ON A SUSTAINABLE COURSE - Hamburg Sud

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ON A SUSTAINABLE COURSE - Hamburg Sud
Sustainability Report 2016/2017

       ON A
SUSTAINABLE
    COURSE

    Kapitel Sustainability Report 2016/2017   01
ON A SUSTAINABLE COURSE - Hamburg Sud
02   Sustainability Report 2016/2017 Kapitel
ON A SUSTAINABLE COURSE - Hamburg Sud
Kapitel Sustainability Report 2016/2017   03
ON A SUSTAINABLE COURSE - Hamburg Sud
04   Sustainability Report 2016/2017 Contents
ON A SUSTAINABLE COURSE - Hamburg Sud
Contents

Foreword                                07
Introduction                            10
Compliance                              22
Energy and emissions                    28
Environment                             42
Employees                               48
Quality                                 60
Supply chain                            66
GRI Content Index                       74
Sustainable Development Goals           83
Glossary                                84
Imprint                                 85

                    Contents Sustainability Report 2016/2017   05
ON A SUSTAINABLE COURSE - Hamburg Sud
06   Sustainability Report 2016/2017 Foreword
ON A SUSTAINABLE COURSE - Hamburg Sud
Foreword

Dear Business Partners,                            the floors of our dry container newbuilds, and            102-10
Colleagues, and Readers,                           have not recorded any oil spills throughout               102-14
                                                   the entire reporting period. You can find out
Today, you are holding in your hands Hamburg       more about these successes in the chapters
Süd’s second Sustainability Report prepared in     “Energy and emissions” and “Environment.”
accordance with the Global Reporting Initia-
tive (GRI) guidelines. One month before the        Sustainability is an indispensable part of our
end of the reporting period, on December 1,        corporate philosophy and for us means rec-
2017, Hamburg Süd became part of the market        onciling economic efficiency, environmental
leader Maersk Line through an acquisition deal.    protection, and social responsibility based on
Although Hamburg Süd will continue to operate      stable economic development. We will continue
in the markets as a commercially independent       to leverage our scope for action in pursuit of
brand, belonging to a new corporate family will    these aims as we move forward. For example,
inevitably entail significant changes. The most    we will organize the pre- and on-carriage of
important of these in the context of this report   containers to and from the ports in the most
is that in the future Hamburg Süd ships will be    environmentally friendly way possible in those
operated by Maersk Line – with development         cases where our customers entrust us with this.
and management of the fleet being controlled       Hamburg Süd will still organize these intermodal
from Copenhagen already since April 2018.          transports independently as part of the new
Accordingly, the definition of efficiency and      parent company. Independent assessments of
environmental targets for ships and con-           our sustainability performance show us that
tainers will in the future also lie with Maersk    we are on the right track. Most recently, the
Line. This report therefore does not contain       Carbon Disclosure Project, to which we have
any broader objectives; instead it focuses on      reported voluntarily for several years, gave us
what has been achieved to date, which with         an above-average rating. EcoVadis awarded
regard to our central sustainability objectives    us the highest possible “Gold” rating for the
is consistently positive. We have been able to     second time. Dialog and critical discussion with
further reduce the CO2e emissions of our fleet     our stakeholders also help us to continuously
in terms of transportation work, are now using     develop our commitment to greater sustainabil-
almost exclusively fast-growing bamboo for         ity. As with the first report, they have once again

