Environment | Social | Governance

Our ESG Strategic Roadmap

We maintain the highest operational standards both on board and onshore to provide an ethical, safe, and pollution-free environment for all.

This report covers the period from January 1 to December 31, 2022, and illustrates our environmental, social and governance (ESG) activities, responding to our stakeholders’ expectations and interests in a transparent and comprehensive way.

At Danaos, we regard sustainability as both a fundamental component of our corporate culture and a crucial decision-making regulator. We maintain the highest operational standards both on board and onshore to provide an ethical, safe, and pollution-free environment for all. We assess our success against our commitments and optimize our approach appropriately, and we are pleased to note that considerable achievements have been achieved on our ESG journey. Danaos acknowledges the importance of being a responsible member of society, hence our Environmental, Social, and Governance (ESG) approach provides us with a strategic roadmap toward becoming a more sustainable and resilient corporation.

Our ESG agenda and sustainability are at the forefront of all that we do.

Our Commitments | 2025 Goals

Danaos’ sustainability plan between 2021 and 2025 is outlined below, summarizing our commitments to ESG.

ENVIRONMENTAL Targets 2021 - 2025 | Status 2022

Embedded

Emissions

25% of vessels already fitted with AMPs to ensure full power with less emissions.

Exhaust gas Cleaning Systems (scrubbers) have been installed, certified and are now in operation onboard 11 Danaos vessels.

Voluntary enrollment in the DNV “CO2 Index” project, monitoring and certifying fleet’s performance and CO2 emissions.

ISO-50001 Environmental Management System adopted in 2015 is now stimulating energy efficient operational practices and provides the necessary metrics.

Perform gap analysis and issue compliance roadmap with modifications to take place on each vessel (when relevant enforcement takes place).

Comply with IMO 2020 regulations on 0.5% sulphur cap, achieving a successful and smooth transition from HSFO to VLSFO.

Develop tools to monitor compliance with various initiatives such as the Poseidon Principles, Climate Bonds, SBTi and sharing of relevant data with our clients.

Zero waste overboard. No paper to landfill from our offices.
New target set in 2021.

Ensure full transparency to the IMO DCS and EU MRV emission reporting schemes through our advanced WAVES data analytics platform.

Monitor and report company’s fleet emissions and energy efficiency indices in our annual report.

Become a member of the Global Maritime Forum (GMF) and join the Getting to Zero Coalition.

Become a member of the Ammonia Energy Association (AEA) and explore potential alternatives for newbuilding vessels.

Become a member of the Methanol Institute.

In progress

Emissions

Full alignment with the IMO 2030 targets for carbon intensity and the 2050 targets for net- CO2 emissions.

47.5% reduction of CO2 emissions per transport work by 2025.
(baseline 2008 IMO) (grCO2/tones X miles)

New Target set in 2021.

42.6% reduction in 2022 vs 2008.

By 2050 all newbuilds are to be carbon neutral transitioning to alternative fuels subject to availability, as well as technological and regulatory readiness.

New Target set in 2021.

Participating in Joint Industry Projects (JIP) investigating the use of alternative fuels to improve combustion and reduce the carbon footprint of vessels.

Work with vessels to ensure zero significant spills.

Successful installation, certification, and operation of Water Ballast Treatment systems for the whole fleet.

By end of 2022 91% of the Fleet is already equipped with WBT.

Reduction of wastes volume onboard vessels 50%.

In 2022 garbage compactors installed in 9 vessels (all fleet to be installed by 2025).

Work on the full digitalization of company’s processes ensuring close control and prompt response promoting fuel efficiency.

Continuous study and research on technical measures and design retrofits aiming at improving vessels performance.

Support R&D research activities on the study and investigation of the use of alternative fuels and innovative technologies.

SOCIAL Targets 2021 - 2025 | Status 2022

Embedded

Child and Forced Labor

No child or forced labor permitted in our own operations.

Screening to our suppliers to preclude child or forced labor.

Maintain annual crew retention rates above 80%.
’22 Retention rate: 81.2%

Compliance with ILO requirements for seafarers.

Expand diversity and equal opportunities.
New Target set in 2021.

Maintain annual employee retention rates above 90%.
‘22 Retention rate: 90%

Maintain our strong social engagement and provide support to vulnerable groups.

Encourage the spirit of volunteerism among the employees towards environmental and charity activities.

Increase social media impact by 30%.

Provide Sponsorships to Universities’ Students.

In progress

Safety

Maintain our LTIF significantly lower than the industry averages.

Ensure company culture of sustainability is in place onboard and ashore.

Ongoing monitoring of our people’s career development and training.

GOVERNANCE Targets 2021 - 2025 | Status 2022

Embedded

Corruption

Zero Tolerance to bribery and corruption.

Provide to all (100%) crew members and office employees a customized educational program of ethical business conduct.

