Sustainability report 2024

Contributing to a sustainable ocean industry

Cefor’s purpose is to represent its members’ common interests in the field of marine insurance and contribute to a sustainable ocean industry. Through this statement, Cefor has made a clear commitment to work together with our members and other stakeholders to facilitate and promote sustainable developments within the ocean industries for the benefit of the global community. 

Sustainability, whether related to environmental, social or governance issues, is one of the strongest drivers for change today, influencing consumer behaviour, governments, and businesses alike. Marine insurance is no exception to this for several reasons.

First, it directly affects the risks that our members insure. Climate change leads to more severe storms and flooding, which in turn increase the frequency and severity of claims. Together with our members, we also share a responsibility to deliver services that support the fight against this global threat, to comply with international law and prevent illicit activities such as corruption and bribery, to protect the lives and health of seafarers, and to ensure decent working conditions. Moreover, environmental, social and governance (ESG) issues are becoming increasingly important to shareholders and employees and are a prerequisite for recruiting future talents. And finally, the energy transition and the shift towards greener shipping represent new opportunities to expand product lines for renewables and meet clients’ changing needs.

I. KEY ROLES

Cefor and its Nordic marine insurance members have a key role in contributing to a sustainable ocean industry. 

The role of marine insurers

Cefor members engage daily in environmental, social and governance (ESG) issues through loss prevention activities, supportive claims handling, risk selection, and Know Your Client (KYC) programmes. At the heart of this lies the key role of marine insurers in understanding and managing risks and offering assistance and financial protection when disaster strikes. For clients, it provides a risk management tool. The role of financial authorities is to secure solvent companies with the aim of providing adequate protection to policyholders and beneficiaries. Regulators are responsible for setting standards to ensure safety at sea, prevent pollution, and prevent illegal activities such as corruption, money laundering and breaches of sanctions. 

Prevention will always be better than cure, and much effort is invested in learning from past behaviour. Drawing knowledge from a large amount of accumulated data, our members are well placed to offer advice on how to prevent incidents and thereby reduce the risk of pollution, injury to crew and damage to property. This is done through targeted conferences, webinars, loss prevention circulars, exercises, and dialogue with clients.

In the event of an incident, Nordic marine insurers offer extensive support through what is widely known as the ‘Nordic claims handling model’. Through experience from multiple incidents around the globe, our members have tailored their organisations to react quickly and appropriately to various casualty scenarios and thus prevent an incident from escalating further. A network of internal and external experts is on hand to assist, and financial resources are made available both during and after an incident to protect those who have been affected.

Sustainability is also increasingly being incorporated into risk assessment and selection procedures. Safety has always been at the heart of underwriting, but dialogue between owners and their insurers is expanding to include crew welfare and the climate footprint, to name just two aspects. Individual companies will vary in their risk appetite, and we have already seen examples of insurers taking a firmer stance on insuring certain risks to comply with their own ESG targets. The worst performers within a vessel segment might find themselves in the spotlight with this growing awareness on sustainability and mandatory reporting to increase transparency. 

Know-Your-Client procedures have become an integral part of the business of marine insurance. The individual insurer has an obligation to perform its own due diligence to ensure compliance with national and international laws. By refusing financial cover for any illicit activities, marine insurers provide a strong incentive for a level playing field and compliance with relevant laws.

The role of Cefor

Cefor is committed to promoting a sustainable ocean industry. To this end, a revision of the Cefor strategy to further incorporate sustainability at all levels of the Association was initiated in 2024. The revised strategy will be adopted in 2025.

The important work of our members is supplemented through joint action and the three main roles Cefor takes on:

• Influencing; among its members, and in discussions with owners, manufacturers, surveyors, salvors, brokers, classification societies and not least regulators.
• Facilitation; by creating meeting places, and by enabling new and greener technologies, solutions and choices through the drafting of clauses and guidelines.
• Knowledge-sharing; using statistics, training courses and seminars, sharing best practice and information, and facilitating dialogue with external partners to better understand and manage the new risks.

Sustainability is a focus of all ten Cefor member forums and incorporated into their respective activities. The Sustainability Forum was formed in June 2023. The environmental footprint from Cefor meetings is also reduced by extensive use of digital platforms. 