                                                                              Foreword Sustainability Report 2016/2017   07
ON A SUSTAINABLE COURSE - Hamburg Sud
102-10       played a major role in helping us to identify the    2017, we grew faster than the market did, and
     102-14       key issues and sharpen the content of the re-        the bottom line for our container activities was
                  port. We would like to thank them for their input.   a profit in the double-digit million range. This is
                                                                       a step in the right direction, though the prof-
                                                                       it was less than satisfactory given the capital
                         We want to continue to                        invested. As part of A.P. Moller-Maersk, the
                       provide our customers with                      world’s largest container shipping company,
                                                                       we are excellently positioned to exploit future
                        the excellent service they
                                                                       opportunities, while at the same time Hamburg
                        know and expect from us.
                                                                       Süd will remain commercially independent.
                     In doing so, we will continue to
                     advocate sustainable solutions                    A central task not only for us but for all contain-
                            as we go forward.                          er shipping lines is to anticipate future regu-
                                                                       lations and legal requirements and, wherever
                                                                       possible, to participate in the development of
                  Although global overcapacities in container          global solutions. For example, we contribute
                  shipping continued to put pressure on freight        to the process initiated by the International
                  rates in the period under review, we are look-       Maritime Organization (IMO) to define uniform
                  ing ahead with confidence. In the financial year     emission standards. We accept that the ship-

08   Sustainability Report 2016/2017 Foreword
ON A SUSTAINABLE COURSE - Hamburg Sud
Dr. Arnt Vespermann,                 Frank Smet,                          Jakob Wegge-Larsen,
Chief Executive Officer (CEO)        Chief Commercial Officer (CCO)       Chief Financial Officer (CFO)
Hamburg Süd                          Hamburg Süd                          Hamburg Süd

ping industry also has a responsibility to make         tical logistics. As a leading provider of refriger-        102-14
its fair contribution to reducing global emissions      ated container transports, we have upgraded
of greenhouse gases and air pollutants – espe-          our equipment to meet the strict guidelines
cially as in our case higher efficiency and lower       of Good Distribution Practice (GDP) for the
consumption pay off both ecologically and eco-          transportation of pharmaceutical products. Our
nomically. Combating climate change is one of           customers can now also rely on our expertise
the most urgent ecological tasks of our time. In        in this area. See page 64 for more information.
addition, the globally binding, lower sulfur limits     Together with our customer Electrolux, we had
for marine fuels used at sea will have a positive       also launched a project to reduce sulfur dioxide
effect on air quality from 2020. It will be import-     emissions while a ship is in port. Read on page
ant to ensure global compliance with the stricter       40 how we carried out a fuel switch about a
limits through controls and other measures.             year ago in Iquique, Chile. We are also proud
Discussions at the national level concerning            that the Marine Training Center we co-founded
bans on diesel vehicles in major German cities          in Tarawa, Kiribati, has been training seafarers
show that the issue of emissions is high on the         for half a century now. To date some 5,000
political agenda and in the public awareness.           people have learned their trade here, many
                                                        of whom we have recruited as qualified crew
Apart from numerous challenges, the last two            members. This unique project, from which
years have seen just as many successes. For             both sides benefit, is presented on page 58.
example, we were able to confirm our very good
punctuality record and continued to be among            In the current year, we hope to sustain our
the best liner shipping companies worldwide             positive economic development and once
in terms of schedule reliability. This is what          again provide our customers with the excellent
customers expect from a quality carrier. At the         service they know and expect from us. In doing
same time, we further expanded our range of             so, we will continue to advocate sustainable
services and successfully positioned ourselves          solutions as we go forward – in this respect,
in the important growth market of pharmaceu-            too, Hamburg Süd will remain Hamburg Süd.

Yours,

    Dr. Arnt Vespermann                   Frank Smet                      Jakob Wegge-Larsen
            (CEO)                            (CCO)                               (CFO)

                                                                                    Foreword Sustainability Report 2016/2017   09
ON A SUSTAINABLE COURSE - Hamburg Sud
INTRODUCTION
Sustainability management at Hamburg Süd            Page 12
Engagement with stakeholders                        Page 12
Materiality analysis                                Page 15
Company profile                                     Page 15

