2018 Sustainability Report
A.P. Møller - Mærsk A/S Contents
INTRODUCTION TRANSFORMATION AND OUR BUSINESS 02–05 10–25 Foreword by the CEO 02 Our business 04
STRATEGY AND GOVERNANCE 06–09 Our sustainability strategy and governance 06
Transformation and our business 10 ABOUT THE REPORT Towards a breakthrough in climate change 12 This report covers activities in the 2018 calendar year. Our reporting Making the case for open and inclusive trade 18 approach is to focus on material issues and activities, in line with stakeholder Reducing food loss – a business opportunity 22 concerns and relevance in terms of context, completeness and balance. Momentum towards responsible ship recycling in Alang 24 We strive for optimal accuracy, timeliness, clarity and reliability in the way we communicate. This report also represents our statutory statement on social responsibility and underrepresented gender in accordance with sections 99a & b of the Danish Financial Statements Act. The A.P. Moller - Maersk Sustainability Accounting Principles can be downloaded here: https://www.maersk.com/about/ sustainability/reports Previous years’ data and our UN 18 Global Compact Communication on Making the case for open and inclusive trade Progress table are also available online. Please visit https://www.maersk.com/ about/sustainability/reports. 12 Towards a breakthrough in climate change
A.P. Moller - Maersk PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW 26–37 38–39
DATA AND ASSURANCE 40–42 Performance data 40 Independent assurance report 42
Progress, actions and ambitions 26 PORTFOLIO NOTE Safety: A fundamental shift 28 The future A.P. Moller - Maersk will be Air emissions: SOx and NOx 30 an integrated and focused shipping, ports and logistics company. Oil Spills 31 and oil-related businesses are to be separated. This has resulted in Anti-corruption 31 portfolio changes in 2018. Responsible procurement 32 Maersk Oil is not part of sustainability reporting for 2018. Human rights 33 Maersk Drilling and Maersk Supply Service continue to be classified as Employee relations 34 discontinued operations and are Diversity and inclusion 35 included in this report with data presented on aggregate level. Disaster response 36 Sustainability data for Hamburg Süd is included for 2018. Responsible tax 36 See the A.P. Moller - Maersk Sustainability Accounting Principles: Ocean health 37 https://www.maersk.com/about/ sustainability/reports
Sustainability Report 2018 02 INTRODUCTION | FOREWORD BY THE CEO
We“ have begun a journey towards having net-zero
CO2 emissions from our own operations by 2050. This is an important ambition and one we can only deliver on in collaboration with many other stakeholders. ”
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 03
Foreword by the CEO
Dear reader, Goals and the growing urgency to and the importance of being prepared tackle climate change. With the latest for the unexpected. OUR COMMITMENTS This is A.P. Moller - Maersk’s 10th annual scientific assessments, there is no A.P. Moller - Maersk is report on our company’s sustainability doubt that the world in general needs Global trade will change committed to operating strategy and performance. During the past to embark on an all-encompassing We publish this report at a time where in congruence with the decade, A.P. Moller - Maersk has changed transformation process away from the tensions over global trade are stronger UN Global Compact’s ten in line with our global context. Over the reliance on fossil fuels. This goes for than what we have seen for many principles on responsible last two years, A.P. Moller - Maersk has shipping as well, and we have taken years. So far, global trade has not been business conduct. moved from being a conglomerate with steps to respond to this need. severely diminished by these tensions, We support and commit to contribute activities in a broad range of industries, In 2018, A.P. Moller - Maersk even though we remain alert to different positively to the United towards becoming one integrated established the most ambitious goal trends in the years to come. Our 100- Nations Sustainable company focusing on end-to-end services for reducing CO2 emissions within our year history has taught us that trade Development Goals, in container logistics, simplifying and industry. We have begun a journey is nothing if not resilient. When the while also reducing connecting our customers’ supply chains. towards having net-zero CO2 emissions benefits of global trade are questioned, our potential negative In 2018, we reached several key from our own operations by 2050. This as they are now, the result is that trade impact on the goals. milestones on our strategic journey. In is an important ambition and one we changes. A positive outcome will depend line with our intent to exit the oil and can only deliver on in collaboration with on an orderly process to alter the global oil-related businesses, in Q1 we closed many other stakeholders by innovating rule book on trade. It must reflect the the sale of Maersk Oil to Total, and in Q3 and developing the technologies need for greater balance, inclusivity we announced our intention to pursue a needed to reach the target. and sustainability in trade, and separate listing of Maersk Drilling in 2019. A.P. Moller - Maersk is putting our In September, we announced New approach to safety leverage and insights to work in that the integration of the commercial In 2018 we have also taken significant direction. We are committed and organisation of Maersk Line with steps to renew and step up our approach taking action to assist more people Damco which is going to market under to safety in A.P. Moller - Maersk. While around the world in trading, through the Maersk brand as of January 2019. the last decade brought improvements empowering small businesses, by We have successfully progressed on in safety performance, we have reached reducing complexities and advocating integrating Hamburg Süd, completing the a plateau at which we have not been able the reduction of indirect trade costs. integration of operations and realising to eliminate the high-potential accidents, synergies above expectations. We have including the number of fatalities Continuously committed A.P. Moller - Maersk has been recognised as Global Compact also seen the appointment of a new occurring as part of our operations. In In 2018, A.P. Moller - Maersk LEAD for demonstrating its Executive Board. 2018, we experienced seven fatalities, contributed to The Ocean Cleanup ongoing commitment to the UN Global Compact and We have made progress in the move and my Executive Board colleagues and project which is addressing the issue its Ten Principles. In 2018, towards digitising our business and the I are deeply distressed by this. of ocean plastic pollution. I am pleased A.P. Moller - Maersk has shown its commitment way we serve our customers. Already, We know that accidents are never to see our company being part of the by participating in Action we see that 98% of our bookings and intentional, they occur as a result of efforts to solve this significant issue, Platforms on Reporting on the SDGs, Pathways to Low-Carbon 89% of our quotes, respectively, are a number of factors coinciding, and and it is clear to me that our small part & Resilient Development, Decent Work in Global Supply online. For quotes, this was achieved there is rarely a correlation between in this project is a source of pride for Chains and Sustainable Ocean within just one year and the number is the efforts made to prevent minor many A.P. Moller - Maersk employees. Business, and has submitted an Advanced Communication still growing. We continue to develop events and injuries and high-potential To me, it demonstrates the on Progress, available at our blockchain documentation solution, accidents or events. In the future, we importance of contributing when and www.unglobalcompact.org/ what-is-gc/participants/44. TradeLens, to improve our customer will increase our focus on building the where we can make a difference. We experience and create access to trade, organisational capacity and operational will continue to do so, by running our as digitising information can drive down controls that will act as barriers to business with high integrity, supported the cost of trade, reduce the occurrence accidents being escalated to life- by our values and policies, and our of corruption and support job creation. changing or fatal outcomes. We have continued commitment to the UN established a corporate safety function Global Compact principles. Zero emissions by 2050 and new levels of both leadership and On the global sustainability agenda, employee engagement in safety. I will the dominant changes over the past ten be at the forefront of these efforts, years have been the establishment of the consistently communicating on the Søren Skou United Nations Sustainable Development right and obligation to stop unsafe work CEO of A.P. Møller - Mærsk A/S
Sustainability Report 2018 04 INTRODUCTION | OUR BUSINESS
Our business
A.P. Moller - Maersk employs over 84,000 people across operations in over 130 countries. The company comprises container shipping, ports and terminals, supply chain management and other businesses operating within four main segments. Examples of where some of our material sustainability issues can occur across our businesses and value chains are shown below.
Diversity and inclusion p. 35
Inclusive trade Food loss Human rights Responsible p. 18 p. 22 p. 33 procurement p. 32
CO2 / Climate change A.P. Moller - Maersk enables p. 12 customers to trade and grow by transporting goods anywhere Air emissions: SOx and NOx We work to provide our customers with an end-to- p. 30 end offering of products and services across digital platforms and an end-to-end delivery network, taking the complexity out of global supply chains.
KEY RESOURCES 43,219 732 Invested capital Electricity Ship recycling (USD million) (1,000 MWh) p. 24 56,636 12,017 Total assets Fuel oil (USD million) (1,000 tonnes)
Spills Anti-corruption 84,404 p. 31 p. 31 Employees
Data in this report covers all activities within A.P. Moller - Maersk, including remaining activities in the Energy segment (Maersk Drilling and Maersk Supply Service). It also, for the first time, includes data from Hamburg Süd. See portfolio note on contents page and the Sustainability Accounting Principles.
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 05
ENERGY OUTCOMES
After the sale of Maersk Tankers to A.P. Moller Holding and Maersk Oil to Total S.A. respectively, the Energy division consists of two business units, Maersk 39,019 39,165 Drilling and Maersk Supply Service. A.P. Moller - Maersk has decided to pursue Revenue GHG emissions a demerger via a separate listing of Maersk Drilling in 2019. The pursuit of a (USD million) (1,000 tonnes CO2 eq.) solution for Maersk Supply Service is continuing.
3,806 41% Profit/loss before Relative CO2 reduction depreciation, etc. (EBITDA) (1,000 tonnes CO2 eq. (USD million) 2008 baseline) 645 615 Tax SOx emissions Personal safety (USD million) (1,000 tonnes) p. 28
TERMINALS & TOWAGE Terminals & Towage includes gateway terminals involving land-side activities and towage services under the Svitzer brand.
OCEAN Ocean health p. 37 The Ocean segment includes the ocean activities of Maersk Liner Business together with Hamburg Süd, as well as strategic transshipment hubs under the APM Terminals brand.
Responsible tax p. 36
Employee relations Disaster response p. 34 p. 36
MANUFACTURING & OTHERS LOGISTICS & SERVICES Manufacturing & Others includes the activities of Logistics & Services comprises five main Maersk Container Industry with the production and activities: supply chain management, inland sale of reefer containers. In January 2019, a decision services, inland haulage activities, trade was made to exit the dry container business altogether. finance services and freight forwarding.
Sustainability Report 2018 06 STRATEGY AND GOVERNANCE
Our sustainability strategy and governance
The A.P. Moller - Maersk sustainability strategy is designed to support our business strategy and contributes to the UN Sustainable Development Goals. We work in partnerships to fulfil our ambitions.
ver the past two years, solutions that can alleviate some of the the world set itself a global and shared O A.P. Moller - Maersk has been on world’s major sustainability challenges framework with a common direction PARTNERSHIPS a journey of change, reshaping from while at the same time supporting and a vocabulary to discuss and invent a shipping and energy conglomerate the development of our business. For solutions and transformational actions into a focused transport and logistics example, the goal of decarbonising towards 2030. company. Our ambition is to become container logistics will support our The SDGs also defined a new and the global integrator of container business in living up to the demands of our enhanced space for business to contribute logistics, providing our customers with customers for low-carbon transportation, to solving major global challenges. end-to-end services for a simplified and as well as meeting the need for cost- Looking across the SDGs and connected supply chain. efficient energy and helping us prepare underlying targets, the business of Our sustainability strategy was reviewed for new legislative measures, such as a tax A.P. Moller - Maersk touches, directly or and updated in 2017 with this ambition on carbon emissions. At the same time, indirectly, on all 17 goals. However, for in mind. It is made up of four shared we will be one of the companies driving five of the goals we have the ability to value programmes for our integrated progress towards carbon-neutral options contribute to transformations at scale container logistics business and is based in the transportation sector, which is and we can match these goals with our on responsible business practices on all essential for tackling climate change. sustainability strategy’s shared value material issues (see graphic on next page). programmes (see graphic below). We see the four shared value areas Fulfilling the new role of business For example, trade is central to as the major issues where we can use With the launch of the United Nations’ 17 eliminating poverty, creating decent jobs our business to develop large-scale Sustainable Development Goals (SDGs), and assisting inclusive industrialisation
HOW A.P. MOLLER - MAERSK CONNECTS TO THE UN SUSTAINABLE DEVELOPMENT GOALS
Strong potential for positive impact at scale Through our business, where we can have the greatest positive impact on a systemic level.
Potential direct / indirect positive impact Where our business has or may potentially have a direct or indirect positive impact through our activities and business practices.
Responsibility to mitigate potential negative impact Through our commitment to the UN Global Compact, where our business has a responsibility to mitigate potential negative impacts on people, society and/or the environment.
Relevant sub-targets for each Goal are listed under the SDG icons in the report chapters for each material issue.
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OUR SUSTAINABILITY STRATEGY
Decarbonise our own Invest in innovations and operations and decouple work in partnerships growth in business from to reduce food loss in CO2 emissions the transportation chain
ZERO CO₂
HELP DECARBONISE CONTRIBUTE TO LOGISTICS HALVING FOOD LOSS Reduce complexity in Drive transformation and global value chains transparency in global Empower small businesses ship recycling practices to benefit from trade towards a level playing field based on the highest Support reforms to level SHARED VALUE PROJECTS international standards the playing field for HELP MULTIPLY Drive transformation LEAD CHANGE IN THE BENEFITS THE SHIP RECYCLING inclusive global trade OF TRADE Positive impact at scale INDUSTRY
RESPONSIBLE BUSINESS PRACTICES Health, safety & Diversity & environment Managing responsibilities or risks inclusion Mitigate negative impacts
Human & Ocean health labour rights
Responsible Responsible tax practices procurement
and innovation. It is directly and from our business. These are areas that and we believe we will find better indirectly referenced throughout the are addressed through our corporate solutions faster by building alliances sub-targets defined for each SDG. Our programmes on safety, environment, with competitors, customers, suppliers, business operates at the heart of global human rights, labour, diversity, knowledge institutions, other industries trade, and we can leverage our voice responsible tax and anti-corruption etc. and the public sector. and our reach to support action towards We will continue in the achieving these targets – on the ground The need for partnerships A.P. Moller - Maersk tradition of and in public fora. While businesses strive to take on their working in partnerships to affect The SDGs also comprise other areas part in reaching the SDGs before 2030, systemic change and clear the path for where we can have a positive impact, the need for broader collaboration only transformation. An overview of some of but mostly locally or at a smaller scale, increases. A pressing example of this is the partnerships we are involved in can and areas where we have a responsibility our ambition to decarbonise container be seen in the sidebar on page six. to mitigate potential negative impact logistics by 2050. This is a huge task
Sustainability Report 2018 08 STRATEGY AND GOVERNANCE
MATERIALITY 2018
Our materiality model assesses and groups sustainability issues in terms of • The issue of land acquisition and resettlement by linked third parties has whether they constitute a risk, responsibility or a shared value opportunity for become less material following changes in business strategy, resulting in A.P. Moller - Maersk. Materiality is an important contributor to our strategy fewer or no green field investments, and has therefore been taken out. development and review processes. Our overall thinking on what materiality • The issue of physical impacts of climate change has been added as an means continues to evolve. For example, our work on sustainability risk assumed long-term financial risk following the results of research done this management and investor engagement, particularly in the context of the year in the area of climate risks. recommendations from the Task force on Climate-related Financial Disclosures • In a human rights impact assessment we performed internally in 2015, labour (TCFD), (read more on page 15), has prompted us to reconsider some of the rights in indirect hiring and subcontracted workers, transport and other strategic and financial risks relative to our material issues. services to/from conflict areas and armed services were identified as lacking We have not performed a full materiality update in 2018, but have made in governance and mitigation. We have resolved these management gaps, and three changes compared to 2017 in the risk and responsibility categories: are replacing the three issues with the broader issues of human rights and labour rights.
y it il ib R RESPONSIBILITY s is RISK n k o Where do we have a responsibility to p Where do sustainability issues pose a s mitigate significant potential negative e significant financial or reputational risk
R THE THREE impact on people, society or the DIMENSIONS OF to our business? environment? MATERIALITY Issues: Issues: Major accident / oil spill / chemical spill Injuries and fatalities Major non-compliance with Labour rights corruption regulations S hared value Diversity and inclusion Supplier non-compliance with A.P. Moller - Maersk Third-Party Code Tax practices and transparency of Conduct
Human rights SHARED VALUE Uneven playing field in the enforcement of global SOx regulations Disaster response Where can we, through our business, pursue and scale solutions to meet Physical impacts of climate change Ocean health significant systemic challenges for the benefit of society and, at the same time, create opportunities for our business?
