OUR ESG STRATEGIC ROADMAP
The Danaos Low Carbon Transition Plan (LCTP), published in 2022, offers a comprehensive overview of our dedication to climate action and describes our decarbonization strategy.
This ESG Report covers the period from January 1 to December 31, 2023, 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. We acknowledge the importance of being a responsible member of society, hence why 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 related actions are at the forefront of everything that we do.
The Danaos Low Carbon Transition Plan (LCTP), published in 2022, offers a comprehensive overview of our dedication to climate action and decarbonization strategy, surpassing the targets set by the IMO. It reflects our aspirations to align with the 1.5°C pathway and adhere to internationally recognized goals for both the near and long term. Our primary avenues for reducing carbon emissions include implementing technologies to enhance fuel efficiency and minimize process emissions, investing in a greener fleet, and incentivizing our suppliers to reduce their carbon footprint. The LCTP aims to achieve a 50% reduction in Energy Efficiency Operational Index (EEOI) by 2030 compared to 2008 levels, with the ultimate goal of attaining carbon neutrality by 2050. Key initiatives such as the adoption of Shadow Carbon Pricing and commitment to the Science Based Initiative are poised to play a pivotal role in realizing the objectives outlined in the LCTP. By aligning our environmental vision with targets beyond those set by the IMO, including the Sustainable Development Scenario (SDS) and Nationally Determined Contributions (NDC) under the United Nations Framework Convention on Climate Change (UNFCCC), we underscore our commitment to environmental stewardship and sustainable practices.
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Following S&P Global CSA evaluation we were ranked in the top 20% of the "Transportation and Transportation infrastructure" sector, while we excelled in the Environmental Pillar, placed among the top 10% in the sector!
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In the "2023 CDP Climate Change Response Assessment," we received a CDP Score B- and a B- score for the CDP Supplier Engagement Rating report.
MATERIALITY
ASSESSMENT
In 2023, we enhanced our approach to sustainability and risk management by integrating the Double Materiality Assessment with the Risk Management processes. This integrated approach is informed by specific criteria such as sector materiality, stakeholder expectations, legal commitments, and strategic alignment, ensuring a comprehensive understanding of ESG impacts and associated risks.
A qualitative questionnaire was distributed to individuals belonging to 6 stakeholders’ groups (employees, charterers, insurers, financial institutions, suppliers, and the management). Stakeholder insights from the materiality assessment enhance the understanding of risk perception. By actively involving stakeholders through a qualitative survey, we gain a multifaceted view of how different ESG topics impact various stakeholder groups. The topics acknowledged of high importance either from the external stakeholders or the company’s management ranked as material.
Governance
1. Economic Performance
2. Indirect Environmental
Impacts
3. Procurement Practices
4. Anti-Corruption
5. Tax
6. Monitoring & Mechanisms
7. Regulatory compliance
8. Business ethics
9. Strategy & Risk Management
10. Transparency
11. Roles & Responsibilities
Environment
12. Energy
13. Water and effluents
14. Biodiversity
15. Emissions
16. Waste
17. Suppliers Environmental
Assessment
Social
18. Employment
19. Humans’ rights policy
20. Labor/Management Relations
21. Occupational health
and Safety
22. Training and Education
23. Diversity and Equal
Opportunities
24. Non-discrimination
25. Child Labor
26. Forced and Compulsory
Labor
27. Security Practices
28. Local Communities
29. Supplier Social
Assessment
30. Public Policy
31. Customer Privacy
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An ongoing dialogue with our stakeholders is of paramount importance so that through our actions and targets we can fulfill their needs and concerns. Moving forward, we are regularly developing full materiality assessments in which stakeholders are asked to map out sustainability issues according to their importance.
OUR COMMITMENTS – 2025 GOALS
OUR ESG GOALS AND COMMITMENTS TO THE SDG’S
In 2021 we designed and implemented our updated ESG Plan which includes specific goals and measurable targets for the period 2021- 2025. Environmental protection and pollution
ENVIRONMENTAL
2021 – 2025 | STATUS 2023
EMBEDDED
Emissions
- 47.5% reduction of CO2 emissions intensity by 2025 (baseline 2008 IMO) (grCO2/ tones x miles)
- Exhaust gas Cleaning Systems (scrubbers) have been installed, certified and are now in operation onboard 9 Danaos vessels (2 vessels were sold).
Marine Pollution, Conservation & Biodiversity
- Work with vessels to ensure zero significant spills.
Waste Reduction
- Zero waste overboard. No paper to landfield to our offices.
Environmental Compliance
- Perform gap analysis and issue compliance roadmap with modifications to take place on each vessel (when relevant regulatory enforcement takes place).