10    Sustainability Report 2016/2017 Introduction
Introduction Sustainability Report 2016/2017   11
Introduction – utilizing potentials
and ensuring sustainability
     102-11        Sustainability management                            Sustainable management is an integral part
     102-12        at Hamburg Süd                                       of Hamburg Süd’s corporate identity. This
     102-16                                                             is reflected in our commitment to partners
     102-43        Successful and sustainable corporate man-            and employees and in our long-term, sound
     102-50        agement go hand in hand at Hamburg Süd.              business policy, which is geared toward long-
     102-54        Our aim is to continuously improve our sus-          term sustained growth. At the same time, we
                   tainability performance and further develop our      are innovative and leverage forward-looking
      103-2        sustainability management. As early as 2014, a       technologies also in the interests of sustain-
      overall      separate staff unit was set up for this purpose,     ability. Our economic principles are closely
                   which reports directly to the Executive Board        linked to our ethical guidelines. The latter
                   and implements and promotes the associated           are laid down in our Principles of Social and
                   processes. One example is the comprehensive          Ecological Responsibility, our code of conduct
                   environmental controlling framework introduced       and our environmental, safety, and quality
                   in 2011, which systematically collects and ana-      policy. Together with our management sys-
                   lyzes all consumption and emission data, thus        tems, they form the general framework for our
                   revealing potential for improvement. Cooper-         operational activities and strategic decisions.
                   ation with the various specialist departments
                   and the regions is of central importance here.       Open and transparent communication on our
                   The Sustainability Staff Unit is also an important   performance and the associated challenges and
                   link to the outside world: through cooperation       progress are also part of our comprehensive sus-
                   in initiatives and contact with our stakeholders,    tainability management. This report for 2016 and
                   it brings important topics into the company          2017 therefore documents Hamburg Süd’s sus-
                   and promotes exchange and cooperation.               tainability performance for the second time. This
                                                                        report has been prepared in accordance with the
                   We introduced an integrated management               GRI Standards: Core option. We also look at the
                   system as a central instrument for ensuring          United Nations’ Sustainable Development Goals
                   the quality and environmental compatibility of       (SDGs), to which we refer for the first time in this
                   our performance back in the 1990s. Quality           report. The 17 objectives are each defined more
                   management to DIN EN ISO 9001 and envi-              precisely through several action-oriented sub-
                   ronmental management to DIN EN ISO 14001             goals. Although primarily aimed at government
                   are supplemented by the International Safety         organizations, companies can also contribute
                   Management Code (ISM Code). The regulations          to one or several of these objectives, depending
                   adopted by the International Maritime Orga-          on their field of activity. In a first step, we iden-
                   nization (IMO) stipulate binding measures for        tified which SDGs this applies to for Hamburg
                   the organization of safe ship operation and aim      Süd and assigned them to the topics we have
                   not only to protect people on board but also         reported on (see table on page 83). For better
                   to protect the marine environment. By apply-         orientation, we have also integrated the SDG
                   ing the precautionary principle, the systems         symbols into the report at the appropriate points.
                   serve to anticipate risks and to prevent detri-
                   ments to human health and the environment.
                                                                        Engagement with stakeholders

                                                                        We foster continuous engagement with our
                                                                        stakeholders as a matter of course. The feed-
                                                                        back and suggestions we receive from regular
                                                                        personal dialogs as well as in the context of
                                                                        our association work and our commitment to
                                                                        various initiatives deliver valuable input. This
                                                                        may take the form of working group meetings

12   Sustainability Report 2016/2017 Introduction
Introduction Sustainability Report 2016/2017   13
102-40        for example in the Association of German                    that have touchpoints with Hamburg Süd to
     102-42        Shipowners (Verband Deutscher Reeder –                      participate. A total of 104 persons respond-
     102-43        VDR) and the World Shipping Council (WSC),                  ed to this request, who can be assigned to
     102-46        or lectures at universities and conferences.                nine stakeholder groups: employees, owners,
                   In addition, we are in close contact with our               customers, suppliers, business & cooperation
                   customers at all times – at the meetings and                partners, politicians & administrative repre-
                   in the working groups of the Clean Cargo                    sentatives, representatives from education &
                   Working Group (CCWG), for example, we                       research, associations & initiatives, and NGOs.
                   regularly work together on devising methods                 In addition to 36 representatives from external
                   and solutions to further improve environ-                   target groups, 68 employees from all regions
                   mental protection in container shipping.                    and all hierarchy levels took part – including
                                                                               crew members of three ships, who tend to
                   In preparation for this report, in addition to the          focus on different aspects than their shore-
                   regular dialog, we again conducted a target-                based colleagues, as experience has shown.
                   ed online survey to identify the topics that our            All participants were asked to evaluate the
                   stakeholders consider to be material in the                 importance of previously identified sustainabil-
                   sustainability context. In order to obtain as               ity topics first individually and then to priori-
                   broad and diverse an opinion as possible, we                tize them against each other. The topics were
                   asked representatives from all major groups                 selected by an internal project group headed