Issues: Disposal of vessels and rigs for recycling
Decarbonising logistics
Multiplying the benefits of trade New issue in 2018 is highlighted in blue and rescoped issues in grey. Food loss
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Governance reflects strategy when relevant. An annual progress report task force is chaired and served by In 2018, a new governance approach was is compiled for the Executive Board to the sustainability department helping developed and will continue to evolve, as support oversight on strategic priorities, to drive and facilitate projects and our business transformation progresses trends and key issues. The Board of collaborations. further. The overall governance Directors receives sustainability strategy Governance on responsible business responsibility for sustainability now updates, and also reviews and approves practices resides with line management resides directly with the Executive Board the annual Sustainability Report. which has, in line with our change rather than a separate Sustainability Each of our sustainability strategy’s towards becoming one company, taken Council, as was the case in the four shared value programmes are on greater responsibility for issues conglomerate structure. The company’s guided by a task force with executive management and risk mitigation. sustainability function brings proposals level sponsorship and management- for new programmes or positions to the level representatives from both line Executive Board for approval as and of business and sustainability. Each
POLICIES GOVERNING OUR ACTIONS
Our work is guided by internal policies based on our Core Values, external standards and commitments. Key international standards and references are listed below.
Material issue Internal governance documents International standards and references Climate change Sustainability strategy The Paris Agreement The Intergovernmental Panel on Climate Change (IPCC) Task Force on Climate-related Financial Disclosure (TCFD) Initial IMO Strategy on Reduction of GHG Emissions from Ships Inclusive trade Sustainability strategy The World Trade Organization’s Trade Facilitation Agreement Food loss Sustainability strategy There is no international governance framework for food loss Ship recycling A.P. Moller - Maersk Responsible Ship Recycling Standard Hong Kong Convention UN Guiding Principles on Business and Human Rights ILO Conventions Safety Rule* on HSE Management UN Global Compact IMO International Safety Management (ISM) Code IMO SOLAS Convention Air emissions Rule on HSE Management UN Global Compact IMO MARPOL Convention Annex VI EU Sulphur Directive 2016/802 UNCLOS Spills Rule on HSE Management UN Global Compact IMO MARPOL Convention Annex VI Anti-corruption Rule on Anti-Corruption UN Global Compact OECD Guidelines for Multinational Enterprises The US Foreign Corrupt Practices Act and the UK Bribery Act Human rights Sustainability strategy UN Global Compact UN Guiding Principles on Business and Human Rights OECD Guidelines for Multinational Enterprises Disaster response Disaster response and contribution program There is no international governance framework Memorandum of Understanding with the Global Logistic Cluster for disaster response Employee relations Rule on Global Employee Relations UN Global Compact UN Guiding Principles on Business and Human Rights OECD Guidelines for Multinational Enterprises ILO Conventions Maritime Labour Convention, 2006 (MLC, 2006) Diversity and inclusion Diversity & Inclusion strategy UN Global Compact UN LGBTI Standards for Business Responsible procurement Rule on Responsible Procurement UN Global Compact A.P. Moller - Maersk Third-Party Code of Conduct UN Guiding Principles on Business and Human Rights OECD Guidelines for Multinational Enterprises ILO Conventions Responsible tax A.P. Moller - Maersk Tax Principles OECD Guidelines for Multinational Enterprises B Team’s Responsible Tax Principles Ocean health Rule on HSE Management UN Global Compact IMO Ballast Water Management Convention IMO MARPOL Convention Annex VI
* Rules are comprehensive and mandatory statements of policy and responsibilities in the A.P. Moller - Maersk central governance system.
Sustainability Report 2018 10 TRANSFORMATION AND OUR BUSINESS
Transformation and our business
The business world is increasingly called upon to use its powers of change and implementation to help solve major societal challenges. A.P. Moller - Maersk focuses on where we have the greatest leverage and potential impact on issues that are material to us.
Our sustainability strategy calls out four areas and approach these issues with a view to where A.P. Moller - Maersk through our business transformation. can pursue solutions and call for others to act. The issues of climate change and inclusive These efforts may result in significant system trade are given special attention in this changes and respond to challenges faced by year’s report. They are issues that will be the global society, and at the same time create fundamentally transformative to how we opportunities for our business. operate. How they develop will impact business The four areas are climate change, inclusive strategy, performance and market conditions trade, food loss and ship recycling, and we globally – for us as well as our supplier and report on progress and developments in all of customer base. these, while also explaining how we understand
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Sustainability Report 2018 12 TRANSFORMATION AND OUR BUSINESS | CLIMATE CHANGE
Towards a breakthrough in climate change
Climate change is one of the world’s most pressing challenges. An effective response will make a difference to how the next decades play out and how the next generations are able to live.
he 2018 report from the Very ambitious targets business growth from emissions is a T Intergovernmental Panel on In 2018, the Executive Board of necessity, and we have set an efficiency NEW TARGETS Climate Change (IPCC) incontrovertibly A.P. Moller - Maersk approved a new target of 60% relative reduction in CO2 states that the effects of climate company ambition for climate change: by 2030 from a 2008 baseline. change cannot fully be prevented, to have net-zero CO2 emissions from With these targets, we are breaking ZERO net-emissions from and today the average global rise in our own operations by 2050.² We do the mould for climate targets and our own operations by temperatures is already 1.0 degree. The not by net-zero refer to off-setting ambitions in the shipping industry. 2050. report also clearly states that to keep CO2 emissions from fossil fuels. By climate change at manageable levels, committing to this target, we believe A decade of learning we need to create a carbon-neutral we will drive the transformation of A.P. Moller - Maersk has for ten years economy by around 2050.¹ the shipping industry towards use of pursued ways to reduce our relative CO2 % This includes what has been termed carbon-neutral fuels. emissions, and had set a target of 60% 60 relative reduction of ‘hard-to-abate’ sectors, of which shipping Based on our experience, we know relative reductions by 2020, using a CO2 emissions by 2030 is one due to its long asset cycles. that efficiency can only keep shipping 2007 baseline. (2008 baseline). A.P. Moller - Maersk is determined to put emissions stable, not reduce or By the end of 2018, our reductions its resources, relationships and leverage eliminate them. Nevertheless, until had reached 47% since 2007. This is not towards abandoning fossil fuels. decarbonisation is achieved, decoupling enough to reach 60% in two years’ time. 2018 RESULTS 41% relative reduction in 2050 SCENARIO CO2 emissions from our Historic emissions Number of vessels Projected emissions 2030 efficiency target Pathway to zero CO2 activities compared to 2008 baseline.
CO2 emissions Mtonnes Growth in our fleet ³
80 Decoupling CO2 from trade 70 growth
60
50 Breakthrough innovations to 40 reach zero CO2 in 2050 30 2050 target: 20 2030 Emissions delivered ZERO 10 by the 2030 CO2 emissions efficiency target 0 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055
1 Global Warming of 1.5ºC, Intergovernmental Panel on Climate Change, 2018. 2 Our target is net-zero CO₂ emissions, because using e.g. biofuels will emit CO₂ when burned on a vessel. However, if the feedstock used to produce the biofuel absorbs CO₂ equal to the emissions produced when burned (and the production process of the fuel is also CO₂-neutral) then specific biofuels can be CO₂ neutral. 3 The 2050 scenario is based on a simulation, which builds on our expectations for the development of our business activities until 2050.
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We knew our 2020 target was a IN BRIEF stretched target, and we are convinced that aiming high has pushed us to do AMBITIONS more than we would have without setting the bar high. To help decarbonise logistics through Our efficiency work to date has innovation, low-carbon allowed us to decouple our emissions offerings to customers from trade growth. We are now and efficiency measures. changing our efficiency target to align Map climate change both target year and baseline with the related risks to IMO strategy for greenhouse gas (GHG) A.P. Moller - Maersk reductions in shipping, aiming for a 60% assets and supply chain. reduction relative to cargo moved by TARGETS 2030, compared to a 2008 baseline. 2018: 60% relative CO2 This means that we will be able to reduction by 2020.* sustain decoupled CO2 emissions from Develop low-carbon our growth, and as a company we are offerings to customers. proud to already be aligned with the IMO industry target. 2019: Net-zero CO2 emissions from own We have reached that mark by operations by 2050. optimising efficiency across our fleet, Efficiency target of 60% with technical retrofittings including relative reduction in CO2 capacity boost, new bulbous bows, new by 2030 (2008 baseline). propellers and engine modifications, Develop approach to and by improving planning and managing risks from optimising networks. Over the last four physical climate change. years alone, we have invested USD 1 billion and engaged 50+ engineers GOVERNANCE each year in developing and deploying Our work on climate energy efficiency solutions. We expect change are governed through the Executive this investment level to be sustained in Board. Work is pursuit of our new targets. coordinated by a cross- Efficiency gains do not, however, solve functional task force. the climate change problem. That can only be achieved through decarbonisation. SDG TARGETS Collaboration towards breakthrough Decarbonisation changes the game completely. Massive innovative solutions and fuel transformation must 7.3 13.1 take place in the next 5-10 years. It is important to understand just how great a challenge this is. Transforming the shipping industry which has run on relatively cheap, heavy fuel for 100 years is not only about how ships must be 17.16 designed in the future and what type of OVERVIEW OF A.P. MOLLER - MAERSK CO2 EMISSIONS engines will power them – safely – on 2018 TARGETS MET? As part of the work on our new climate to purchased ocean services. As a what type of fuel. It is also about building change targets, we established a consequence, out of our total emissions, In full entire new supply chains for these baseline overview of CO2 emissions more than 70% relate to ocean transport, new solutions. All of this breakthrough for our full value chain. This analysis which makes it the natural place for us to innovation will have to take place in showed that 65% of our greenhouse gas focus our efforts in our new CO2 targets. emissions come from our own activities Our strategy to become an integrator DOMINANT DIMENSION the 2020s and is more than any single OF MATERIALITY company can do. We are committed to (scope 1), and of this, 98% of our scope of container logistics and provide 1 emissions come from ocean transport. customers with easy access to end- being a leading actor in this process, but Purchased electricity (scope 2) is only 1% to-end services will necessarily lead Responsibility we call on everyone to engage and invest of our value chain footprint. to increased activity on land. As we Shared value in creating the needed innovation. Our supply chain emissions make progress, our decarbonisation strategy Research and development will be up the remaining 34% (scope 3), and a will also address our land transport and Risk the cornerstone in decarbonising the substantial part of these are related inland assets. shipping industry, and we urge all parties * Note: target closed in 2018
Sustainability Report 2018 14 TRANSFORMATION AND OUR BUSINESS | CLIMATE CHANGE
Shipping“ is crucial to reaching the climate change goals set by companies and countries alike. Through partnerships and innovation, supply chains must reduce their carbon footprint, as a contribution to the Paris Agreement and in Nike’s case to our Moonshot ambition of doubling our business while halving our environmental impact. ” KEITH LAMBERT VP Global Logistics involved to collaborate on incentives development, customer engagement, Zero emissions vessels at Nike and develop innovative solutions that and regulatory advocacy. on the water by 2030 help the industry to effectively tackle In addition, we want to begin a The pursuit of solutions must begin the transformation towards zero- dialogue with cargo owners, regulators, now. Given the 20-25-year lifetime of carbon vessels. A.P. Moller - Maersk will researchers, investors and technology a vessel, we must have the first zero- dedicate resources and efforts towards developers, and together set the carbon and commercially viable vessel research collaborations, technical foundation for a sustainable industry. on the seas by 2030. This should be followed by an initial slow ramping up, allowing maturing of technology and supply chain in order to be able to turn GROWING CUSTOMER INTEREST IN CLIMATE CHANGE around our entire fleet for net-zero carbon emissions in 2050. For many of our largest customers, increasing acknowledgement among attention to sustainability in their these customers that continued and This leaves us and the industry only supply chain is growing. We see our significant CO2 reductions require eleven years to find the right solutions customers making bold company investments. for a positive business case for commitments to significantly reduce Specifically, we see that the number decarbonisation. CO2 emissions from their business, in of customer tender requests including For the next few years, it is very many cases to zero emissions. Currently, climate and other sustainability-related important not to rule out any solutions. 35 of our top 150 customers are using requirements is increasing approx. 30% science-based targets and many other year on year. There are several promising technologies customers are working on targets. By Also, our direct sustainability at various stages of development. All reducing emissions in our operations, collaborations or partnerships with 40 solutions will come with benefits and we can help these customers achieve key clients over the past five years have challenges to be overcome and only by their CO2 goals and ambitions. A 2018 evolved from customers making basic actively partnering, collaborating and customer survey showed us that demands for CO2 emissions data to more undertaking research and development 72% seriously consider sustainability long-term and action-oriented requests parameters when managing their for low CO2 solutions along with tangible will we know which ones will win out. company’s supply chain, pointing to CO2 reduction pilot projects. We are There are several technologies and emissions reductions and low-carbon currently working on offering different fuels being developed these years logistics as their main challenges today. low-carbon solutions to our customers within the areas such as advanced Alongside this dependency, we see an across transport modes. biofuels and hydrogen-based fuels. We are already engaged in research
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and test programmes in some of these technologies, for example sustainable GLOBAL WEATHER biofuels, where we are collaborating Physical impacts of climate change IMPACT with customers and research institutes A total of on development and testing of In their 2018 report, the This work has been pushed further potential future solutions for low- Intergovernmental Panel on Climate by the investment community’s 330bn carbon transportation. Over the coming Change (IPCC) clearly states that the increased focus on and activity USD was the years, we will expand the range of physical effects of climate change level around climate change and its macroeconomic impact solutions we are investigating. This are already here in the form of impacts on businesses seen from a of global weather will prepare us for selecting a few changes in, for example, weather financial risk perspective. disasters in 2017. candidates we will pursue for the first patterns and biodiversity.⁴ This is The growing importance of carbon-neutral vessels. substantiated by the fact that in 2017, climate change to investors is clearly the macroeconomic impact of global demonstrated by The Task force on Delivering on efficiency weather disasters was around USD Climate-related Financial Disclosures We have set a new efficiency target at 330 billion, making 2017 one of the (TCFD). Its recommendations for 60% relative reductions by 2030 with costliest years ever.⁵ corporate reporting on climate a 2008 baseline and meeting it will As part of our response to climate change were published in the second require tremendous efforts. We will be change, A.P. Moller - Maersk works half of 2017. We are already reporting working on a portfolio of solutions for to manage the risks to our assets as against the TCFD framework reaching this target. Energy efficiency is well as the risks to the value of our through the Climate Disclosure a discipline where A.P. Moller - Maersk business, which are caused by the Project (CDP). has excelled for decades, yet we still physical impacts of climate change. have potential to improve. A major contribution will come from replacing older vessels with new and Reporting according to TCFD regions where the value of our more efficient ones, taking advantage The TCFD recommends that business faces the greatest risk, and of our continuous work to optimise companies report on both transition selected two high-risk clusters which hull dimensions, hull shapes, propulsion risks, understood as risks encountered we will investigate more in-depth systems and auxiliary systems, and while working with CO2 reductions, and in 2019 to deliver what will be our in recent years we have consistently physical risks which are risks caused approach to managing risks from demonstrated our ability to design and by changes in weather etc., within the physical climate change. build vessels that perform 15% more categories of governance, strategy, The next step for us is to begin efficiently than our average vessels. risk management and metrics. pilot projects on the ground, to gain a Another large contribution will come detailed understanding of the value from further optimising our network at risk and not least how we can best Governance in terms of both network operations approach managing the risk. There is and voyage execution. Over the next Our climate change targets are part an added complexity to this, given that few years, we will be able to reap of our sustainability strategy which is our assets are always part of a larger the benefits from our investments in owned by the Executive Board. ecosystem, which will also be affected connecting and digitising our vessels. by climate change. For the last part of the reductions Strategy in CO2 emissions, we will rely on Risk management innovation. We have demonstrated Our transition strategy is described in that we are able to innovate and the previous pages of this report. Climate-related risks and opportunities operationalise innovation, and we To understand and plan for protecting are part of the Enterprise Risk intend to continue these efforts. business value from the risks caused Management system reporting to Our 2030 efficiency target is strong by the physical impacts of climate the Executive Board and the Board of enough to ensure that we continue change, we conducted a hot-spot Directors quarterly. to decouple CO2 emission levels from analysis in 2018, estimating the effect growth in trade and volumes shipped. of five climate hazards on ports, other Metrics and targets With this target, we will not exacerbate fixed assets and strategic commodities our contribution to climate change within a 2020–2040 timeframe. The five Read about our strategy and targets while we grow our business, serve hazards are heat stress, floods, cyclones, for decarbonising logistics on the global trade and support job creation. water stress and sea level rise. previous pages. Targets for managing Based on this overview, we have the physical impacts of climate given priority to the geographical change are not available yet.
