressed our ongoing dialogues with global players and assisted with research and technological developments, building the business case and performing due diligence for potential sites.

Compounding this urgency is the delay in including yards in non-OECD countries in the EU List – which lists yards allowed to recycle vessels registered in EU countries. The fact remains that very few yards included in the EU List are capable of handling post-panamax vessels, and that even fewer wish to accept commercial vessels for recycling as their current activities are more profitable. This was confirmed by a 2020 study by the Baltic and International Maritime Council (BIMCO)12 .

Uniting for change

We remain steering group members of the Ship Recycling Transparency Initiative (SRTI), to which we were founding signatories in 2018. The SRTI aims to accelerate a voluntary, market-driven approach to responsible ship recycling and today has 13 shipowners across a range of vessel types and geographies disclosing data on their ship recycling policies and practices. This enables lenders, investors, cargo owners and others to make informed decisions and reward good practice through the market. 2021 saw an increase in the interest from insurance providers, allowing for more collaboration between shipowners and financial stakeholders in moving the initiative's goals forward. With a total of 30 signatories (shipowners and other stakeholders), the SRTI includes more than 50% of the global container fleet by TEU capacity.

Ship recycling's link to green steel

Steel is one of the core engineering and construction materials today. However, the steel industry is among the three biggest emitters of CO₂13. Some of our customers are engaging on this subject through ResponsibleSteel, a non-profit collaboration developing an independent third-party certification programme for the steel value chain. Financial institutions and investors are focusing on the issue via ESG ratings and global coalitions such as the MSCI, Glasgow Financial Alliance for Net Zero, etc. While green steel does not exist today, the technology is maturing for it to be from around 2025. Steelscrap emerging from large vessels will increasingly be recognised as a viable raw material to produce green steel. We will engage with the shipping industry stakeholders to better understand the global steel value chain and how we could play a role in decarbonising it.

11 Proposal for a new Regulation on waste shipments, November 2021 (ec.europa.eu/environment/publications/proposal-new-regulation-waste-shipments_en) 12 Report on the European List of Ship Recycling Facilities, BIMCO, December 2020 (www.bimco.org/-/media/bimco/ships-ports-and-voyage-planning/environment-protection/recycling/updated-report-on-the-european-list-of-ship-recycling-facilities-december-2020-final.ashx) 13 Decarbonization challenge for steel–McKinsey & Company, June 2020 (www.mckinsey.com/industries/metals-and-mining/our-insights/decarbonization-challenge-for-steel)

Social

A.P. Moller - Maersk's ambition is to ensure that we provide an engaging, safe and inclusive place to work, where we take action to secure that all workers have decent working conditions and that we continue to improve the work environment for all our employees. Our actions are guided by our values, international standards and the expectations of our key stakeholders.

In this report, we report on our strategic commitments to safety and security, diversity, equity and inclusion and human capital as well as the issues of human rights, employee relations and labour rights.