Supply chain risks are not limited to delays and disruption for modern cargo owners. Any discrepancy in ESG standards – even if unintended, and unknown to a cargo owner – can lead to untold reputational damage. This is especially true today, as public-facing companies implement increasingly stringent and ambitious ESG policies. As a result, ports’ environmental and social credentials are steadily coming under more scrutiny.

This new focus is already creating commercial advantages for any ports that can display a sound environmental and social record. Not only is this making it easier to work with a port’s own stakeholders and financiers, it is starting to have a direct impact on how attractive an option it is for discerning customers.

ESG is becoming business critical

The collective impact of the global port and terminal sector on emissions and local communities is sizable. Emissions and air pollution represent a significant chunk of this impact, while safety for workers is another major concern. Indeed, UNCTAD estimates that reducing emissions from ports could directly improve the health of over 3.5 billion people by curbing air and water pollution – and indirectly improve health and wellbeing for more by helping to mitigate climate change.

Port safety is perhaps a more bread and butter way to improve portside community wellbeing and corporate responsibility, but is no less of an important a part of the ESG equation. Cutting accidents and creating safer working environments improves wellbeing for port workers, while creating additional efficiency benefits for port operators and dramatically improving key ESG indicators.

Many of a typical port’s stakeholders have understood this dynamic for some time. And as, focus on the environmental impact of a company’s supply chain continues to grow, cargo owners are reviewing whether ports are an asset or a weak link in their sustainability strategy. The biggest and most progressive cargo owners have already gone public with their plans, especially in relation to reducing emissions and have put explicit pressure on their shipping suppliers to improve their credentials. For example, Ikea, Unilever, Michelin, and Amazon have not only highlighted shipping in their climate plans, but they have also created a platform to lobby the sector and bring about change faster.

The role of good lighting

Lighting often goes under the radar in conversations about port emissions, safety, and pollution. The emissions and pollution associated with ships at dock, for example, can dwarf emissions and pollution associated with lighting. However, a port that does not have the right lighting solution cannot strive to be environmentally friendly – or be truly safe.

Where it can be difficult – or costly – for a port to control a ship’s emissions when docked, lighting infrastructure is a critical building block towards sustainability that lies completely within a port operator’s control. It may also represent minimal CAPEX for a port, while delivering rapid OPEX savings in lower energy bills, a longer service life, and operational improvements.

Yet, there are ports today that are using outdated lighting technology, such as pressure sodium systems or other older lighting technology. These systems may be cheap to install, but they deliver high energy use and must be replaced regularly to combat rapid degradation. They also create a yellow, poor-quality light, which makes it harder for workers to judge distances and see approaching objects.

In contrast, Midstream’s high-quality LED lighting systems can reduce energy use by as much as 70% compared to older lighting technologies. They also provide crisp, high-quality light that allows for safer operation – while reducing degradation and the need for replacements, as well as air pollution and greenhouse emissions.

At Midstream, we work closely and transparently with ports throughout the entire design and installation process to deliver a whole-system approach. This enables Midstream to design standards and installations that cut overall emissions for a port, while ensuring that even the most difficult container-filled areas are always safely lit. This design-centred approach, alongside innovative technologies like motion sensors, means that we are often able to reduce energy use by more than a like-for-like luminaire replacement.

Ports are starting to face pressure on ESG performance from their biggest stakeholders and should be prepared for this to become more acute in the coming years. This means that setting and delivering on their safety, emissions, and air pollution promises is going to become crucial for remaining competitive. Where lighting is a relatively small cost for ports, it is essential that operators start to invest in lighting infrastructure today, to make sure that they can meet tomorrow’s challenges, as well as today’s.

Marex Media