4 http://www.ipcc.ch/report/sr15/ 5 https://www.munichre.com/topics-online/en/climate-change-and-natural-disasters/natural-disasters/2017-year-in-figures.html
Sustainability Report 2018 16 TRANSFORMATION AND OUR BUSINESS | CLIMATE CHANGE
Working towards carbon-neutral shipping – a pledge and a call to action
° ° 1.5 1.0 degree average Climate change is global warming is the already here threshold for runaway climate change
Shipping is responsible for 2–3% of global emissions⁶
CREATING A PULL TOWARDS ZERO CARBON Efficiency is not enough. Decarbonisation requires massive innovation and fuel transformation, and R&D will be the cornerstone. We are calling on the shipping industry and suppliers to join the journey, and we are committed to lead and invest.
Working to ensure conducive public and private policies for carbon-neutral shipping.
R&D for new technologies, fuels and supply chains.
Engaging customers to accelerate the demand for low-carbon transportation.
6 Third IMO Greenhouse Gas Study 2014.
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by 2050
2030 By 2030, commercially viable zero emissions vessels must be a proven, realistic option.
Sustainability Report 2018 18 TRANSFORMATION AND OUR BUSINESS | TRADE
Making the case for open and inclusive trade
Open trade enables prosperity and growth for people and societies. But these benefits are not accessible to all. A.P. Moller - Maersk wants to be a cornerstone of an inclusive and sustainable global trading system that can help eradicate poverty and deliver decent work for all.
n 2018, we adopted an ambitious set 2018, we have not seen major effects of globalisation. The mutual benefits I of commitments to help multiply the on global trade. But in the coming years, of getting this right are too big to GROWTH AND JOBS benefits of trade (see pages 20–21). we expect that at their current level, squander and the costs of getting it Reducing logistics We will use our capabilities to reduce trade tensions may reduce growth in wrong are unacceptable for present and barriers to trade could complexity in global value chains, containerised trade by around 0.3% future generations. increase GDP by nearly so that more countries and more annually. This is potentially significant in companies can do business simpler, a global market growing only 2–4%. Need for inclusive policies 5% cleaner, faster and cheaper. We will also Allowing open access to markets for adding millions of jobs work to empower small businesses, the Rewriting the rule book on global trade international exporters may have to the global economy.⁹ ‘conveyer belts’ of innovation and job The current trade tensions go to adverse impacts on people if jobs creation, to have better access to the the heart of the multilateral rules- change or disappear. Where these benefits of trade. based trading system, and include impacts have not been countered by disagreements over dispute resolution, inclusive public policies, support for Trade is key to progress investment protection and fair, open trade has been undermined. To Looking ahead to 2030, trade will be market-based competition. There is an retain public support for open trade, it key to achieving the UN Sustainable acceptance that the rule book on global must be combined with inclusive and Development Goals. On average, 137,000 trade needs updating in these areas gender-sensitive policies in areas such people have lifted themselves out of to ensure a level playing field. We are as social protection, education, social poverty every day for the past 25 years.⁷ hopeful that WTO member states will dialogue and decent work. Many of them through the jobs and agree on reforms to ensure a rules- This smart mix of open trade and benefits generated by trade. Without based global trading system that keeps inclusive policies in turn requires a cross-border trade, the real incomes of trade open, market-based and inclusive. rules-based trading system in which the average consumer would be half Much depends on whether the countries have room to decide when what they are today and even less for changes to the trading rules will and how they open up to trade. This the poorest.⁸ By keeping trade open happen through the current system involves balancing the potential adverse in the 21st century, extreme poverty or whether the system as a whole will impacts of open trade on specific may be eradicated for the first time in move away from multilateral solutions. groups with the overall benefits for human history. Nevertheless, the current situation workers, companies and consumers Meanwhile, headlines on global presents a unique opportunity and a of having access to global markets, trade in 2018 have been dominated by pressing need to modernise the trading lower prices, higher wages and more escalating trade tensions. By the end of system to make it fit for the next stage economic vitality.
7 Steven Pinker: Enlightenment Now, 2018 8 Quarterly Journal of Economics (2016), 1113–1180 9 Enabling Trade, Valuing Growth Opportunities, World Economic Forum 2013
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This balance differs from one countries alone by 2030 just to keep up IN BRIEF country to another and requires a with growing populations.¹¹ social contract within each. A modern The debate and ideas for reconciling AMBITIONS SDG TARGETS rules-based trading system is one that the diverging dilemmas and trade-offs accommodates the needs of different are hugely important to the world and We will use our global reach and position to multiply the benefits of trade by reducing countries to strike a balance between to our company. For A.P. Moller - Maersk, complexity, empowering entrepreneurs and opening up and leaving no one behind. the business imperative is clear: to supporting a level playing field for global be sustainable, the global trade and trade that is open, market-based and inclusive. 8.2 9.3 Trade and sustainable consumption consumption patterns on which we base 8.3 TARGETS Past industrial revolutions that our business need to be compatible 8.5 lifted the majority of mankind out of with nature. Shifts in mindsets and 2018: Invest in digital solutions that facilitate extreme poverty in just two centuries,¹⁰ innovative solutions will be necessary trade. Provide support for implementation were powered by fossil fuels. This is to achieve sustainable consumption of the WTO Trade Facilitation Agreement. no longer sustainable. An emerging and growth. We are following the 2019: Connect 50% of global containerised subject in trade debates is sustainable conversations closely and understand trade to digital solutions that reduce 17.10 supply chain barriers by 2025. consumption, often defined as that we have to be ready to contribute 17.16 consumption patterns where human to the solutions. Our work on climate Have small and medium-sized customers activities do not impact the natural change is a major part of this, as are account for 10% of our total revenue and environment beyond what this can the interventions and solutions being 30% of our revenue from e-commerce 2018 TARGETS MET? logistics by 2025. accommodate. developed in our efforts to multiply Help partners build capacity of 100,000 In full The dilemma is that this cannot be the benefits of trade (see next pages). small and medium-sized enterprises, at the expense of inclusive growth. including women-operated businesses, to Shifting consumption patterns, higher engage in cross-border trade by 2025. DOMINANT DIMENSION prices, and slower growth will affect Contribute to trade facilitation reforms in OF MATERIALITY some countries and some groups 30 developing countries by 2025. harder than others. If left unaddressed, Responsibility GOVERNANCE such negative impacts may threaten Shared value the acceptance of policies to address Our commitment to multiplying the climate change. This may particularly benefits of trade is owned by the Executive Risk impact countries that already struggle Board. A task force with key leaders from relevant parts of the business is responsible with mass unemployment. 600 million for setting and achieving the targets. new jobs are needed in developing
10 https://ourworldindata.org/extreme-poverty#note-4 11 https://www.worldbank.org/en/results/2018/02/13/jobs-at-the-core-of-development
Sustainability Report 2018 20 TRANSFORMATION AND OUR BUSINESS | TRADE
Multiplying the benefits of trade – our commitment REDUCE COMPLEXITY As a global integrator of container set new, ambitious targets to deliver empowering small businesses to benefit We will connect logistics, A.P. Moller - Maersk is on three key priorities for making from trade; and supporting reforms committed to multiplying the benefits global trade more inclusive: reducing to level the playing field for inclusive of trade. To achieve this goal, we have complexity in global value chains; global trade. 50% of global containerised trade to digital solutions that reduce supply chain barriers by 2025. REDUCE COMPLEXITY IN GLOBAL VALUE CHAINS
The opportunity: Trade needs to be data sharing creates delays and EMPOWER SMALL simple. By digitising global trade, we can uncertainties in global supply chains. BUSINESSES help remove friction in global supply The cost of such barriers by far exceeds A share of chains, enabling our customers to trade the cost of formal customs tariffs. more. Reducing barriers to trade leads TradeLens allows all actors involved in % to new growth with the potential to add cross-border trade to interact in a simple, 10 of our total revenue more than 20 million new jobs to the secure and real-time environment. This and 30% of our revenue global economy every year.¹² offers significant efficiency gains and from e-commerce new revenue models for all actors in logistics will come from What we are doing: In December the logistics ecosystem. As of January small and medium-sized 2018, A.P. Moller - Maersk and IBM 2019 the solution is actively engaged customers by 2025. announced the commercial availability with more than 100 organisations. This of TradeLens, which is an open and includes over 60 network members We will help neutral industry solution using including nine ocean carriers, three blockchain technology to facilitate inland carriers, 46 worldwide ports and 100,000 global trade. Today’s cumbersome terminals, and nine customs authorities SMEs build capacity and siloed processes for trade spanning the globe. together with partners, documentation, administration and including women- operated businesses, to engage in cross-border trade by 2025.
HELP LEVEL THE GLOBAL LEVEL THE TRADING FIELD TRADING FIELD
We will support The opportunity: The WTO Trade Facilitation Agreement, which came into force last year, is a concrete 30 example of how the world uses the countries in multilateral system to drive progress. implementing the Companies in developing countries pay WTO trade Facilitation Agreement in a particularly high price for informal collaboration with the barriers to trade.¹³ Traffic congestion Global Alliance for Trade and administrative barriers – popularly Facilitation by 2025. known as ‘red tape’ – cause delays that result in additional costs related to What we are doing: As a member of the international business in West storage, inventory, and penalties for Global Alliance for Trade Facilitation, Africa – the Alliance works with exporters and importers. For many, A.P. Moller - Maersk provides its the government and the private in particular small and medium-sized expertise in support of trade facilitation sector to introduce fully automated, enterprises, these costs can make the projects in developing countries. In paperless customs processing. This will difference between trading and not 2018, we have contributed to reform significantly speed up clearance and trading. Trade facilitation reform is key projects in India, Sri Lanka, Morocco, release of goods thereby contributing to making trade cheaper, faster and Ghana and Kenya. In Ghana, for example to a better business environment.¹⁴ more inclusive. – an important hub for regional and
12 Enabling Trade, Valuing Growth Opportunities, World Economic Forum 2013 13 Aid for trade at a glance 2015: reducing trade costs for inclusive, sustainable growth, OECD, WTO 2015 14 https://www.tradefacilitation.org/project/ghana-expedited-clearance-and-release-of-goods-through-risk-based-pre-arrival-customs-processing/
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 21
Empowering entrepreneurs through partnerships Many“ people feel In 2018, A.P. Moller - Maersk became a partner to the SheTrades initiative that on issues like by the International Trade Centre. The social protection, purpose of SheTrades is to enable living standards, women entrepreneurs to access the quality education, benefits of trade, aiming to connect decent work, three million women entrepreneurs fair taxation and to markets by 2021. This is good for environmental inclusion – but it is also just good business. Closing the global economic protection, trade gender gap could add 26% to annual has not helped. global GDP by 2025.¹⁶ Together with A.P. Moller - Maersk SheTrades, A.P. Moller - Maersk will help and other large women entrepreneurs in developing companies have countries engage in trade by sharing our an important EMPOWER SMALL BUSINESSES TO BENEFIT FROM TRADE expertise on transport and logistics with role in helping the women entrepreneurs. to articulate a The opportunity: Small and medium- retaining more value from trade and In 2018, we continued our collaboration sized enterprises (SMEs) are ‘conveyor turning this value into decent jobs. with ConnectAmericas, a social network positive vision belts’ of innovation and job creation. for businesses in the Americas, where for inclusive, 95% of all companies are SMEs and What we are doing: Twill, an online small and medium-sized enterprises sustainable trade. they account for two-thirds of formal digital shipping platform, offers can gain access to customers, suppliers They can also sector jobs. Yet they have much less small and medium-sized companies and investors, receive training on help us travel access to the benefits of trade.¹⁵ If we a one-stop solution to view quotes international trade and commerce, and along the path can empower small businesses in trade, and place bookings instantly, manage access financing opportunities. In 2018, towards policies we can help make economies more related documents, track shipments an A.P. Moller - Maersk training course on inclusive. We foresee that rapid growth and proactively address changes to the logistics had nearly 3,500 registrations and practices in e-commerce will enable more SMEs original plan. Combined with our solutions and 600 graduates. We are working with that ensure trade to connect with global markets. With to digitise trade, stronger customer the International Development Bank supports better the right logistics, this can pave the way segmentation and better e-commerce and other ConnectAmericas partners to lives for all of us. for a new generation of small companies logistics, Twill will help small businesses enable a payment mechanism directly integrated in global trade capable of leapfrog into global trade. on the platform. ” SEAN DOHERTY Head, International Trade and Investment Member of the BENEFITS AND CHALLENGES OF DIGITISATION Executive Committee Commerce and logistics are moving concentration through exponential more closely connected to trade. World Economic Forum towards digitisation. A.P. Moller - Maersk technologies and big data. Protection of data privacy and human is committed to being at the forefront First, the future of work in logistics rights varies greatly across regions, and of this transformation of our industry. will be marked by increased use of we will need to reconcile this with our We are digitising our transactions with new technologies in labour-intensive global commitment to respecting human customers, for example through Twill and functions. This includes introducing rights and the privacy of our customers Tradelens, as described in the examples drone delivery, autonomous vehicles and and their customers in turn. above. A range of different business semi-automated warehouses. We are Third is the potential of exponential models are evolving in our industry gradually introducing new technology technologies to result in ‘winner takes all based on blockchain, asset connectivity in our own operations including vessels, or most’ outcomes. E-commerce is one and transforming data into insights and containers and terminals, making them example. On the one hand, e-commerce potential products. more efficient, safer and using data to can create access for millions of Digitising global trade holds vast generate new value. We are working companies to global markets. On the potential for removing friction, making to find a balanced approach to these other hand, critics are pointing out that economies more inclusive, and for changes (read more on page 34). digital trading platforms can lead to consumers making smarter and more Second, the rise of big data combined excessive market concentration. The sustainable choices. But there are with artificial intelligence and increased challenge will be to ensure that trade obvious challenges. Three areas stand use of sensors in global logistics will see remains open and market-based while out: the future of work in logistics; data concerns over data privacy, algorithmic benefiting from new technologies. privacy and surveillance; and market discrimination and mass surveillance
15 World Trade Report 2016 Levelling the trading field for SMEs, WTO 2016 16 The Power of Parity: How Advancing Women's Equality Can Add $12 Trillion To Global Growth, McKinsey Global Institute 2015
Sustainability Report 2018 22 TRANSFORMATION AND OUR BUSINESS | FOOD LOSS
Reducing food loss – a business opportunity
Working to reduce food loss will create value for a wide range of stakeholders as well as the A.P. Moller - Maersk business.