                                      30.5 %                                               19.5 %
                                 Customers                                                 Suppliers

                                                                                           11 %
                                                                                           Business/cooperation partners

                                                                                           5.5 %
                                       8.3 %                                               Politicians, authorities,
                                        Other                                              administrative representatives

                                       8.3 %                                               2.8 %
                                     Owners                                                Education, science and research

                                       5.6 %                                               8.3 %
                                       NGOs                                                Associations/initiatives

                   36 external stakeholders took part in our survey (difference to 100 % due to rounding).

                                      14.7 %                                               16.2 %
                                                                                           Shore – Global heads/
                              Sea – Ratings
                                                                                           regional managers

                                      10.3 %
                  Sea – Operational level

                                      11.7 %                                               25 %
                         Sea – Ship board                                                  Shore – Senior managers
                             management

                                        8.8 %                                              13.2 %
                       Shore – Specialists                                                 Shore – Managers

                   In addition, 68 employees from all regions responded to our questions (difference to 100 % due to rounding).

14   Sustainability Report 2016/2017 Introduction
Identified Material Aspects                          Material internally             Material externally              102-47

Anti-corruption                                                •                                 •
Anti-competitive Behavior                                      •                                 •

Energy                                                         •                                 •

Biodiversity                                                                                     •

Emissions                                                      •                                 •

Effluents and Waste                                                                              •

Employment                                                     •

Occupational Health and Safety                                 •

Training and Education                                         •

Diversity and Equal Opportunity                                •

Nondiscrimination                                              •

Supplier Social Assessment                                                                       •

Customer Privacy                                               •                                 •

Socio-economic Compliance                                      •                                 •

by the Corporate Communications depart-              of particular importance to our employees,                       102-2
ment, taking internal and external evaluations       or they are directly related to pressing global                  102-7
of sector- and company-specific aspects into         tasks such as combating climate change.                          102-46
account as well as overarching global chal-
lenges and trends. In addition, respondents          There were no significant changes in the
were asked to state other topics they consider       scope and within the limits of the topics shown
relevant and to formulate their expectations         compared with the previous reporting period.
regarding what the Sustainability Report should
deliver. The responses of all participants were
weighted equally in the evaluation. The results of   Company profile
the survey decisively influenced the topics dealt
with in this report. However, compared to the        Hamburg Süd is one of the world’s leading
last survey conducted in 2014, there has been        providers of liner shipping services and is
only a very slight shift in the priority ranking.    represented by its own offices and agencies in
                                                     more than 100 countries. It has a global pres-
                                                     ence of some 6,500* employees at sea and
Materiality analysis                                 ashore who ensure that our customers benefit
                                                     from tailor-made logistics solutions. Founded
The results of the stakeholder survey were           in Hamburg in 1871, we are today an interna-
transferred to the materiality matrix. In a next     tionally active logistics service provider that
step, the relevance of the individual topics for     offers services which extend far beyond pure
Hamburg Süd as a company was compared;               and simple transportation by sea: our portfolio
finally, the Executive Board also validated the      also includes pre- and on-carriage transports
list of identified topics. Some aspects were         by rail, truck, or inland waterway as well as
given a greater weighting, providing they met        comprehensive services from official clear-
the following conditions: they are essential         ance to customs formalities. In 2017, Hamburg
for Hamburg Süd’s competitiveness and thus           Süd transported 4.69 million TEUs (2016:
its long-term success, they represent a chal-        4.39 million) with 116 container ships (2016:
lenge for the entire shipping industry, they are     121) and through its services generated sales
                                                     *Includes employees on parental leave, as of Dec. 31, 2017.