Memberships
- Become a member of the Global Maritime Forum (GMF) and joined the Getting to Zero Coalition.
- Become a member of the Ammonia Energy Association (AEA) and explore potential alternatives for newbuilding vessels.
- Became a member of the Methanol Institute
Reporting
- Ensure full transparency to the IMO DCS and EU MRV -UK 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.
Initiatives
- Develop tools to monitor compliance with various initiatives such as the Poseidon Principles, Climate Bonds, SBTi and sharing of relevant data with our clients.
Environmental Management System
- ISO-50001 Environmental Management System adopted in 2015 is now stimulating energy efficient operational practices and provides the necessary metrics.
IN PROGRESS
Emissions
- Full alignment with the IMO 2030 targets for carbon intensity and the 2050 targets for net-CO2 emissions (carbon neutral by 2050).
- By 2050 all newbuilds are to be carbon neutral transitioning to alternative fuels subject to availability, as well as technological and regulatory readiness.
- 25% of vessels will be equipped with AMPs to ensure full power with less emissions.
- Participating in Joint Industry Projects (JIP) investigating the use of alternative fuels to improve combustion and reduce the carbon footprint of vessels.
Waste Reduction
- Reduction of wastes volume onboard vessels 50%.
Innovation
- 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.
Marine Pollution, Conservation & Biodiversity
- Successful installation, certification, and operation of Water Ballast Treatment systems for the whole fleet.
SOCIAL TARGETS
2021 – 2025 | STATUS 2023
EMBEDDED
Child and Forced Labor
- No child or forced labor permitted in our own operations.
- Screening our significant suppliers to preclude child or forced labor.
- Screening our significant suppliers to comply with Human Rights, Equal Opportunities and Non-Discrimination Policies.
Training & Development
- All staff trained on Health, Safety, Social and Environmental (HSSE) risks.
- Offer summer internship programs.
Crew Retention
- Maintain annual crew retention rates above 80%.
- Compliance with ILO requirements for seafarers.
Procurement
- Establish a sustainable procurement policy and screening of our suppliers.
Employee Retention
- Expand diversity and equal opportunities.
Safety
- Screening our significant suppliers to have Safe Working Condition policies in place.
- Zero fatal accidents
Supporting Local Communities
- Maintain our strong social engagement and provide support to vulnerable groups.
- Encourage the spirit of volunteerism among the employees towards environmental and charity activities.
- Provide Sponsorships to Universities’ Students.
- We commit to increase our social impact by 30%
IN PROGRESS
Safety
- Maintain our LTIF significantly lower than the industry averages.
Training & Development
- Ensure company culture of sustainability is in place onboard and ashore.
- Ongoing monitoring of our people’s career development and training.
Employee Retention
- Maintain annual employee retention rates above 90%.
GOVERNANCE TARGETS
2021 – 2025 | STATUS 2023
EMBEDDED
Corruption
- Zero Tolerance to bribery and corruption.
- Screening our significant suppliers to comply with anti-corruption policies.
Reporting ESG - Ratings
- Maintain full transparency in ESG report.
- Increase ESG Ratings by globally renowned Rating Agencies.
- Integrate SASB standards into ESG report.
Ethical Business Conduct
- Provide to all (100%) crew members and office employees a customized educational program of ethical business conduct.
- Screening our significant suppliers to adhere to Danaos Code of Ethics.
Whistleblowing
- Provide a confidential and effective whistleblowing system for reporting violations.
IN PROGRESS
Corruption
- Establish partnerships with sustainable and anti-corruption initiatives.
Diversity
- 25% women as Board Members and Executives.
Customer Satisfaction
- Maintain customer satisfaction at 95% or above through the application of new tasks.
100% of Significant Suppliers to be assessed
- Status: ESG Suppliers Questionnaire was addressed to all Danaos significant suppliers. 35% of them replied. Assessment resulted in zero significant suppliers being excluded from the approved list of suppliers.
THE UN SUSTAINABLE
DEVELOPMENT GOALS
- 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.
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.
KEY
PARTNERSHIPS
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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 speed on all the latest advancements in the usage of ammonia in the marine sector.
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.
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STAKEHOLDER
ENGAGEMENT
Stakeholder engagement helps us to proactively consider the needs and desires of anyone who has a stake at Danaos. This is fostering connections, trust, confidence, and buy-in for our key initiatives. When it comes to our strategic planning, stakeholder engagement is critical. Danaos established a Stakeholders Engagement Policy to leverage the relationships with the stakeholders.
An ongoing dialogue with our stakeholders is of paramount importance so that through our actions and targets we can fulfill their needs and concerns. Moving forward, we are regularly developing full materiality assessments in which