he issue of food loss and waste benefit from food loss-reducing to establish partnerships to pilot T is positioned right in the nexus solutions. This includes capacity building solutions to the food loss occurring in FOOD LOST between the growth and sustainability to reduce post-harvest loss by improving the production, handling and storage EVERY YEAR priorities of A.P. Moller - Maersk. We harvesting techniques and handling of stages. already transport about 27% of the products, as well as improving framework In 2018, we mapped relevant 350m world’s refrigerated containers and 25% conditions for agriculture, infrastructure organisations for potential partnerships, tonnes due to of the world’s food commodities, and and trade, which will help governments and we signed a memorandum of inadequate storage our business strategy gives priority to fulfil national food loss targets. understanding with the International and delays during the development and growth of our cold Finance Corporation on future transportation. chain business. From a sustainability cooperation for business-driven food point of view, our large market share loss projects at country level. We are and place in the value chain imply “ further pursuing a selected number of opportunities for leverage to reduce We see a great potential global multi-stakeholder partnership food loss, particularly in the stages for help tackling the opportunities. where most food loss is generated: global challenge of food Together with the Rockefeller • the production stage, with 500 Foundation and the agriculture training million tonnes of food lost every loss in partnership with NGO, Technoserve, we are establishing year due to planning and handling A.P. Moller - Maersk, due to pilot projects in Kenya and Nigeria, with issues, followed by an aim to expand our activities in the • the handling and storage stage, their expertise in cold chain food value chain in East Africa and get where 350 million tonnes of food is logistics and wide-reaching closer to the harvest and collection lost every year, due to inadequate network. level. storage conditions and time lags in the transportation phase caused by ” Wide-reaching potential benefits weak organisation of food chains and RAFAEL FLOR With the projected global population poor infrastructure.¹⁷ Director, Food, The Rockefeller Foundation growth in the coming decades, the demand for perishable food is projected What we can do to increase by 20% annually. It is Our commitment to help halve food Furthermore, enhanced capabilities clear that with the current system's loss by 2030 is a new area in our at the production stage, adequate inefficiencies, meeting this demand will sustainability strategy established infrastructure and trade conditions put an even more unsustainable pressure in 2017. We are currently shaping our as well as temperature-controlled on resources such as land and water, activities and growing our insights and transportation can enable landlocked and increase CO2 emissions at a time understanding of the issue. For example, countries to access ocean shipping with where these need to decrease. One way how inadequate food storage and their perishable goods, as they can be to address this challenge is to make the transportation conditions create large- transported with freshness intact to system more efficient and sustainable, scale food loss, particularly in emerging trading ports, even if these are located and we want to contribute to this. markets, and how partnerships can thousands of kilometres away. This If successful, our partnership- contribute to changing this situation. enables producers to participate in based efforts to halve food loss by The ultimate goal is to build global trade. 2030 will have multiple benefits, as capabilities along the supply chain in farmers will have more crops to sell, countries with high prevalence of food Building partnerships and communities will benefit from job loss in the production and transportation Aspiring to create shared value, creation with ensuing local economic stages and enhance their ability to A.P. Moller - Maersk in 2018 worked development.
17 https://www.bcg.com/en-gb/publications/2018/tackling-1.6-billion-ton-food-loss-and-waste-crisis.aspx
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IN BRIEF
AMBITIONS To leverage our services, products and capabilities in order to halve food loss in logistics, and simultaneously enhance our cold chain business and support sustainable development.
TARGETS 2018: Working in partnerships, we will invest in innovations reducing food loss in the supply chain, using our competencies within the establishment of cold chains for transport. 2019: Establish two global partnerships to address loss points in the food supply chain. Develop a metrics framework for food loss contribution and to guide the shared value of our business-related investments.
GOVERNANCE Our commitment to reducing food loss is owned by the Executive Board.
SDG TARGETS
2.1 12.3 2.2
17.16
2018 TARGETS MET?
Partly GETTING INDIAN BANANAS TO EUROPE
India is the world’s largest producer of A.P. Moller - Maersk is working on a The goal is to get the export time DOMINANT DIMENSION bananas with about 30% share of global project together with India’s National below 45 days to allow exports to the OF MATERIALITY production. However, nearly a quarter Research Centre for Banana (NRCB) and EU market. This will open a market of of production is wasted due to lack of farmers in the Theni district in South at least three million tonnes of banana Responsibility infrastructure and transport capability. India. For the first time, the banana export, while at the same time preventing Furthermore, India exports less than 1% trail will be mapped, as the fruit travels the loss of this perishable commodity. Shared value of its production. through a cold chain. Risk
Sustainability Report 2018 24 TRANSFORMATION AND OUR BUSINESS | SHIP RECYCLING
Momentum towards responsible ship recycling in Alang
The journey to transform ship recycling continues with a multi-stakeholder partnership to increase transparency. A significant number of yards in Alang, India are now investing in responsible practices.
espite strong and documented negative impacts of non-regulated placed our supervision teams on the criticism of the environmental, ship recycling on beaches. We chose ground during working hours in the yards D The“ Ship Recycling health and safety conditions on the ship Alang, India, as the location where we working on our vessels. The premise for recycling beaches in Southeast Asia, would work on the ground to prove the doing this was our belief that it is possible Transparency 90% of vessels were still dismantled viability of more options for responsible to bring yards in Alang to comply with Initiative is one of there in 2018.¹⁸ This is the case in spite ship recycling. As part of this process, we A.P. Moller - Maersk’s responsible ship those rare initiatives of several shipowners having policies for wanted to change the way Alang works recycling standard. At all three yards that succeeds responsible ship recycling. A key factor in – both inside the yards and in the wider we have worked with in 2018, regular in marrying the this is the lack of international regulations community. We remain fully committed audit findings against our standard were interests of shippers, on ship recycling because the Hong Kong to investing in changing this very real reduced to just one outstanding within environmental and Convention on ship recycling, established and very difficult problem for the three to six months. The yards did not by the IMO in 2009, still has not entered shipping industry, living up to our values commence the recycling operations until social stakeholders into force, as it has yet to be ratified by and ambitions for this area. the audits proved responsible practices. and responsible the required number of countries. The one remaining finding concerns carriers. In In 2016, A.P. Moller - Maersk embarked Improving fast excessive working hours, a notoriously vessel recycling, on a journey to radically change global A.P. Moller - Maersk has since 2016 sent difficult challenge for global industries knowledge is power ship recycling towards responsible a total of seven vessels for dismantling to work with in Asian countries. The and transparency practices and avoid the high level of in four different yards in Alang and challenge is enhanced by the fact is progress, which that legal migrant workers, who often is why I have high request as many paid hours of work as possible, make up more than 90% of the hopes for SRTI. FAST IMPROVEMENTS Alang workforce. Two years after we sent our first Through a price incentive and a Maersk supervision team on the ground during recycling. ROGER” STREVENS two vessels to Alang under the Maersk Vice President, Global Shree Ram plot V7 audit status (No. of findings) Responsible Ship Recycling Standard, it Sustainability, Wallenius Y.S Investments plot 59 audit status (No. of findings) has been proven that both responsible Wilhelmsen Logistics Baijnath Melaram plot 13 audit status (No. of findings) and commercial ship recycling is possible. When working according to our standards, 120 116 104 the yards we work with are achieving 100 audit results on par with yards in Turkey 80 74* and China. This proves that change is possible provided that the right skills, 60 49* 48 49 40 mindset and investments are in place. 34 15 Several more yards are now approved 20 4 4 1 1 1 1 1 1 1 1 1 1 for bidding on A.P. Moller - Maersk- 0 Nov. Jan. Apr. Jun. Sep. Dec. Feb. Apr. May Jun. Jul. Aug. Oct. owned vessels destined for ship 2016 2017 2018 recycling, and a large number of other Follow-up audits yards are today either compliant with IMO’s Hong Kong Convention or on a A fourth yard, Shree Ram plot 78, worked on the first two vessels we sent to Alang. Audits and improvements took place between Feb ’16 and Sep ’17 and were reported in the 2017 report. journey towards compliance (see table * Amendments to the audit status reported in the 2017 report have been made for November 2016 data on next page). We find that we have at Shree Ram Plot V7 and Y.S. Investments Plot 59. witnessed and helped propel this great
18 Source: www.shipbreakingplatform.org/platform-publishes-list-2018/
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progress in Alang. It does not, however, IN BRIEF change the fact that international legislation will be necessary to create a AMBITIONS level playing field in ship recycling. To radically change the global ship recycling The EU List industry to be dominated The European Union (EU) is set to by responsible practices introduce its own ship recycling safety for the benefit of workers and environmental standards from and the environment the start of 2019. Under these rules, as well as responsible vessels carrying EU flags at the end of yards and shipowners. their life cannot be recycled in yards not TARGETS approved by the EU. Yards approved by the EU will be included in what is known 2018 and 2019: Continue to invest and as ‘the EU List’. work with selected The incentive to get on the EU yards in Alang. List is currently encouraging the The mobile health van began serving the wider Alang area in May 2018. Develop the wider Alang transformation of Alang seen in the area. many yards investing in change (see Drive the development table below). We believe the EU can be transformation we are aiming for. For In late 2017, a survey was carried out of the Ship Recycling a real driver for sustaining investment this reason, we welcomed the launch in to establish gaps in existing health care Transparency Initiative. and upgrading in the whole area by 2018 of the Ship Recycling Transparency services if the needs of the workers and including Indian yards that comply with Initiative (SRTI), in which we participate their families were to be met. It concluded GOVERNANCE EU regulations in the EU List. together with five other shipowners that both general and emergency health The A.P. Moller - Maersk’s The current version of the list and six financial institutions. Two of our care services were sorely lacking. Responsible Ship comprises 23 facilities from within the large-brand customers are active on A.P. Moller - Maersk and partners Recycling Standard is approved by the EU and three non-EU facilities (one in the advisory panel. Indian Red Cross and the Ship Recycling Executive Board. The the US and two in Turkey).¹⁹ The list does Through an annual survey, the SRTI Industry Association (SRIA) established ship recycling project is not yet include Indian yards, however, it encourages all shipowners to report on a mobile health van with a team of overseen by a steering will be updated on an ongoing basis. their ship recycling practices against a professionals that provides general group with an executive In 2018, 11 yards in Alang have comprehensive set of disclosure criteria. health care to all ship recycling sponsor. officially asked to be added to the EU The information collected will form a workers in Alang as well as to the local List. Out of these, two were inspected public database providing transparency community of the wider Alang area. SDG TARGETS and conclusions were not available by and in turn accountability for choices Since May 2018, nearly 10,000 people the end of 2018. We strongly believe made in the dismantling of end of life- from the wider Alang area received free, that transparency in the assessment vessels. The SRTI’s online platform was general health care from the health process is crucial to keep improving launched in December 2018. van, improving access to health services conditions in Alang. significantly. 8.8 14.1 Introducing health services For 2019, developing emergency care Transformation requires to the Alang community will be in focus. We will work with local transparency and engagement Another stated vision for engaging with health sector partners to be able to From the beginning, we understood that ship recycling yards in Alang was to offer basic emergency care services in only by engaging other stakeholders contribute to improving conditions for Alang, and to offer first aid training of 17.16 could we achieve the industry the wider Alang community. the yard workers.
2018 TARGETS MET?
In full TWO-THIRDS OF YARDS IN ALANG INVEST IN RESPONSIBLE PRACTICES
Yards used by Yards cleared for Yards aligned/aligning with Other yards DOMINANT DIMENSION A.P. Moller - Maersk A.P. Moller - Maersk bids Hong Kong Convention OF MATERIALITY As of 31 Dec 2015 0 4 4 / 35 104 Responsibility As of 31 Dec 2016 1 3 17 / 39 87 Shared value As of 31 Dec 2017 3 6 66 / 27 50 Risk As of 31 Dec 2018 4 9 80 / 15 48
Source: Ship Recycling Industries Association (India)
19 Source: https://gcaptain.com/european-list-of-approved-ship-recycling-facilities-updated-with-yards-in-turkey-u-s/
Sustainability Report 2018 26 PROGRESS, ACTIONS AND AMBITIONS
Progress, actions and ambitions
A.P. Moller - Maersk is committed to ensuring that our business practices are safe, responsible and transparent.
In this section, we provide a brief and concise On all other responsibility and risk issues overview of progress, actions and ambitions on in this section, we report across selected key responsible business practices on 11 issues. We categories of disclosure including ambitions; work on these issues by managing risk as well why the issue is important and how it is material; as by living up to the responsibility defined by targets for 2018 (as reported in our 2017 our Core Values and the principles of the UN Sustainability Report); targets for 2019 or ahead, Global Compact on human rights, labour rights, if revised; progress for this year; and governance. environment and anti-corruption. We also connect our work with the relevant UN The issue of personal safety for our SDG targets and indicators. employees merits particular attention because our approach to safety has undergone a thorough review and renewal in 2018.
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 27
Sustainability Report 2018 28 PROGRESS, ACTIONS AND AMBITIONS | SAFETY
Safety: A fundamental shift
Focusing on leadership, organisational capacity, operational controls and employee engagement will propel us forward in the next phase of employee safety.
t the beginning of 2018, the The conclusions and recommendations operational controls in place and with A.P. Moller - Maersk Executive were approved by the Executive Board high levels of employee engagement. A The“ safety of our Board decided to conduct a thorough and the Board of Directors in the review of the company’s safety autumn of 2018, leading to a significant Clear authority, roles, tasks, and employees is performance, as no significant change in our approach going forward, objectives for safety at all levels in the our responsibility improvements had been achieved rebooting our safety efforts to ensure company are and will remain important and focus, and during the past 4–5 years. safety is embedded in all aspects of the parts of the safety transformation the loss of seven The review showed that we had organisation, and involving every part journey. colleagues in 2018 reached a plateau in safety performance, of the business, every employee and all alone, clearly with the frequency of incidents not business processes. Impacts of change come later underlines the improving. More importantly, high- The new safety approach will be rolled consequence events, particularly those Three main elements out from leadership level, starting need for change resulting in fatalities, continued to Moving forward, addressing three January 2019. To guide the process in our safety occur. In the past five years alone, 34 priorities becomes critical: of change, a new corporate safety approach to make colleagues have lost their lives while • Leadership accountability – all function was established in late 2018, sure all employees working for A.P. Moller - Maersk. leaders must be fully and emotionally to formulate the overall safety strategy can go to work not The loss of five colleagues due to engaged in and committed to safety; and to facilitate best practice sharing only feeling safe, a fire on the Maersk Honam in March • Capacity for safe operations – stronger and governance across the company. but being safe. 2018 only underlined the need for focus on ensuring effective controls In 2018, our overall LTIf has increased A.P. Moller - Maersk to reevaluate its for high-potential events, in addition to 1.29 from 0.89 (see side bar). This is safety approach. to ongoing efforts to reduce minor primarily due to a positive change in ” SØREN SKOU As a result, the Executive Board accidents; and safety maturity across our terminals CEO of A.P. Moller - Maersk appointed a safety task force, chaired • Building the right culture for safety where improvements in employee by Vice CEO Claus V. Hemmingsen, – move away from a culture focused engagement have led to increased charged with reviewing and re-thinking almost exclusively on individual actions transparency in the reporting of lost time the company’s approach to safety and and responsibility and more towards injuries. There has also been an increase focusing on making A.P. Moller - Maersk becoming a learning organisation, in the number of terminal facilities fully a Safe Place to Work. with organisational capacity and in scope for reporting on safety. SAFETY PERFORMANCE
Lost-time injury frequency
2018 OVERVIEW OF FATALITIES 1.29 The need for a re-orientation of A.P. Moller - Maersk’s approach were developed and implemented to improve safety across our 0.89 to safety was, as mentioned above, sadly reinforced by a fire container vessels, building on a review of over 3,000 United aboard the Maersk Honam. In addition to the high-level task Nations categories of hazardous materials. force’s work, new guidelines on the stowage of dangerous goods
2018 2017 Business segment Location Description Employed by Ocean At sea Five crew members died as a consequence of a fire in 4 Maersk/ LTIf is lost-time injury frequency per one million man-hours. the forward cargo hold of the vessel. 1 third party The figures above are based on exposure hours for employees Non-ocean Port of Pippavav, Employee at the port’s tyre workshop was struck by debris Contractor in operational scope (see India from exploding tyre and died shortly after. Sustainability Accounting Principles: maersk.com/ Non-ocean Quingdao, China Container assembly factory worker caught and squeezed Maersk business/sustainability/ between trolley and container base plates. sustainability-reports-and- publications/reports).
