History repeats itself but it doesn’t read like this

History repeats itself but it doesn’t read like this

The risk to shipping portfolios from the energy transition deserves to be better understood than by making uncorrelated comparisons

Are shipowners and their financiers complacent about the risks to their business from the energy transition? The authors of a new report from University College London think so, though to make their case they choose two unlikely comparators.

Using the bankruptcy of Hanjin Shipping in 2016 and the collapse of the German KG system in 2009 to highlight the risks, UCL argues that banks still have form when it comes to underestimating the combined impact of policy, market shifts and technology developments.

At the report’s heart is the startling assertion that because climate risk is new, banks fail to understand it. In fact, the underlying financial risks are anything but new; banks and shipowners have established methodologies for analysing precisely these risks.