                                                                                   Introduction Sustainability Report 2016/2017   15
102-2        revenue of 5.42 billion US dollars. In the 2017      into Hamburg Süd at the beginning of 2018. In
      102-6        reporting period, the company has for the first      addition to classic dry cargo, we mainly trans-
      102-7        time prepared its annual financial statements        port cooled goods as one of the world’s leading
                   in accordance with IFRSs; the revenue figures        providers of refrigerated container shipments.
                   also relate exclusively to container activities.     However, Hamburg Süd also ships large-scale
                   In container liner shipping, Hamburg Süd             break-bulk and project cargo as well as haz-
                   also operates under its Brazilian subsidiary         ardous goods. The core trades include traffic
                   Aliança in addition to its own-name brand.           to and from South America; Aliança is also the
                   In the reporting period, the Chilean compa-          leader in Mercosur traffic between the South
                   ny CCNI also belonged to the brand family;           American states and cabotage traffic along
                   however, this company was incorporated fully         the Brazilian coast. Hamburg Süd’s network

     102-44        Material Aspects
                   Very important

                                                     Economic

                                                     Environmental

                                                     Social
                   Material externally

                                                                                                     Sustainable materials

                                                                                        Resource consumption ashore

                                                                      Noise emissions from ships
                   Important

                                                                                     Empty container transports

                                         Important                                                                           Material

16   Sustainability Report 2016/2017 Introduction
of over 90 liner services connects all conti-            ment of all our own ships and also looked after             102-2
                nents and the world‘s most important ports.              all our newbuilds and conversions. From 2018,               102-6
                                                                         these tasks will be taken over by our new owner             102-10
                Another business segment is tramp shipping, in           Maersk Line or its subsidiaries. The Hamburg
                which we transport dry and liquid bulk goods             Süd family also includes Hamburg Süd Trav-
                under the three brand names Rudolf A. Oetker             el Agency, which specializes in planning and
                (RAO), Aliança Bulk, and Furness Withy with              handling business travel but also offers its
                bulk carriers and product tankers. During the            expertise for private travelers. However, be-
                period under review, Columbus Shipmanage-                cause this field of activity and the sales revenue
                ment GmbH was responsible for the crewing,               generated is not part of the core business of
                technical management, and materials manage-              Hamburg Süd, it is not included in this report.

      These topics are of equal importance to internal
      and external stakeholders.
                                                                                                    Oil spillages
                                                                 Ship efficiency                    Occupational health
                                                                                                    and safety

                                                                         Data privacy
      Ship recycling                     Air emissions           Anti-corruption

                                          Fair competition

                    Occupational health and safety (supply chain)

                   Intact cargo                                                     Sound business policy
                                                   Equal opportunity/
                                                   nondiscrimination
                                                                                   Compliance
         Innovative           Reefer containers
       technologies              (efficiency)

                                                             Conservation of species and habitats

                                                             Punctual services
                            Training and education

                                                     Customer service

                                                                 Social benefits

                                                                           Reconciling career and family

internally                                                                                                 Very important

                                                                                                  Introduction Sustainability Report 2016/2017   17
102-5        Hamburg Süd as part of the Oetker Group (until November 30, 2017)
     102-18

                                                                Dr. August Oetker KG
                                                                                                                               Advisory Board of
                                                                Group Executive Board:               Advisory, control, and   Dr. August Oetker KG
                                                         Richard Oetker, Dr. Albert Christmann,          veto function
                                                            Dr. Ottmar Gast, Dr. Niels Lorenz

                                                                       Shipping
                                      Beer and        Sparkling
                        Food         nonalcoholic     wine, wine                         Banking          Other interests
                                      beverages       and spirits   Hamburg Süd-
                                                                       Group