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 29
Building capacity for safety Through consultation with global Accidents“ should safety experts and best practice organisations within safety, we learned never be allowed that a focus on zero accidents alone is to have a fatal or not a sufficient motivator. A far better permanent injury motivator and guide post is the core as an outcome for belief that safety is not the absence of anyone working for accidents, but the presence of capacity A.P. Moller - Maersk. and effective controls to eliminate as We need to many of the factors contributing to the occurrence of accidents and managing create a working the outcome of an accident. environment and We have previously targeted zero a culture enabling accidents. Going forward, the target us to manage, we communicate and use as motivator react and recover is to make A.P. Moller - Maersk a safe from accidents place to work. We will encourage the without persons elimination of the risk of accidents suffering fatal through designing a safe work place where as many risk factors as possible or life-changing are controlled, and focusing not on who consequences. failed, but on what failed. We will set this course to ensure that ” if and when we do have accidents, the CLAUS V. HEMMINGSEN Vice CEO of organisation is able to ‘fail safely’ so A.P. Moller - Maersk that high-potential events do not result in permanent and life-changing injuries or fatalities. A real-life example of this approach is the safety features in ordinary cars. Our new approach is similar to the existence of seat belts, air bags, reversing alarms, non-skid brake systems etc. In comparison, our previous approach to safety also had some IN BRIEF level of risk control, but relied mostly on instructions to ‘drivers’ focused on SDG TARGETS AMBITIONS WHY IS IT IMPORTANT? not placing the car too close to other objects or not to brake too hard on Our overriding ambition is to ensure Safety at work is a basic human right, and slippery surfaces. that A.P. Moller - Maersk is a safe place workplace conditions directly influence The change in our approach to safety to work. workers as well as their families and does not mean that we discard our communities. Keeping our people safe 8.8 management systems and procedures. is our first and primary responsibility TARGETS They are the backbone of a safe as a company, a core value for us and 2018 TARGETS MET? working environment and are based 2018: an unequivocal expectation from on years of experience and learning. • Zero fatalities our employees, their families and Not met: However, more procedures and rules • Continuous improvement in targets communities. A.P. Moller - Maersk, 7 fatalities instructing people not to get hurt will for lost-time incidents going towards however, still sees fatal accidents not be more effective. zero. occurring as part of our operations. DOMINANT DIMENSION Instead, what we believe will take OF MATERIALITY us further on our safety journey is a 2019: GOVERNANCE non-wavering focus on being a safe New targets for safety will be developed Responsibility place to work, where we see and engage in 2019, aligned with the new approach A new, central safety function was Shared value every one of the people working for to focus on building resilience, capacity established, reporting to the Executive A.P. Moller - Maersk – from deck hands and controls. This still entails the Board. Operational safety management Risk to executives – as continuous learners ambition of no colleagues losing their continues to be the responsibility and sharing the responsibility for all of life working for A.P. Moller - Maersk in of line management directed by the us to return home safely after work. 2019. requirements in the central governance system.
Sustainability Report 2018 30 PROGRESS, ACTIONS AND AMBITIONS | AIR EMISSIONS, SPILLS AND ANTI-CORRUPTION
Air emissions: SOx and NOx
60%. But, without a level playing the increased fuel costs, allowing AMBITIONS field in terms of compliance and customers to predict the actual extra SDG TARGETS Our key ambition is to comply with the enforcement of regulation, the cost of shipping for them at different air emissions regulations and drive competitiveness and profitability of fuel cost scenarios. regulatory enforcement towards a level compliant companies will be hurt. The • Developed new standard operating playing field. International Maritime Organisation’s procedures to ensure that the new, 0.5% global cap on sulphur dioxide blended, compliant fuels will not 3.9 14.1 (SO ) content in fuels for shipping will cause operational problems. TARGETS x enter into force from 1 January 2020. • Invested in scrubbers on a share of 2018 TARGETS MET? 2018: To enable enforcement of the global our vessels. Scrubber technology is a • Maintain or implement solutions cap, the IMO in 2018 decided on a less extensive element of our sulphur Partly that will enable full compliance with carriage ban for non-compliant fuels on cap fuel sourcing strategy, the vast regulatory demands. board vessels. Vessels with scrubbers majority of our container vessels • Develop positions alone and with cleaning the exhaust gasses installed will comply using low sulphur fuels. DOMINANT DIMENSION others to level the playing field. are exempted from this ban. OECD In 2017, we publicly stated that we OF MATERIALITY • Fully comply with regulatory demands. estimates the cost of switching to new, would not rely on this technology, but Responsibility compliant fuels at up to USD 15 billion for the time being we need to secure 2019: per year for the container shipping that we are not overly reliant on a Shared value • Fully comply with regulatory industry.²⁰ Our own estimation is single means of compliance. demands and continue investing around USD 2 billion annually for Risk in maintaining and implementing A.P. Moller - Maersk alone. NOx solutions that will enable this. IMO legislation exists to achieve • Actively engage at international progressive reductions in NO emissions PROGRESS IN 2018 x and regional level to secure a level from ships. It is being implemented playing field across the industry. To prepare for the 2020 global cap, we: through the establishment of NOx • Invested in sufficient supply of emission control areas (NECAs). compliant 2020 fuels through a long- A.P. Moller - Maersk is preparing for WHY IS IT IMPORTANT? term agreement with an independent the 2021 enforcement of NECAs in the Air emissions from ocean-going tank storage operator, making Baltic Sea and the North Sea. shipping have negative effects Rotterdam one of our global hubs for on human health and the natural low-sulphur bunker fuel. Here, we will GOVERNANCE environment. We support regulation store some 20% of our total annual which will significantly reduce these fuel requirements. We are exploring Our work is guided by a steering effects, as evidenced by a 2018 more such options. committee on SOx compliance and survey showing that areas in Europe • Began dialogue with our customers readiness. with regulation-limited sulphur over additional fuel costs, among content in fuel saw a drop in sulphur other things announcing upcoming concentrations in the air by up to bunker surcharges. These will recover
SOX NON-COMPLIANCE CASES 2018
Where What Follow-up
Claes Maersk, Algeciras Fuel sample showed a sulphur content of 0.18% Caused by error in fuel changing in a zone where global cap is at 0.10%. calculation. Size of fine is pending.
Cecilie Maersk, Algeciras Fuel sample showed a sulphur content of 0.11% Caused by error in cleaning process. in a zone where global cap is at 0.10%. Size of fine is pending.
Seago Istanbul, Rotterdam Fuel sample showed a sulphur content of 0.26% Caused by error during fuel switch. in a zone where global cap is at 0.10%. Fine of EUR 1,600.
Maersk Salalah, Shanghai Fuel sample showed a sulphur content of 0.67% Caused by error during fuel switch. in a zone where global cap is at 0.10%. Fine of USD 3,900.
20 Reducing sulphur emissions from ships, OECD/ITF, 2016
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 31
Spills
likelihood in relation to fuel transfers. In preparing, resourcing and testing AMBITIONS terms of environmental impact, vessel response plans. As part of the SDG TARGETS Zero oil spills. collisions carry the highest risk profile implementation of the new standard, along with land-side bulk hydrocarbon an environmental performance and chemical handling. objective was included in our TARGETS terminals’ performance scorecard 2018 and 2019: for the first time. 3.9 14.1 PROGRESS IN 2018 Zero non-contained oil spills above 10 m³. • No oil spills over the 10 m³ limit were GOVERNANCE 2018 TARGETS MET? reported in 2018. WHY IS IT IMPORTANT? • A new global operating standard Our efforts to avoid spills are governed In full Large-scale oil spills may have for Spill Prevention, Control and through the rules and guidance on HSE documented, long-lasting impacts on Response was rolled out across our management stated in the central human health and/or the environment. terminals and inland service depots, A.P. Moller - Maersk governance system. DOMINANT DIMENSION Spill incidents also have the potential to with all locations completing spill OF MATERIALITY cause severe injuries and fatalities. Our risks assessments at their facilities, Responsibility business may suffer financial damages and implementing improvement through fines and recovery operations, plans over the short to medium-term Shared value as well as reputational damage. The to reduce spill risks by strengthening risk of oil spills is highest in terms of prevention controls, and better Risk
Anti-corruption
costs, inefficiencies in our business and • Began work to consolidate existing AMBITIONS ultimately debarment from markets. anti-corruption programmes into SDG TARGETS We aim to eliminate corruption in the one common A.P. Moller - Maersk maritime industry through both multi- Risk of corruption is found primarily in programme in line with the stakeholder collaboration and our our interactions with authorities over company’s strategy, including an own operations. controls and approvals in ports and upgraded compliance programme. border controls, mostly in the shape of The programme is based on current 16.3 17.16 facilitation payments. Risk of corruption compliance standards, including, 16.5 TARGETS in our supply chain is managed but not limited to, risk assessment, 2018 and 2019: through our Responsible Procurement training and communication. 2018 TARGETS MET? Comply with legislation on anti-corrupt programme (see page 32). • Continued membership of the practices, which ultimately translates to Maritime Anti-Corruption Network. In full zero bribery and facilitation payments. • Four cases related to corruption PROGRESS IN 2018 were reported through the • On own ships we have managed, in whistleblower hotline. Three cases DOMINANT DIMENSION WHY IS IT IMPORTANT? close collaboration between crew and have been investigated and closed OF MATERIALITY Corruption undermines social and shore, to decrease facilitation payments as unsubstantiated. One case is Responsibility economic development. It destabilises over the last three years by 99.97%. currently being investigated and dealt the business environment, adds to the • In 2018, 98% of chartered vessels with according to the procedure in Shared value cost of participating in global trade reported monthly, and approximately the whistleblower system. and has significant negative impact on 88% are in compliance with the Risk the markets and countries we operate A.P. Moller - Maersk Anti-corruption GOVERNANCE in. Furthermore, it affects external Policy. These results are achieved confidence (public trust) as well as through clear communication and Our work to combat all forms of company morale. For A.P. Moller - Maersk, collaboration between the vessels, corruption is governed through the non-compliance with legislation on the shipowners and Maersk, making central A.P. Moller - Maersk governance bribery and corruption may lead to it very clear that we support the crew system. legal and reputational risks, extra in avoiding any payments.
Sustainability Report 2018 32 PROGRESS, ACTIONS AND AMBITIONS | RESPONSIBLE PROCUREMENT AND HUMAN RIGHTS
Responsible procurement
• Continued work on subcontractor AMBITIONS WHY IS IT IMPORTANT? conditions, particularly in shipbuilding SDG TARGETS Manage the risk of supplier non- International companies’ purchasing yards and terminal construction sites compliance with our Third-Party Code decisions impact environmental, social with due diligence through audits and of Conduct. and economic conditions around the improvement plans. world. For A.P. Moller - Maersk, the trust in • Conducted focused training on labour our brand and leadership will be damaged, relations through a joint programme 12.6 TARGETS if we are unable to monitor and address with Global Employee Relations team. 2018: our supply chain sustainability risks. • Piloted an assessment approach for 2018 TARGETS MET? • Ensure compliance with Third-Party the supplier category ‘terminals’ at 10 Code of Conduct. terminals in high-risk countries. PROGRESS IN 2018 Partly • Introduce ‘country risk’ as additional criteria for engagement. We focus on suppliers in high-risk We were alerted by a Danish media • Introduce assessment approach to categories and countries in our outlet to a sub-contractor’s working DOMINANT DIMENSION the high-risk category ‘terminals’. transportation and logistics activities. conditions in Mombasa’s port terminal, OF MATERIALITY We engage with approximately 3,000 operated by Kenya Ports Authority, Responsibility The last two targets replace a previous suppliers through due diligence which was not in compliance with target. This change was made as part activities such as audits, self- our third-party code of conduct. Shared value of a re-evaluation of the Responsible assessments, documentation reviews, We investigated the case and are Procurement programme in 2018. and improvement plans. This number addressing the gaps identified. Risk has doubled since 2017, due to the 2019: inclusion of the trucking category. It is As a member of the UN Global Compact • Ensure compliance with Third-Party out of a population of 24,000 suppliers Action Platform on Decent Work in Code of Conduct. with whom we have a contract and a Global Supply Chains, we have signed • Sharpen the focus on risk total population of 72,000 suppliers. six broad commitments on decent work management through ‘risk score’ • Performed 40 audits and 1,029 in global supply chains. methodology. self-assessments of suppliers. • Align supplier due diligence processes • Added high-risk countries to the GOVERNANCE across segments in a consistent high-risk categories as an additional manner. criterion for engagement. Governed through requirements set • Further integrated our pre-qualifier out in the central A.P. Moller - Maersk questionnaire for the trucking category. governance system.
AUDITS AND ASSESSMENTS IN 2018
We engage with suppliers through audits and assessments and establish improvements plans in case of critical and major findings. 2017 numbers in brackets.¹
¹ The numbers for 2017 have Suppliers in the high-risk categories² been restated to reflect the current organisational scope +/-3,000 of reporting, excluding Maersk Oil and Maersk Tankers. Control actions carried out ² The number will vary as the number of categories change. Shipbuilding yard Other Other Pre-qualification This year’s data includes audits audits³ self-assessments assessments trucking companies which were excluded in 2017. ³ Fewer audits compared to 2017 as many equipment and components manufacturers 14 26 1,029 of which 823 for new building projects (14) (48) (478) (257) and manning agencies were audited last year. These audits are valid for two years, or more, depending on the supplier category and hence, Improvement plans established to address critical and major findings Qualified suppliers number of other audits reduced this year. 4 The number of improvement 12 23 142 812 plans are not comparable year on year as the (14) (47)⁴ (238)⁴ (227) companies assessed/audited are not the same.
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 33
Human rights
As a company with a global presence, • Under the Safety of Life at Sea (SOLAS) AMBITIONS we support effective and balanced convention, commercial vessels are SDG TARGETS Ensure that we prevent and address regulation that promotes a global level obligated to assist persons in distress adverse human rights impacts playing field for responsible business. at sea, and governments are obligated associated with our business activities. to facilitate the disembarkation of rescued persons at a safe port. We PROGRESS IN 2018 take pride in meeting our SOLAS 8.5 16.3 TARGETS • Initiated efforts to integrate human responsibility in a manner which 8.7 2018: rights in sustainability governance respects human rights standards. 8.8 • Full integration of human rights in with completion in 2019 in alignment In 2018, our vessels participated in sustainability governance. with expected changes to our two search and rescue missions at 2018 TARGETS MET? governance system. sea rescuing a total of 127 persons. 2019: • Performed forward-looking analysis to An incident involving the Maersk Partly • Anchor human rights due diligence understand how our impact on human Alexander in June 2018 received in the company’s overall governance rights will be affected by external and international attention, as our vessel system. internal transformations. Key areas waited four days for permission to DOMINANT DIMENSION • Continue to close identified gaps in include upholding labour standards disembark the rescued persons. OF MATERIALITY relation to standards for employees in an increasingly fragmented supply • Published our third annual statement Responsibility in our company and in the supply chain; the impact of new technologies under the UK Modern Slavery Act. chain. on the future of work in logistics; and Shared value • Conduct further analysis of human the potential consequences for human GOVERNANCE rights risks related to the digitisation rights of big data analytics, sensors Risk of our business. and artificial intelligence in global Human rights due diligence is part trade digitisation. of our sustainability management • Responded to a joint communication process which is overseen by the WHY IS IT IMPORTANT? from two United Nations Special Executive Board. In addition, human Human rights are a precondition for Rapporteurs on Human Rights rights provisions are embedded into freedom and dignity for people, for rule regarding potential adverse human a number of programmes in the areas of law and for inclusive and sustainable rights impacts of ship recycling. of safety, employee relations, diversity growth on which we depend as a Our statement, which applies the and inclusion, security, responsible business. Respect for human rights UN Guiding Principles on Business procurement and responsible ship is rooted in our values and key to our and Human Rights, is available on recycling (see the table below). licence to operate from employees, our website. The Rapporteur on customers, investors, communities, Human Rights and Toxics included a governments and other stakeholders. statement on the subject in his report National reporting requirements related to the UN Human Rights Council in to human rights are generally on the rise. September 2018.