The legally binding international treaty on climate change adopted in 2015 – the Paris Agreement – sets a goal of limiting global warming and achieving a climate-neutral world by mid-century. Shipping followed suit in 2018 when the International Maritime Organization (IMO) adopted a strategy with a target of reducing annual greenhouse gas emissions (GHG) from vessels by 50% by 2050 compared to 2008. From 2023 it became mandatory for all vessels to calculate their attained Energy Efficiency Existing Ships Index (EEXI) to measure their energy efficiency and to initiate the collection of data for the reporting of their annual operational carbon intensity indicator (CII) and CII rating. 

A revised Strategy was adopted by IMO’s Marine Environment Protection Committee (MEPC) 2023, setting a well-to-wake target of net-zero GHG emissions by 2050. Interim goals were agreed with a minimum 20% reduction by 2030 (compared with 2008), including a 40% carbon intensity reduction target and 5% uptake of net-zero technologies, fuel and/or energy savings, and minimum 70% reduction by 2040. There was also an agreement in principle on a new GHG intensity fuel standard and possible price on GHG emissions. These new GHG measures are under development in view of adoption in 2025 and entry into force from 2027. The Strategy will be revised in 2028.

In 2023, IMO’s Maritime Safety Committee (MSC) agreed to an IUMI co-sponsored proposal to undertake a regulatory assessment of safety aspects associated with reducing GHG emissions from vessels in line with the Organization’s strategy. Recommendations to address each of the identified barriers and gaps in the IMO regulatory framework are considered by a Correspondence Group until MSC 110 in June 2025.

The European Union has implemented its own legislation through their Fit for 55 package. In January 2024, the EU's Emissions Trading System (EU ETS) was extended to cover CO2 emissions from all large vessels (of 5 000 gross tonnage and above) entering EU ports, regardless of the flag they fly. FuelEU Maritime is implemented from 1 January 2025 and sets requirements on the annual average GHG intensity of energy used by ships trading within the EU or European Economic Area (EEA) and penalties to be paid for non-compliance.

Insurance companies have a choice of being left behind or continuing to support their clients in the push for more sustainable solutions. Cefor and its members have made a clear commitment to the latter.

As vessels become greener, new risks are introduced. Environmentally friendly fuels carry their own risks. Ammonia is both toxic and corrosive, and hydrogen has a wide flammability range and ignites easily. These new fuel types are also largely untested, and the insurance industry has no history or loss records to help it assess the potential risks involved. Our members are dedicated to supporting shipowners in their transition to low or zero carbon fuels safely and with all associated risks fully understood and managed. To ensure a safe transition to more environmentally friendly solutions, Cefor is playing a role in identifying the safety gaps in dialogue with class, owners, manufacturers and regulators. Several meetings and webinars were facilitated in 2024 to increase knowledge of the risks and how to mitigate them. 

Just as importantly, we have also engaged with other stakeholders and in discussions with class and regulators – particularly the IMO - on new or amended regulations, standards and guidelines that might prove necessary.

New opportunities may arise from the transfer of cargo from land to more environmentally friendly transport by sea. And with energy companies moving from hydrocarbons to renewable energy sources such as floating offshore wind, discussions have already begun on standardising insurance solutions to facilitate the further expansion of these units.

Compliance plays an increasingly important role within the marine insurance industry, and considerable emphasis is placed on establishing proper due diligence procedures to detect any illicit activities. To increase regulatory compliance, Cefor has focused among other things on the sharing of best practice to prevent fraud, kickbacks, corruption, bribery, money laundering and breaches of sanctions. A Cefor ‘know your costumer form’ has been developed to standardise the minimum requirements in a common template. In March 2024, a new Sanctions Forum was formed to focus on the application of relevant sanctions regimes. A Cefor oil price cap attestation form was issued in February 2024, and a sanctions due diligence questionnaire was agreed in May 2024.

Nordic marine insurers are taking a more proactive interest in sustainability and incorporating this across all business areas from investment strategies to underwriting, loss prevention, claims handling, and business development. From Cefor, we are committed to supporting these efforts towards a more sustainable ocean industry.

II. UN Sustainable Development Goals

Considering Cefor’s four focus areas; conditions, statistics, education, and framework conditions, the following five United Nations (UN) Sustainable Development Goals  (SDGs) have been identified as particularly relevant to the Association: 

In the following, the relevance to Cefor is further explained for the five selected SDGs.