Provide a confidential and effective whistleblowing system for reporting violations.

Maintain full transparency in ESG report.

Increase ESG Ratings by globally renowned Rating Agencies.

Integrate SASB standards into ESG report.

In progress

Corruption

Establish partnerships with sustainable and anti-corruption initiatives.

25% women as Board Members and Executives.

Maintain customer satisfaction at 95% or above through the application of new tasks.

In 2022 we initiated a customer satisfaction survey receiving a result of 82%.

The UN Sustainable Development Goals

In Danaos we are working on aligning key specific targets and future investments with the United Nations Sustainable Development Goals (SDGs) and Environment, Social and Governance (ESG) criteria. We are a link in a chain of multiple forces, and our priority is to strengthen our commitment to contributing to this global call to take action to eradicate poverty, safeguard our planet and mitigate climate change implications by 2030. We have completely incorporated the SDGs into our strategy, recognizing those that are most relevant to our business and evaluating their potential to support us leverage our contribution to the UN 2030 Agenda.

Our environmental sustainability goals are outlined in the bullets below:

  • Work towards decarbonization and achieving carbon neutrality by 2050.
    Continue our research on energy efficiency and alternative fuels and technologies.
  • Establish partnerships with key stakeholders to promote sustainable development.
  • Ensure perfect compliance with regulations at sea, prevent negative impacts on marine biodiversity by avoiding water pollution, ensuring proper waste management and ballast water management and treatment.
  • Fully comply with regulatory demands to reduce air emissions impacts and continue investing in maintaining and implementing solutions that will enable this.
  • Promote circular economy principles by implementing policies fostering 3R concept.
  • Training of both ashore and onboard personnel on decarbonization awareness and actions to take place.
  • Work further on digitalizing company processes and devising the tools that shall foster the decarbonization process on a transparent and block-chain ready concept.

IMO’s GHG Emission Reduction Targets

IMO continues to contribute to the global fight against climate change and takes urgent action to combat its impacts. As such, it has adopted mandatory measures to reduce emissions of greenhouse gases from international shipping, through the IMO’s pollution prevention treaty (MARPOL) – the Energy Efficiency Design Index (EEDI), and the Ship Energy Efficiency Management Plan (SEEMP) which are both mandatory for new ships. The GHG strategy envisages a reduction in carbon intensity of international shipping by at least 40% and 50%, compared to 2008 levels, by 2030 and 2050, respectively.

Danaos has already fulfilled the IMO’s 2030 carbon intensity requirements 9 years ahead of schedule, delivering a 39.5% decrease in CO2 emissions per ton mile compared to 2008, the base year, thanks to an increase in weighted average speed of over 1 knot in 2021. Danaos also installed AMP on 25% of its existing fleet to reduce emissions when at dock, hitting the 2025 objective three years ahead of schedule.

Key Partnerships

We are actively pursuing membership in industry associations and committees in order to contribute to the progress of the shipping industry via the exchange of expertise, as well as the support and promotion of sustainability and environmental concerns.

In 2020 Danaos became a member of the Global Maritime Forum (GMF), adhering to the Getting to Zero Coalition statement.

We have also been members of the Ammonia Energy Association (AEA) since July 2020, attending meetings and staying up to date on all the latest advancements in the usage of ammonia in the marine sector.

We support the Poseidon Principles that help banks align their shipping loans with climate goals as set by the IMO. Signatory banks measure the carbon intensity of their shipping loans, relying on the global Data Collections System for fuel oil Consumption by ships (“IMO DCS”) and publicly report how their shipping loans align to the climate goals. As a result, banks can focus on financing “green” assets, such as vessels with technologies that allow for low GHG emissions. In 2022 20% of Danaos fleet already complied. The percentage was lower than the previous year (35%) since the trajectory line was revised in 2021 by the Poseidon Principles and became stricter, while the vessel’s average speed increased by almost 1 knot resulting in a higher average AER4 value for 2021.

Climate bond initiatives are also explored to verify fleet’s compliance. We also work with Science Based Targets (SBTi) and the Methanol Institute (MI) and plan to proceed with further commitment, in the view of recently launched sectoral trajectories for the maritime sector that enables to set near-and long-term science-based emission reductions targets in line with 1.5°C.

It is also important to mention that in view of the EU taxonomy regulation that sets a clear framework classifying environmentally sustainable economic activities Danaos will take a first step to identify the eligible activities that are covered by the taxonomy, and subsequently we shall identify the % of alignment of Danaos economic activities according to the technical screening criteria developed by the EU.

4Annual Efficiency Ratio (AER): The ratio of a ship’s carbon emissions per actual capacity- distance (e.g., dwt/nm sailed). The AER uses the parameters of fuel consumption, distance travelled, and design deadweight tonnage.