HUMAN RIGHTS IN THIS REPORT
There are many aspects of our business that touch on human rights. Our work to enhance our human rights due diligence is described on the following pages of this report.
Material issue Human rights at stake Page
Safety The right to life and the right to the highest attainable standard of health. 28–29
Employee relations Human rights principles and standards related to labour, for example freedom of association and collective 34 bargaining, equal treatment, child labour, forced labour, working hours, compensation, privacy, rest and leisure.
Diversity and inclusion The right to freedom from discrimination and the right to family life. 35
Responsible procurement Human rights principles and standards related to labour, see examples above. 32
Ship recycling Human rights principles and standards related to labour, in particular the right to life and 24–25 the right to the highest attainable standard of health.
Air emissions The right to the highest attainable standard of health. 30
Sustainability Report 2018 34 PROGRESS, ACTIONS AND AMBITIONS | EMPLOYEE RELATIONS AND DIVERSITY AND INCLUSION
Employee relations
• Working hours and overtime: The • Third-party staff: People hired AMBITIONS most frequent challenge and a through third parties who work for SDG TARGETS All our employees will be treated continuous focus. In 2018, we made a us for long periods of time. The due fairly in a safe and healthy working policy on working hours specifically diligence assessment has helped us environment with constructive and addressing challenges at our strengthen implementation of our productive working relationships container factory in China. Third-Party Code of Conduct in areas between managers, employees and • Compensation: Cases occur where such as pay and working hours. 8.5 16.3 employee representatives. wage differences depend on 8.7 employment status or nationality. We rolled out a company-wide 8.8 In a few countries, where inflation e-learning programme on Global TARGETS and costs of living are rising rapidly, Employee Relations, which is mandatory 2018 TARGETS MET? 2018 and 2019: salaries may not enable employees to for all employees and covers the Ensure compliance with the meet basic needs. international labour standards that are Partly* A.P. Moller - Maersk governance • Equal treatment: Reports of most salient to our business. Alongside document on Global Employee Relations, employment decisions influenced this, we continued specialised training which is based on internationally by factors such as gender, ethnicity, for employees working with manning DOMINANT DIMENSION recognised labour standards. nationality, religion or sexual agencies, with a focus on our inland OF MATERIALITY orientation were dealt with through service operations. Responsibility internal grievance systems. Our whistleblower system received WHY IS IT IMPORTANT? • Freedom of association: We are present 31 HR-related cases, including cases Shared value A positive relationship with our employees in countries where independent trade related to potential infringements and nurturing diversity is fundamental unions are prohibited by law. We seek of our principles on Global Employee Risk to our success as a business. This begins to honour our principles for employee Relations. These are investigated and with ensuring respect for internationally relations while also complying with dealt with according to the procedure in recognised human rights and labour the law. We have taken steps to the whistleblower system. standards in all our workplaces. increase consistency in the way this is managed locally. GOVERNANCE • Forced labour: We operate in PROGRESS IN 2018 countries where local laws and Employee relations at A.P. Moller - Maersk As due diligence, we carried out a practices may require employees to are governed according to our policy company-wide self-assessment of the obtain approval from their current on Global Employee Relations based compliance with our Rule on Global employer before changing jobs. There on international labour standards. The Employee Relations in 180 entities are also cases where employees are Global Employee Relations Council, * We comply with our governance document on worldwide. Based on the assessment, granted loans by the company. We reporting to the Chief Human Resources Global Employee Relations, we have initiated improvement actions have taken further steps to reduce Officer, oversees compliance. but have identified some instances where practices in the following areas: the risk of bonded labour. must be further examined.
CLOSING TWO FACTORIES NEW TECHNOLOGIES IN THE WORKPLACE
Following thorough evaluation of directed a complaint to the OECD The increase in technological innovation in our industry generates market prospects, Maersk Container National Contact Point (NCP) in Chile. The uncertainty among our employees and trade unions. In 2018, we Industry decided in June 2018 to close complaint argued that the running and established a set of guiding principles to support our approach. its container factory in San Antonio, closure of the factory violated the OECD We believe that by addressing these changes in a proactive Chile. Further, in January 2019 we Guidelines for Multinational Enterprises. manner, technology will enable us to create better and more decided to exit the dry container The alleged violations concerned equal productive jobs for the benefit of the company and our employees. manufacturing business, which meant pay as well as consultation processes We are committed to: closing the factory in Dongguan, China. during the closure. • Timely identification of upcoming technological changes, so that The closures sadly affected the jobs We conducted a review of the we can support our employees in building the skills required. of 3,400 employees. We are committed allegations and found that our running • Proactive and open dialogue with employees and their to taking care of the people that are and closure of the factory complied representative bodies. In 2018, we met with trade union impacted by these difficult decisions with all legal requirements as well as representatives from the International Transport Workers’ and we thank them for their dedication international standards for responsible Federation to openly share and discuss our approach and plans and hard work over the years. business conduct. We presented the for technical innovations in our business. Following the announcement of the outcome of this review to the NCP, and • Ensuring that we have support in place for employees whose closure of the plant in Chile, the trade on that basis respectfully declined the jobs disappear due to the adoption of new technologies. union organising 50% of the employees NCP’s offer of a further mediation. INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 35
Diversity and inclusion
2. Local and leader-led agendas AMBITIONS PROGRESS IN 2018 • The CEO of A.P. Moller - Maersk SDG TARGETS We aspire to create an inclusive We set global targets that help us committed to the European culture where employees from every monitor progress on representation of Roundtable pledge on Inclusion. background can contribute to their gender and nationality in management • Continued development of regional fullest. In doing this, we will be in a (see graphic below). We are not satisfied and brand-owned diversity and prime position to attract people from with the 2018 progress, and expect our inclusion strategies. 5.1 10.2 the widest talent pool, specifically investments in the agenda will positively 3. Engaging our employees in the 5.5 10.3 increasing the gender and nationality impact the results in the future. diversity and inclusion agenda diversity at our senior levels. The current targets are not seen as • Signed up to the UN LGBTI Standards 2018 TARGETS MET? end points, but as steps along the way. for Business as part of our existing We aim to create more micro targets commitment to human rights and TARGETS Partly for specific parts of the employee life established a website with guidance 2018 and 2019: cycle. These include gender recruitment and tools for line management. • Target for representation of women targets, balanced with always hiring • Celebrated International People DOMINANT DIMENSION on the Board of Directors (see graphic the best person for the job, and a target with Disabilities day, our first step OF MATERIALITY below). maternity return rate of 90% (currently in engaging employees globally on Responsibility • Target for representation of women at 73%). Since 2016, we have offered a disability inclusion. and persons from countries that global minimum of 18 weeks’ maternity • Local and regional initiatives rolled Shared value are not in the OECD high-income leave on full pay for all employees, and out by employee networks. countries list (see graphic below). the option to work 20% less hours at • Close to 300 women across the Risk full pay for up to six months within the company engaged through our first year of childbirth or adoption. women’s development programme, WHY IS IT IMPORTANT? which also provides virtual learning It is a basic obligation and a core 1. Inclusive leadership capabilities for its 1000 alumni. element of our values not to • Continued roll-out of workshops discriminate against our employees. focusing on understanding and GOVERNANCE Discrimination bars people from living mitigating unconscious bias across up to their full potential, creates leadership levels. Our Diversity and Inclusion programme inequality as well as less stable and • Developed and prepared 2019 launch is managed through the human prosperous societies. We also want to of a new e-learning programme for resources department. Standards for leverage the competitive advantage all employees. non-discrimination of employees are that diverse teams and inclusive • Delivered unconscious bias training part of the Global Employee Relations cultures can bring to our business. during key restructuring projects governance document. embedding diversity when making people decisions.
TARGETS AND PERFORMANCE ON DIVERSITY AND INCLUSION
2018 2017 Target 2020 ¹ Targets and performance Representation of women1 Representation of persons not from Representation of women include continuing high-income OECD countries1 on our boards2 businesses. 2 A.P. Møller - Mærsk A/S has a number of subsidiary companies that fall under Executives 17% 16% 20% 30% 2 8 the Danish legislative 16% 18% Women Men requirements on gender reporting, and which have all set targets for Senior 14% 18% In 2018, the A.P. Møller - Mærsk A/S Board of the underrepresented 18% 21% Directors consisted of 10 members, of which two gender on the respective Leaders 11% 18% are women (eleven members and three women in Boards of Directors. Of the 2017). The size of the board was reduced by one companies, a portion have member in 2018. The member leaving the board already obtained target Leaders 22% 30% was a woman. The Board set a target in 2015 to representation on the Board, 25% 38% 22% 29% be reached by 2019, at the latest: three women while the remaining continue Board members elected by the Annual General to strive for their targets. See Meeting, if the Board consists of less than twelve the management reports of the respective companies. Senior 29% 45% members. Four women Board members, if the 35% 52% Board consists of twelve or more members. Managers 29% 45%
Sustainability Report 2018 36 PROGRESS, ACTIONS AND AMBITIONS | DISASTER RESPONSE, RESPONSIBLE TAX AND OCEAN HEALTH
Disaster response
services are a key factor. Having • Contributed to the response plan AMBITIONS aid reach the impacted areas more following the earthquake in Indonesia SDG TARGETS To act in accordance with our values quickly and efficiently saves lives. in September, with information on by using our leverage and logistics Our deep knowledge of logistics and the country’s infrastructure and capabilities to support response efforts global presence allow us to deliver ocean freight options, and reserving to large natural disasters and in on this need, and we see it as a clear containers to support disaster relief complex emergencies. responsibility to do so. if needed. 17.6 • After a cholera outbreak in Yemen in 2017, we collaborated with LET TARGETS PROGRESS IN 2018 2018 TARGETS MET? partners in donating four refrigerated 2018 and 2019: Our disaster response efforts are containers to store medical supplies. In full • Participate, as part of the Logistics mainly carried out through the Logistics • Continued to map freight and Emergency Team (LET), in filling Emergency Team (LET) which comprises logistics options to secure the Global operational gaps in case of complex four global logistics and transportation Logistics Cluster’s preparedness in DOMINANT DIMENSION emergencies and large-scale natural companies: UPS, A.P. Moller - Maersk, risk-prone areas. OF MATERIALITY disasters. Agility and DP World. The LET supports Responsibility • Contribute in LET preparedness the Global Logistics Cluster, led by the GOVERNANCE activities such as training and United Nations World Food Programme Shared value knowledge sharing on transport (WFP), which provides emergency The Executive Board decides on and logistics capacity as well as site responses to complex humanitarian activation of support to large-scale Risk access at selected locations. crises and natural disasters. In 2018, natural disasters upon request from A.P. Moller - Maersk: the Global Logistics Cluster. A dedicated • Increased our allocation of time and contact point coordinates requests WHY IS IT IMPORTANT? resources to also respond to human- from the LET to A.P. Moller - Maersk When natural or human-incurred incurred disasters in addition to representatives in relevant locations. disaster strikes, emergency logistics natural disasters.
Responsible tax
internationally help finance education, of this assessment, we began collection AMBITIONS infrastructure and other public services of information regarding tax incentives SDG TARGETS Be a compliant and accountable tax that support sustainable development, throughout the world, and development payer with responsible and transparent local societies, business and trade. We of procedures for reporting of taxes tax practices. recognise the need for companies to paid at country level. support the local economies in which they do business. We operate globally, including in 17.1 TARGETS some countries that are listed as non- 2018 and 2019: cooperative by the EU or other tax PROGRESS IN 2018 2018 TARGETS MET? • Ensure full compliance with tax authorities. We do not engage in tax regulations in all countries where we • Total tax charge in 2018 was avoidance activities. Out of the five In full operate. USD 645 million. countries on the EU list for 2018, we • Continue to engage in dialogue with • Participated in The Tax Dialogues have a Maersk Line Agency and a shore stakeholders on tax matters. organised by Oxfam IBIS, the B Team’s branch for a drill ship in Trinidad & Tobago. DOMINANT DIMENSION • Implement the B Team Responsible responsible tax project, the ICC OF MATERIALITY Tax Principles by 2020 (The B Team is a international Chamber of Commerce GOVERNANCE Responsibility non-profit initiative aiming to catalyse Taxation Commission, and the UN more sustainable business practices). Committee of Tax Experts. Our approach to tax is directed by the Shared value • As a founding signatory of the B A.P. Moller - Maersk Tax Principles Team Responsible Tax Principles, we and governed in line with the rules Risk WHY IS IT IMPORTANT? performed an internal assessment and guidance stated in the central Well-functioning tax systems locally and against the principles. As an outcome A.P. Moller - Maersk governance system.
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 37
Ocean health
• Collaborated with the National AMBITIONS WHY IS IT IMPORTANT? Oceanic and Atmospheric SDG TARGETS As a citizen of the oceans, we will Ocean health is pivotal to the health Administration (NOAA), under the contribute to protecting the health of of nature and people. Higher sea U.S. Department of Commerce, to oceans, and continuously reduce our temperatures and the proliferation of deploy 16 drifter buoys which as part own impacts. plastic waste indicate that ocean health of NOAA’s network of around 1,000 is under threat. We are obligated to buoys collect data for marine and 14.1 17.6 act, as emissions from our activities climate sciences. During 2019, we 14.3 TARGETS contribute to acidification and rising will continue to work with NOAA in 2018: temperatures, and as a citizen of collaboration with the World Ocean 2018 TARGETS MET? • Mature the partnership with the the oceans to contribute to finding Council’s ‘Smart Oceans – SMART World Ocean Council and the science solutions. Industries’ initiative to develop Partly community. a programme to improve data • Explore partnership opportunities in collection from selected areas. PROGRESS IN 2018 the marine plastic litter community. • Joined and launched the UN Global DOMINANT DIMENSION • All vessels are compliant with the • We registered one case of reported Compact Sustainable Ocean Business OF MATERIALITY IMO Ballast Water Management non-compliance with ballast water Action Platform, a three-year project. Responsibility Convention. regulation in Montreal, Canada. The case was related to reporting errors Shared value GOVERNANCE 2019: and we received a fine of USD 9,100. • All vessels are compliant with the • Established collaboration with the Our ocean health activities are Risk IMO Ballast Water Management Ocean Cleanup project, contributing governed through the rules and Convention. around USD 2.0 million in vessel guidance on HSE management in the • Continue collaboration with the services and equipment for the central A.P. Moller - Maersk governance Ocean Cleanup Project. installation of the first full-scale system. Our collaboration with the • Support ocean science research ocean plastic clean-up system, as Ocean Cleanup Project is under the through data collection and well as providing open-top containers sponsorship of the Executive Board. partnerships. for the collected plastic.
HELPING THE OCEAN CLEANUP PROJECT SUCCEED
Over 5 trillion pieces of plastic are estimated to litter all the major ocean basins. The source of this problem is primarily insufficient waste management on land, rivers and sea. Therefore, making the oceans healthy will require a multi-layer solution with a multitude of innovation and change. As responsible citizens of the ocean, we want to contribute to alleviating the problem by assisting in removing the plastic which is already in the oceans. The Ocean Cleanup Project, a non-profit organisation, has developed a 600 m-long floating buoy system with a screen to collect plastic debris for recycling. The first offshore cleaning system was towed and installed by a Maersk Supply Service vessel in the Great Pacific Garbage Patch, located 1,200 nautical miles off the coast of San Francisco. The At the end of 2018, the installment The Ocean Cleanup Project’s long-term patch contains an estimated 1.8 trillion malfunctioned and was towed back to shore ambition is to install at least 60 systems pieces of plastic and covers an area twice with terabytes of data ready to be used to to remove 50% of the Great Pacific the size of Texas. After installation, our develop necessary upgrades. Our vessel Garbage Patch within five years. vessels are further monitoring progress also carried around 2,000 kg of plastic and operations. that had been recovered from the patch.