Goal 8: Decent work and economic growth

Relevant to:

• Seafarers
• Yard workers
• Stowaways
• Migration

Tools:

• New safety regulations / framework conditions / industry policy
• Knowledge sharing (forums, seminars, education programmes, sharing of best practice)
• Clauses: Nordic Plan, P&I, war risks / K&R
• Screening Illegal, Unreported and Unregulated fishing lists

Ongoing discussions / Cefor involvement:

• Selection of more sustainable repair yards.
• Selection of more sustainable repair yards.
• Autonomous operations: potential to reduce risk of injury/loss of life. 
  Examples: use of drones in enclosed spaces, remote surveys, alternative maintenance regimes (condition-based), fires on container vessels (improve detection, fire-fighting equipment, water shields, protect accommodation).
• Smaller vessels (non-SOLAS) to be included in Polar Code from 2026.
• Fires: reduce risk to seafarers by improved fire detection and firefighting methods.
  Examples: misdeclared cargo on board container vessels, low pressure fuel systems, transport of lithium-ion batteries.
• Dialogue with Norwegian authorities on IUU fishing.

Goal 13: Climate action 

Relevant to:

• Climate change; incl. severe weather events
• Members
• Employees / recruitment
• Assureds
• Industry partners

Tools:

• New safety regulations / framework conditions / industry regulation necessary to insure / facilitate decarbonization (alternative propulsion, vessel design, renewable energy).
• Knowledge sharing (forums, seminars, education programmes, sharing of best practice, meetings with external stakeholders (class, manufacturers, researchers etc.)) to understand the new risks.
• Clauses: Nordic Plan & liability regimes to keep up with developments and offer insurance solutions.

Ongoing discussions / Cefor involvement:

• Decarbonization: IMO 2050 & EU Fit for 55 package.
  • New technologies & alternative fuels.
  • New and improved energy sources.
• Floating windfarms: Regulations, class rules and possible agreement on Nordic wording.
• Transportation and charging of electric vehicles.
• Use of NoMIS database (vessel emissions and acivity).
• Consideration of more sustainable choices in the Nordic Plan through a Young Plan Group.
• Reporting (voluntary and mandatory), affiliate member Poseidon Principles for Marine Insurance (PPMI)
• Supporting organisation for the Getting to Zero Coalition and UNEP FI Principles for Sustainable Insurance (PSI).

Goal 14: Life below water 

Relevant to:

• Biodiversity, breeding areas
• Members
• Employees / recruitment
• Assureds
• Industry partners

Tools:

• Loss prevention activities through Cefor forums and within member companies.
• Efficient claims handling to mitigate an incident (salvage, pollution actions, Nordic claims handling model).
• New safety regulations / class rules.
• Knowledge sharing (forums, seminars, education programmes, sharing of best practice).
• Clauses: Nordic Plan, Cefor form 280 (vessels less than 15 m) & P&I.

Ongoing discussions / Cefor involvement:

• New technologies and alternative fuels.
• Sustainable & pro-active claims handling in case of casualty.
• Plastic litter; incl. loss of containers with plastic pellets (nurdles) and fishing nets in the sea.
• Arctic sailings: infrastructure, Polar Code requirements for non-SOLAS vessels from 2026, trading areas (Nordic Plan).
• Recycling of vessels.
• Floating repair docks: introduction of guidelines and push for new regulation.
• Fires with subsequent pollution/emissions to sea (misdeclaration, loss of containers, low pressure fuel systems): Regulatory amendments for detection and firefighting, class rules.
• Autonomous vessels.
• Stern tube damages – biodegradable lube oils.  

Goal 16: Peace, justice and strong institutions

Relevant to:

• Global maritime industry (incl. marine insurance)
• International regulation to ensure a level playing field
• Seafarers

Tools:

• Knowledge sharing (forum discussions, sharing of best practice, guidelines, education, information, NoMIS).
• Regulations / regulatory institutions (support of IMO and international trade regimes).
• Transparency (use of data, Poseidon Principles for Marine Insurance).

Ongoing discussions:

• Prevention of financial crime: Corruption / bribery / KYC /anti-money laundering – sharing of best practices and Cefor standard forms/questionnaires to obtain information.
• Sanctions.
• Transparency Act.
• Illegal, Unreported and Unregulated (IUU) fishing (several individual members signed up to Oceana statement).
• Reporting requirements & compliance.

Goal 17: Partnerships for the goals

Relevant for:

• Cefor as a trade association, bringing the Nordic market together and taking a global lead through IUMI.
• External liaison with other stakeholders (public and private).

Tools:

• Facilitate meeting arenas (members alone and with other industry partners).
• Common public voice.
• Knowledge sharing (forums, seminars, education programmes, NoMIS).
• Standard clauses.