Sustainability Report 2018 38 PROGRESS OVERVIEW
Overview of targets and progress
MATERIAL Climate change Inclusive trade Food loss Ship recycling Safety Air emissions Spills Anti-corruption Responsible Human rights Employee Diversity and Disaster response Responsible tax Ocean health ISSUE procurement relations inclusion (p. 12) (p. 18) (p. 22) (p. 24) (p. 28) (p. 30) (p. 31) (p. 31) (p. 32) (p. 33) (p. 34) (p. 35) (p. 36) (p. 36) (p. 37)
To help decarbonise A.P. Moller - Maersk To leverage To radically change Our overriding ambition Our key ambition is Zero oil spills. We aim to eliminate To manage the risk To ensure that we All our employees We aspire to create To act in accordance To be a compliant As a citizen of logistics through will use its global reach A.P. Moller - Maersk the global ship is to ensure that to comply with air corruption in the of supplier non- prevent and address will be treated fairly an inclusive culture with our values by and accountable tax the oceans, we innovation, low-carbon and position to multiply services, products recycling industry A.P. Moller - Maersk is emissions regulations maritime industry compliance with our adverse human rights in a safe and healthy where employees from using our leverage and payer with responsible will contribute to offerings to customers the benefits of trade by and capabilities in to be dominated by a safe place to work. and drive regulatory through both Third-Party Code of impacts associated working environment every background can logistics capabilities and transparent tax protecting the health AMBITIONS and efficiency measures. reducing complexity, order to halve food responsible practices to enforcement towards a multi-stakeholder Conduct. with our business with constructive and contribute to their to support response practices. of oceans, and Map climate change empowering loss in logistics, and the benefit of workers level playing field. collaboration and our activities. productive working fullest. In doing this, efforts to large natural continuously reduce related risks to entrepreneurs and simultaneously enhance and the environment own operations. relationships between we will be in a prime disasters and in our own impacts. A.P. Moller - Maersk supporting a level our cold chain business as well as responsible managers, employees position to attract complex emergencies. assets and supply playing field for global and support sustainable yards and shipowners. and employee people from the widest chain. trade that is open, development. representatives. talent pool, specifically market-based and increasing the gender inclusive. and nationality diversity at our senior levels.
60% relative CO₂ We will invest on the Working in partnerships, Continue to invest and Zero fatalities. Maintain or implement Zero non-contained oil Comply with legislation Ensure compliance with Full integration Ensure compliance with Target for Participate, as part Continue to engage Mature the partnership reduction by 2020 scale of millions of we will invest in work with selected Continuous solutions that will spills above 10 m³. on anti-corrupt Third-Party Code of of human rights the A.P. Moller - Maersk representation of of the Logistics in dialogue with with the World Ocean (target closed in 2018). USD in digital solutions innovations reducing yards in Alang. improvement in targets enable full compliance practices, which Conduct. in sustainability governance document women on the Board Emergency Team (LET), stakeholders on tax Council and the science Develop low-carbon that facilitate trade. We food loss in the supply Develop the wider for lost-time incidents with regulatory ultimately translates Introduce country risk governance. on Global Employee of Directors. in cases of complex matters. community. * TARGETS 2018 offerings to customers. will provide dedicated chain, using our Alang area. going towards zero. demands. to zero bribery and as additional criteria for (Due to organisational Relations, which is Targets for emergencies and large- Ensure full compliance Explore partnership support for the full competencies within Initiate the Ship Develop positions, facilitation payments. engagement. and governance based on internationally representation of scale natural disasters. with tax regulations. opportunities in the implementation of the the establishment Recycling Transparency alone and with others, Introduce assessment changes, this target recognised labour women and persons Contribute in LET Meet our commitment marine plastic litter WTO Trade Facilitation of cold chains for Initiative. that are deemed to approach to the high- was postponed until standards. from countries that are preparedness activities to implement the community. Agreement transport. level the playing field. risk category ‘terminals’. 2019.) not in the OECD high- such as training and B Team Responsible Tax All vessels are Fully comply with (The last two targets income countries. knowledge sharing on Principles as a founding compliant with regulatory demands. replace a previous target. transport and logistics signatory. the IMO Ballast This change was made capacity as well as Water Management as part of a re-evaluation site access at selected Convention. of the Responsible locations. Procurement programme in 2018.)
Established new targets Established 2025 Mapped opportunities External, quarterly Started a safety 4 non-compliances with No oil spills above the Maintained status of Performed 40 Performed forward- Carried out a We continue our efforts Increased our Total tax charge One non-compliance on CO₂ reductions and targets. and began building audits of the yards we transformation journey existing legislation for threshold our internal near-elimination of audits and 1,029 looking analysis to company-wide self- to building inclusive allocation of time USD 645 million. with the IMO Ballast decarbonisation. Launched, supported partnerships to increase worked with in Alang with a new safety emissions of SOx from operations guidelines facilitation payments self-assessments of understand how our assessment looking at leadership capabilities and resources to also Conducted gap analysis Water Management Calculated and made and implemented our understanding report only one finding approach developed ocean-going transport. determine as significant on own ships and suppliers. impact on human our compliance with and engaging our respond to human- of our tax practices Convention. PROGRESS 2018 public scope 1, 2 and 3 activities in our areas and to pilot potential against our Responsible to be rolled out from Contributed to the IMO (greater than 10 m³). improved significantly Added high-risk rights will be affected our Global Employee employees on the incurred disasters in compared to the B Supported The Ocean CO₂ emissions from our of commitment to solutions to food loss Ship Recycling leadership level, negotiating a carriage Rolled out a Spill on chartered ships. countries as criterion by transformations Relations in 180 diversity and inclusion addition to natural Team Principles. Cleanup Project in activities. multiply the benefits occurring in production, Standard. starting January 2019. ban as enforcement Prevention, Control and Began work to for engagement. in our surroundings entities worldwide. agenda. disasters. their first large-scale Mapped the company’s of trade. handling and storage Launched the Ship To guide the process of mechanism for 2020 Response Standard to consolidate existing Further integrated pre- as well as in our own Initiated improvement Progress on our targets Participated and deployment of cleaning risks from the physical stages. Recycling Transparency change, a new corporate global cap on sulphur all terminals and inland anti-corruption qualifier questionnaire company. actions based on the on representation contributed to the device for collecting impacts of climate Initiative. safety function was dioxide content in fuel. service locations. programmes into for trucking. Engaged in dialogue assessments. of women on the Logistics Emergency ocean plastics. established in late 2018, Team’s response change. Mobile Health unit Operationally prepared one common Piloted an assessment with United Nations Rolled out a company- Board of Directors Established to formulate the overall to emergencies in operational in Alang, for compliance with the A.P. Moller - Maersk approach for terminals. human rights special wide mandatory and representation partnerships with the safety strategy and to programme rapporteurs on the of women and target Indonesia and Yemen. receiving nearly 10,000 global cap. Conducted focused e-learning module scientific community on facilitate best practice subject of human rights nationalities can be Continued to map people from the wider Continued membership training on labour on Global Employee ocean health. sharing. and ship recycling. found on page 35. freight and logistics Alang area since May of the Maritime Anti- relations. Relations. Joined and launched 2018. Seven fatalities. Corruption Network. Published our third Continued specialised options to secure the UN Global Compact Total LTIf at 1.29. Four cases related annual statement training for employees the Global Logistics Sustainable Ocean to corruption were under the UK Modern who deal with manning Cluster’s preparedness Business Action reported through the Slavery Act. agencies. in risk-prone areas. Platform, a three-year whistleblower hotline. project. Three cases have been Our whistleblower system received 31 cases related investigated and closed to potential infringements of our principles on as unsubstantiated. Global Employee Relations. Beyond this, the One case is still under system did not receive cases related to potential investigation. adverse impacts on human rights.
Net-zero CO₂ emissions Connect 50% of global Establish two global Continue to invest and New targets for safety Fully comply with Zero non-contained oil Comply with legislation Ensure compliance with Anchor human rights Ensure compliance with Target for Participate, as part Ensure full compliance All vessels are from own operations containerised trade to partnerships to address work with selected will be developed in regulatory demands spills above 10 m³. on anti-corruption Third-Party Code of due diligence in the the A.P. Moller - Maersk representation of of the Logistics with tax regulations in compliant with by 2050. digital solutions that loss points in the food yards in Alang. 2019, aligned with the and continue to invest practices, which Conduct. company’s overall governance document women on the Board Emergency Team (LET), all countries where the IMO Ballast Efficiency target of reduce supply chain supply chain. Develop the wider new approach to focus in maintaining and ultimately translates Sharpen the focus governance system. on Global Employee of Directors. in cases of complex we operate. Water Management TARGETS 2019 60% relative reduction barriers by 2025. Develop a metrics Alang area. on building resilience, implementing solutions to zero bribery and on risk management Continue to close Relations, which is Targets for emergencies and in Continue to engage Convention. in CO₂ by 2030 (2008 Have small and framework for food Drive the development capacity and controls. that will enable this. facilitation payments. through risk score identified gaps in based on internationally representation of large-scale natural in dialogue with Continue collaboration baseline). medium-sized loss contribution and of the Ship Recycling This still entails Actively engage at methodology. relation to standards recognised labour women and non- disasters. stakeholders on tax with the Ocean Cleanup Develop approach customers account for to guide the shared Transparency Initiative. the ambition of no international and Align supplier due for employees in our standards. high income OECD Contribute in LET matters. Project. to managing risks 10% of our total revenue value of our business- colleagues losing regional levels to secure diligence processes company and in the nationalities. preparedness activities Meet our commitment Support ocean science from physical climate and 30% of our revenue related investments. their life working for a level playing field across segments in a supply chain. such as training and to implement the research through change. from e-commerce A.P. Moller - Maersk across the industry. consistent manner. Conduct further knowledge sharing on B Team Responsible Tax data collection and logistics by 2025. in 2019. analysis of human transport and logistics Principles by 2020. partnerships. Help partners build rights risks related to capacity as well as capacity of 100,000 the digitisation of our site access at selected SMEs, including women- business. locations. operated businesses, to engage in cross-border trade by 2025. Contribute to trade facilitation reforms in 30 developing countries by 2025.
* As stated in our 2017 sustainability report or as re-scoped during 2018.
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 39
MATERIAL Climate change Inclusive trade Food loss Ship recycling Safety Air emissions Spills Anti-corruption Responsible Human rights Employee Diversity and Disaster response Responsible tax Ocean health ISSUE procurement relations inclusion (p. 12) (p. 18) (p. 22) (p. 24) (p. 28) (p. 30) (p. 31) (p. 31) (p. 32) (p. 33) (p. 34) (p. 35) (p. 36) (p. 36) (p. 37)
To help decarbonise A.P. Moller - Maersk To leverage To radically change Our overriding ambition Our key ambition is Zero oil spills. We aim to eliminate To manage the risk To ensure that we All our employees We aspire to create To act in accordance To be a compliant As a citizen of logistics through will use its global reach A.P. Moller - Maersk the global ship is to ensure that to comply with air corruption in the of supplier non- prevent and address will be treated fairly an inclusive culture with our values by and accountable tax the oceans, we innovation, low-carbon and position to multiply services, products recycling industry A.P. Moller - Maersk is emissions regulations maritime industry compliance with our adverse human rights in a safe and healthy where employees from using our leverage and payer with responsible will contribute to offerings to customers the benefits of trade by and capabilities in to be dominated by a safe place to work. and drive regulatory through both Third-Party Code of impacts associated working environment every background can logistics capabilities and transparent tax protecting the health AMBITIONS and efficiency measures. reducing complexity, order to halve food responsible practices to enforcement towards a multi-stakeholder Conduct. with our business with constructive and contribute to their to support response practices. of oceans, and Map climate change empowering loss in logistics, and the benefit of workers level playing field. collaboration and our activities. productive working fullest. In doing this, efforts to large natural continuously reduce related risks to entrepreneurs and simultaneously enhance and the environment own operations. relationships between we will be in a prime disasters and in our own impacts. A.P. Moller - Maersk supporting a level our cold chain business as well as responsible managers, employees position to attract complex emergencies. assets and supply playing field for global and support sustainable yards and shipowners. and employee people from the widest chain. trade that is open, development. representatives. talent pool, specifically market-based and increasing the gender inclusive. and nationality diversity at our senior levels.
60% relative CO₂ We will invest on the Working in partnerships, Continue to invest and Zero fatalities. Maintain or implement Zero non-contained oil Comply with legislation Ensure compliance with Full integration Ensure compliance with Target for Participate, as part Continue to engage Mature the partnership reduction by 2020 scale of millions of we will invest in work with selected Continuous solutions that will spills above 10 m³. on anti-corrupt Third-Party Code of of human rights the A.P. Moller - Maersk representation of of the Logistics in dialogue with with the World Ocean (target closed in 2018). USD in digital solutions innovations reducing yards in Alang. improvement in targets enable full compliance practices, which Conduct. in sustainability governance document women on the Board Emergency Team (LET), stakeholders on tax Council and the science Develop low-carbon that facilitate trade. We food loss in the supply Develop the wider for lost-time incidents with regulatory ultimately translates Introduce country risk governance. on Global Employee of Directors. in cases of complex matters. community. * TARGETS 2018 offerings to customers. will provide dedicated chain, using our Alang area. going towards zero. demands. to zero bribery and as additional criteria for (Due to organisational Relations, which is Targets for emergencies and large- Ensure full compliance Explore partnership support for the full competencies within Initiate the Ship Develop positions, facilitation payments. engagement. and governance based on internationally representation of scale natural disasters. with tax regulations. opportunities in the implementation of the the establishment Recycling Transparency alone and with others, Introduce assessment changes, this target recognised labour women and persons Contribute in LET Meet our commitment marine plastic litter WTO Trade Facilitation of cold chains for Initiative. that are deemed to approach to the high- was postponed until standards. from countries that are preparedness activities to implement the community. Agreement transport. level the playing field. risk category ‘terminals’. 2019.) not in the OECD high- such as training and B Team Responsible Tax All vessels are Fully comply with (The last two targets income countries. knowledge sharing on Principles as a founding compliant with regulatory demands. replace a previous target. transport and logistics signatory. the IMO Ballast This change was made capacity as well as Water Management as part of a re-evaluation site access at selected Convention. of the Responsible locations. Procurement programme in 2018.)
Established new targets Established 2025 Mapped opportunities External, quarterly Started a safety 4 non-compliances with No oil spills above the Maintained status of Performed 40 Performed forward- Carried out a We continue our efforts Increased our Total tax charge One non-compliance on CO₂ reductions and targets. and began building audits of the yards we transformation journey existing legislation for threshold our internal near-elimination of audits and 1,029 looking analysis to company-wide self- to building inclusive allocation of time USD 645 million. with the IMO Ballast decarbonisation. Launched, supported partnerships to increase worked with in Alang with a new safety emissions of SOx from operations guidelines facilitation payments self-assessments of understand how our assessment looking at leadership capabilities and resources to also Conducted gap analysis Water Management Calculated and made and implemented our understanding report only one finding approach developed ocean-going transport. determine as significant on own ships and suppliers. impact on human our compliance with and engaging our respond to human- of our tax practices Convention. PROGRESS 2018 public scope 1, 2 and 3 activities in our areas and to pilot potential against our Responsible to be rolled out from Contributed to the IMO (greater than 10 m³). improved significantly Added high-risk rights will be affected our Global Employee employees on the incurred disasters in compared to the B Supported The Ocean CO₂ emissions from our of commitment to solutions to food loss Ship Recycling leadership level, negotiating a carriage Rolled out a Spill on chartered ships. countries as criterion by transformations Relations in 180 diversity and inclusion addition to natural Team Principles. Cleanup Project in activities. multiply the benefits occurring in production, Standard. starting January 2019. ban as enforcement Prevention, Control and Began work to for engagement. in our surroundings entities worldwide. agenda. disasters. their first large-scale Mapped the company’s of trade. handling and storage Launched the Ship To guide the process of mechanism for 2020 Response Standard to consolidate existing Further integrated pre- as well as in our own Initiated improvement Progress on our targets Participated and deployment of cleaning risks from the physical stages. Recycling Transparency change, a new corporate global cap on sulphur all terminals and inland anti-corruption qualifier questionnaire company. actions based on the on representation contributed to the device for collecting impacts of climate Initiative. safety function was dioxide content in fuel. service locations. programmes into for trucking. Engaged in dialogue assessments. of women on the Logistics Emergency ocean plastics. established in late 2018, Team’s response change. Mobile Health unit Operationally prepared one common Piloted an assessment with United Nations Rolled out a company- Board of Directors Established to formulate the overall to emergencies in operational in Alang, for compliance with the A.P. Moller - Maersk approach for terminals. human rights special wide mandatory and representation partnerships with the safety strategy and to programme rapporteurs on the of women and target Indonesia and Yemen. receiving nearly 10,000 global cap. Conducted focused e-learning module scientific community on facilitate best practice subject of human rights nationalities can be Continued to map people from the wider Continued membership training on labour on Global Employee ocean health. sharing. and ship recycling. found on page 35. freight and logistics Alang area since May of the Maritime Anti- relations. Relations. Joined and launched 2018. Seven fatalities. Corruption Network. Published our third Continued specialised options to secure the UN Global Compact Total LTIf at 1.29. Four cases related annual statement training for employees the Global Logistics Sustainable Ocean to corruption were under the UK Modern who deal with manning Cluster’s preparedness Business Action reported through the Slavery Act. agencies. in risk-prone areas. Platform, a three-year whistleblower hotline. project. Three cases have been Our whistleblower system received 31 cases related investigated and closed to potential infringements of our principles on as unsubstantiated. Global Employee Relations. Beyond this, the One case is still under system did not receive cases related to potential investigation. adverse impacts on human rights.