Ongoing discussions:

• All forum activities.
• Cefor Learning Design: all education activities and consideration of new in relation to the Insurance Distribution Directive.
• Regular and ad hoc contacts with other stakeholders through established representation in forums/committees, public consultations and discussions as needed (public authorities, class, members' customers, yards, manufacturers, brokers).
• Version 2027 of the Nordic Plan.
• Nordic floating windfarms wording.
• PPMI, Getting to Zero Coalition, UNEP Principles for Sustainable Insurance.

III. Voluntary initiatives

Poseidon Principles for Marine Insurance (PPMI)

Inspired by the launch of the Poseidon Principles in June 2019 and the Sea Cargo Charter in October 2020, the ‘Poseidon Principles for Marine Insurance’ (PPMI) were launched in December 2021. Cefor is one of the founding Affiliate members of the PPMI. As an association, we support the transparency offered by the Principles to foster dialogue towards a common goal of a decarbonised shipping industry. While members of Cefor are always free to enter into any business-related agreements, Cefor’s role is to support, facilitate and share knowledge of the Principles and ensure that they remain relevant over time. 

The Poseidon Principles for Marine Insurance are a global framework for assessing and reporting on the climate alignment of insurers’ hull and machinery portfolios. They enable the insurance sector to implement transparency and establish a common global baseline to quantitatively assess and disclose the climate alignment of the portfolios. 

For Signatories, the Principles apply to all business activities that cover hull and machinery for vessels with an established Poseidon Principles trajectory whereby the carbon intensity can be measured with the International Maritime Organization (IMO) Data Collection System. The PPMI are consistent with the policies and ambitions of the IMO, including its well-to-wake target of net-zero greenhouse gas (GHG) emissions from shipping by 2050 compared to 2008. The PPMI were amended in 2023 to align with this new target, transparently disclosing scores for both the previous 50% CO2 reduction trajectory, as outlined in the 2018 IMO initial strategy, and the new 100% trajectory. 

The four principles of assessment, accountability, enforcement, and transparency serve as an important tool to support responsible decision-making, reporting, and monitoring of progress over time. The second combined PPMI report from Signatories and Affiliates was published in January 2024. In June, PPMI approved an alternative Modelled Data Pathways Track following a benchmarking exercise conducted by their Technical Committee and later reviewed and validated by Cefor. Gard, the Norwegian Hull Club and Skuld are among the Signatories. Hydor and Cefor support the initiative as Affiliate members. In December 2024, Cefor published its second report with an analysis of vessel emissions and activity in support of the PPMI framework (read the report here). 

Getting to Zero Coalition

Cefor is a supporting organisation to the ‘Getting to Zero Coalition’, a partnership between the Global Maritime Forum and the World Economic Forum. More than 180 companies within the maritime, energy, infrastructure, and finance sectors, supported by key governments and intergovernmental organisations, are currently part of this alliance. The Coalition aims to accelerate the decarbonisation of maritime shipping by developing and deploying commercially viable zero-emission deep sea vessels by 2030, supported by the necessary infrastructure for scalable zero-carbon energy sources including production, distribution, storage and bunkering, towards full decarbonisation by 2050. 

The Coalition strategy for 2024-2028, aligned with the revised IMO strategy, is intended to foster progress around first mover projects and prepare the transition at scale through testing and putting the enabling environment in place.

Principles for Sustainable Insurance (PSI)

Cefor is also a supporting institution to the ‘Principles for Sustainable Insurance (PSI)’, promoted by the United Nations Environment Programme (UNEP) Finance Initiative (FI). Transparency will become increasingly important for risk selection as marine insurers focus on their portfolio from a sustainability perspective also. In acceding to the PSI, insurers commit to: 

1. Embed ESG issues relevant to their insurance business in their decision-making.
2. Work together with clients and business partners to raise awareness of ESG issues, manage risks and develop solutions.
3. Work together with governments, regulators and other key stakeholders to promote widespread action across society on ESG issues.
4. Demonstrate accountability and transparency in regularly disclosing publicly their progress in implementing the Principles.

A guidance document for non-life insurance is available from the UNEP FI to support the companies in managing ESG risks in their risk assessment and underwriting, and raise awareness of the potential benefits of integrating ESG into their business model.

Collaboration with regulators and other stakeholders is one of the obligations under the PSI. Cefor works on behalf of its members on several sustainability-related issues, particularly with the IMO and classification societies (see summary table below). 

The PSI initiative is the largest collaborative initiative between the UN and the insurance industry, comprising close to 300 members, including signatory companies Alandia, Gard and Gjensidige

Sustainability focus within Cefor – an overview