Net-zero CO₂ emissions Connect 50% of global Establish two global Continue to invest and New targets for safety Fully comply with Zero non-contained oil Comply with legislation Ensure compliance with Anchor human rights Ensure compliance with Target for Participate, as part Ensure full compliance All vessels are from own operations containerised trade to partnerships to address work with selected will be developed in regulatory demands spills above 10 m³. on anti-corruption Third-Party Code of due diligence in the the A.P. Moller - Maersk representation of of the Logistics with tax regulations in compliant with by 2050. digital solutions that loss points in the food yards in Alang. 2019, aligned with the and continue to invest practices, which Conduct. company’s overall governance document women on the Board Emergency Team (LET), all countries where the IMO Ballast Efficiency target of reduce supply chain supply chain. Develop the wider new approach to focus in maintaining and ultimately translates Sharpen the focus governance system. on Global Employee of Directors. in cases of complex we operate. Water Management TARGETS 2019 60% relative reduction barriers by 2025. Develop a metrics Alang area. on building resilience, implementing solutions to zero bribery and on risk management Continue to close Relations, which is Targets for emergencies and in Continue to engage Convention. in CO₂ by 2030 (2008 Have small and framework for food Drive the development capacity and controls. that will enable this. facilitation payments. through risk score identified gaps in based on internationally representation of large-scale natural in dialogue with Continue collaboration baseline). medium-sized loss contribution and of the Ship Recycling This still entails Actively engage at methodology. relation to standards recognised labour women and non- disasters. stakeholders on tax with the Ocean Cleanup Develop approach customers account for to guide the shared Transparency Initiative. the ambition of no international and Align supplier due for employees in our standards. high income OECD Contribute in LET matters. Project. to managing risks 10% of our total revenue value of our business- colleagues losing regional levels to secure diligence processes company and in the nationalities. preparedness activities Meet our commitment Support ocean science from physical climate and 30% of our revenue related investments. their life working for a level playing field across segments in a supply chain. such as training and to implement the research through change. from e-commerce A.P. Moller - Maersk across the industry. consistent manner. Conduct further knowledge sharing on B Team Responsible Tax data collection and logistics by 2025. in 2019. analysis of human transport and logistics Principles by 2020. partnerships. Help partners build rights risks related to capacity as well as capacity of 100,000 the digitisation of our site access at selected SMEs, including women- business. locations. operated businesses, to engage in cross-border trade by 2025. Contribute to trade facilitation reforms in 30 developing countries by 2025.
Sustainability Report 2018 40 DATA AND ASSURANCE | PERFORMANCE DATA
Performance data
A.P. MOLLER - MAERSK CONTINUING OPERATIONS DISCONTINUED OPERATIONS
2018 2017 2018 2017 2018 2017 Social performance Our employees
Number of employees (FTEs) 84,404 85,667 80,220 75,814 4,184 9,853
Women in leadership (% based on headcount) 25% 23% 25% 26% 10% 16%
Gender – female/total (% based on headcount) 27% 26% 27% 28% 8% 10%
Target nationalities in leadership (% based on headcount) 37% 31% 37% 40% 12% 9%
Target nationalities/total (% based on headcount) 70% 69% 71% 74% 23% 40%
Fatalities (headcount) 7 7 7 6 0 1
Lost-time injury frequency (based on exposure hours) 1.29 0.89 1.32 0.94 0.67 0.52 Environmental performance Energy consumption
Fuel oil (1,000 tonnes) 12,017 10,369 11,970 10,296 47 73
Gas fuels (1,000 tonnes) 17 369 17 17 0 352
Other fuels (1,000 tonnes) 118 160 118 109 0 51
Electricity (1,000 MWh) 732 816 725 700 7 116
Energy consumption (total, TJ) 498,209 449,578 496,185 427,428 2,024 22,150
Greenhouse gas (GHG) emissions (1,000 tonnes CO2 eq)
GHG emissions 39,165 35,981 39,004 33,787 161 2,194
Direct GHG emissions (scope 1 GHG Protocol) 38,826 35,579 38,667 33,442 159 2,137
Indirect GHG emissions (scope 2 GHG Protocol) 339 402 337 345 2 57
Other air emissions
SOx (1,000 tonnes) 615 531 615 530 0 1
NOx (1,000 tonnes) 955 826 951 818 4 8
Other resource consumption
Waste (1,000 tonnes) 340 272 336 254 4 18
Water (1,000 m3) 2,256 2,971 2,206 2,616 50 355
Spills (hydrocarbon)
>10 m3 (number of spills) 0 0 0 0 0 0 Economic performance (USD million) Revenue 39,019 30,945 39,019 30,945 n/a n/a
Profit/loss before depreciation, etc. (EBITDA) 3,806 3,532 3,806 3,532 n/a n/a
Capex 2,876 3,599 2,876 3,599 n/a n/a
Tax for the year 645 1,191 386 219 259 972
Financial scope. Covered by the A.P. Moller - Maersk Generally Accepted Accounting Policies and controlling guideline. Operational scope. Covered by the Generally Accepted Accounting Policies. Described in the Generally Accepted Accounting Principles – data from other sources than the financial and operational scoped data. Since 2017 gender and nationality data is reported by headcount, previously by FTE. See our Sustainability Accounting Principles at https://www.maersk.com/about/sustainability/reports
2017 data includes performance data for continuing operations and discontinued operations (Maersk Oil, Maersk Drilling and Maersk Supply Services). Maersk Oil is not part of sustainability reporting for 2018. Maersk Drilling and Maersk Supply Service continue to be classified as discontinued operations and are included in this report with data presented on aggregate level.
A.P. Moller - Maersk INTRODUCTION STRATEGY AND GOVERNANCE TRANSFORMATION AND OUR BUSINESS PROGRESS, ACTIONS AND AMBITIONS PROGRESS OVERVIEW DATA AND ASSURANCE 41
COMMENTS ON 2018 PERFORMANCE DATA
Social performance Our employees
Increase in total number of employees is due to the acquisition of Hamburg Süd.
The increase in target nationalities in leadership for A.P. Moller - Maersk is due to different entities that we are reporting on. The entities for 2018 have a steady number of target nationalities and fewer non-target nationalities at this level, therefore the % of target nationalities has increased. Further comments on our performance on diversity and inclusion, along with our targets and performance on representation of women on the Board of Directors and representation of women and persons from countries that are not in the OECD high-income countries list, can be found on p. 35.
LTIf has increased mainly due to a positive change in safety maturity across our terminals where improvements in employee engagement have led to increased transparency in the reporting of lost time injuries. There has also been an increase in the number of terminal facilities fully in scope for reporting on safety. More details about our safety performance can be found on pages 28–29. Environmental performance Energy consumption
Fleet of vessels has grown 8% due to the acquisition of Hamburg Süd. Increase in fuel oil is also caused by more vessel days deployed and the addition of new services.
No material change in natural gas consumption from continuing operations as compared to 2017.
Increase in other fuels consumption for continuing operations due to improved reporting processes for our terminal facilities.
Increase in electricity consumption from continuing operations due to the acquisition of Hamburg Süd as well as improved reporting processes for our terminal facilities.
Increase in energy consumption (total, TJ) is due to the increase in fuel oil consumption.
Greenhouse gas (GHG) emissions
Increase in GHG emissions is due to increases in energy consumption.
98% of our scope 1 emissions come from the operations of our fleet. Increase in direct GHG emissions is due to increase in fuel oil consumption.
Decrease in indirect GHG emissions is partly due to decrease in electricity consumption.
Other air emissions
SOx is produced from the combustion of heavy fuel oil. Increase in SOx emissions is due to increases in fuel oil consumption.
NOx is produced from the reaction of nitrogen and oxygen gases in the air during combustion of fuels. Increase in NOx emissions is due to increases in fuel oil consumption.
Other resource consumption
Increase is mainly due to changed methodology for calculating waste generation on our vessels (see Accounting Principles 2018). 2017 and 2018 numbers are non-comparable.
Decrease in water consumption for continuing operations is primarily due to improved reporting processes in two of our terminals.*
Spills (hydrocarbon)
No spills above the threshold of >10m³. Economic performance
Financial data is taken from the audited Annual Report of A.P. Moller - Maersk. The annual accounts and independent auditors’ report can be found at http://investor.maersk.com/
* Two of our terminals accounted for approximately 1/3 of the reduction in water consumption for continuing operations.
There is a decrease in all indicators for discontinued operations due to the sale of Maersk Oil.
Sustainability Report 2018 42 DATA AND ASSURANCE | ASSURANCE
Independent assurance report
To the Stakeholders of A.P. Møller - Mærsk A/S Understanding reporting and measurement methodologies A. P. Møller - Mærsk A/S engaged us to provide limited assurance on the data Data and information need to be read and understood together with the and information described below and set out in the Sustainability Report of accounting principles https://www.maersk.com/about/sustainability/reports, which A.P. Møller - Mærsk A/S for the year ended 31 December 2018. Management are solely responsible for selecting and applying. The absence of a significant body of established practice on which to draw to evaluate and measure Our conclusion non-financial information allows for different, but acceptable, measurement Based on the procedures we have performed and the evidence we have techniques and can affect comparability between entities and over time. obtained, nothing has come to our attention that causes us not to believe that data and information in the A.P. Møller - Mærsk A/S Sustainability Report for Work performed the year ended 31 December 2018 are without any material misstatements and We are required to plan and perform our work in order to consider the risk of have been prepared, in all material respects, in accordance with the accounting material misstatement of the data and information. In doing so and based on policies as stated on https://www.maersk.com/about/sustainability/reports. our professional judgement, we: • Conducted interviews with management at corporate and Brand level This conclusion is to be read in the context of what we say in the remainder of responsible for the sustainability strategy, management and reporting; our report. • Performed an assessment of materiality and the selection of topics for the 2018 A.P. Møller - Mærsk A/S Sustainability Report and comparison to the What we are assuring results of a media search; The scope of our work was limited to assurance over data and information in the • Read and evaluated reporting guidelines and internal control procedures A.P. Møller - Mærsk A/S Sustainability Report for the year ended 31 December 2018. at corporate level and in two major Brands regarding the data to be consolidated in the 2018 Sustainability Report; Professional standards applied and level of assurance • Conducted analytical review of the data and trend explanations submitted We performed a limited assurance engagement in accordance with International by all Brands and Business Units to A.P. Moller - Maersk Accounting & Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements Controlling for consolidation; other than Audits and Reviews of Historical Financial Information’. A limited • Evaluated internal and external documentation to determine whether assurance engagement is substantially less in scope than a reasonable assurance information in the 2018 Sustainability Report is supported by sufficient evidence. engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response Management’s responsibilities to the assessed risks; consequently, the level of assurance obtained in a limited Management of A.P. Møller - Mærsk A/S is responsible for: assurance engagement is substantially lower than the assurance that would • Designing, implementing and maintaining internal control over information have been obtained had a reasonable assurance engagement been performed. relevant to the preparation of data and information in the Sustainability Report that are free from material misstatement, whether due to fraud or error; Our independence and quality control • Establishing objective accounting principles for preparing data and information; We have complied with the Code of Ethics for Professional Accountants issued • Measuring and reporting data and information in the Sustainability Report by the International Ethics Standards Board for Accountants, which includes based on the accounting principles; and independence and other ethical requirements founded on fundamental • The content of 2018 A.P. Møller - Mærsk A/S Sustainability Report. principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The firm applies International Our responsibility Standard on Quality Control 1 and accordingly maintains a comprehensive We are responsible for: system of quality control including documented policies and procedures • Planning and performing the engagement to obtain limited assurance about regarding compliance with ethical requirements, professional standards and whether data and information in the 2018 A.P. Møller - Mærsk A/S Sustainability applicable legal and regulatory requirements. Our work was carried out by an Report are free from material misstatement, whether due to fraud or error; independent multidisciplinary team with experience in sustainability reporting • Forming an independent conclusion, based on the procedures we have and assurance. performed and the evidence we have obtained; and • Reporting our conclusion to the Stakeholders of A.P. Møller - Mærsk A/S.
Copenhagen, 21 February 2019
PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab CVR no. 3377 1231
Mogens Nørgaard Mogensen Gert Fisker Tomczyk State Authorised Public Accountant State Authorised Public Accountant mne21404 mne9777
A.P. Moller - Maersk 43
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We welcome any questions, comments or Editor-in-Chief suggestions you might have to this report and Annette Stube our performance. Please send your feedback to: Editor A.P. Moller - Maersk Lene Bjørn Serpa Esplanaden 50 1098 Copenhagen K Project Lead Denmark Malene Higham Nyegaard Att: Sustainability Additional COP content can be found on our Writer website: https://www.maersk.com/about/ You can also send an email to: Eva Harpøth Skjoldborg sustainability [email protected] Design and layout https://www.maersk.com/about/sustainability Extrasmallagency
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EXTERNAL REPORTING FOR A.P. MOLLER - MAERSK
A.P. Moller - Maersk has tailored the external Presentations tailor-made An independently assured financial reporting towards the needs of for investors and the Sustainability Report is published our different stakeholders with two annual financial markets are also by A.P. Moller - Maersk and covers publications. uploaded every quarter at all its material sustainability The Annual Report focuses on maersk.com. issues. The Sustainability website the detailed legally required A.P. Moller - Maersk also hosts a Capital https://www.maersk.com/about/ information, whereas the Annual Markets Day on a regular basis. sustainability provides additional information Magazine focuses on providing The Interim Reports, presentations and on the UN Global Compact requirements and an overview of key developments during the webcasts can be found on our Investor Relations describes how A.P. Moller - Maersk fulfils these year. The publications can be read individually website investor.maersk.com. (Maersk COP), as well as A.P. Moller - Maersk’s or combined depending on our stakeholders’ The Board of Directors of A.P. Møller - Mærsk accounting principles regarding sustainability. interests. A/S continues to consider the “Recommendations The Annual Report and the Annual Magazine The Annual Report is available electronically for Good Corporate Governance” put forward by contain forward-looking statements on in English at investor.maersk.com. NASDAQ OMX Copenhagen. expectations regarding the achievements and A.P. Moller - Maersk also Further annual good corporate governance performance of A.P. Moller - Maersk. Such produces Interim Reports for information is available in the statutory annual statements are subject to risks and uncertainties, each of the first three quarters corporate governance statement; cf. section as various factors, many of which are beyond the of the financial year, and a 107, item b, of the Danish Financial Statements control of A.P. Moller - Maersk, may cause actual summary report for Q4 is included in the Act covering the financial period 1 January to results and development to differ materially Annual Report. 31 December. from the expectations contained therein.
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