                                                                      Executive Board:
                                                                Dr. Ottmar Gast (Chairman),
                                                                     Dr. Heino Schmidt,            Advisory and supervisory Advisory Board of the
                                                            Dr. Arnt Vespermann, Frank Smet,      function, appointment and Hamburg Süd Group
                                                                      Peter Frederiksen            dismissal of members of
                                                                    (until June 30, 2017)            the Executive Board

                    his organizational chart was valid until November 30, 2017. The acquisition of Hamburg Süd by Maersk Line took
                   T
                   effect on December 1, 2017. The new Hamburg Süd Executive Board is made up of Dr. Arnt Vespermann (CEO),
                   Frank Smet (CCO), and Jakob Wegge-Larsen (CFO).

                   Memberships of associations and initiatives
     102-13

                                ICCO
                   Box Club – International Council
                     of Containership Operators

                   Memberships at management level.

                   Commitment at project level or in working groups.

     102-10            On December 1, 2017, one month before the end of the reporting period, Maersk Line’s ac-
                       quisition of Hamburg Süd was approved. As announced, the operational functions will
                       be integrated and in the first months of 2018 this has successfully progressed, for ex-
                       ample to ship management, but also to logistics, network, marine operations, and pro-
                       curement. Wherever possible and foreseeable, we point out changes in this report, some
                       of which have already taken place. You can find out more about this not only in the in-
                       dividual chapters, but also in the Foreword by the Executive Board on page 07.

18   Sustainability Report 2016/2017 Introduction
Hamburg Süd
                                                                                                     at a glance
 4,686,000                                                                                                                               102-7

TEUs

                                                                                        >250
                                                                                        offices

                                                                                        approx.   6,500
                                                                                        employees
                   5.42
             USD bn revenue*

                                                                       171
                                                                          ships**

   582,554
   containers

                                                                                                       >90
                                                                                                       services

* The revenue figures relate only to the container business.
** In addition to 116 container ships, this figure also includes bulkers and tankers.

                                                                                          Introduction Sustainability Report 2016/2017    19
Locations
Hamburg Süd and its subsidiaries are represented with some 250 offices in over
100 countries worldwide, more than 100 of them company-owned. The company’s
organizational units are subdivided into five regions.

102-4

                                                                                                   U
                                                                                                 RE

                          Region North America (RNA)                                    Hamburg
                            Canada
                            USA
                                                           Morristown
          RN

                 A

                                                           Miami
  Region Caribbean and
  Latin America West Coast (RCW)

     Aruba               Curaçao               Jamaica
     Bahamas             Dom. Republic         Martinique
     Barbados            Ecuador               Mexico
     Belize              El Salvador           Nicaragua
     Bolivia             Guadeloupe            Panama
     Chile               Guatemala             Peru
     Colombia            Guyana                Puerto Rico              São Paulo
     Costa Rica          Haiti                 Trinidad and Tobago
     Cuba                Honduras              Venezuela

                                      RC
                                              W
                                                                                    Region South America
                                                                        RSE         East Coast (RSE)

                                                                                     Argentina
                                                                                     Brazil
                                                                                     Paraguay
                                                                                     Uruguay

20      Sustainability Report 2016/2017 Introduction
Region Europe (REU)

 Algeria              Denmark        Iceland     Lebanon       Poland               Switzerland
 Austria              Egypt          India       Lithuania     Portugal             Syria
 Bahrain              Estonia        Iran        Malta         Qatar                Tunisia
 Bangladesh           Finland        Ireland     Morocco       Russia               Turkey
 Belarus              France         Israel      Netherlands   Saudi Arabia         United Arab Emirates
 Belgium              Germany        Italy       Norway        Slovenia             United Kingdom
 Cyprus               Greece         Kuwait      Oman          Spain
 Czech Republic       Hungary        Latvia      Pakistan      Sweden

                                               Hong Kong

       Region Asia Pacific (RAP)

        American Samoa              New Caledonia
        Angola                      New Zealand
        Australia                   Papua New Guinea
        Cambodia                    Philippines
        China                       Samoa
        Congo                       Singapore
        Cook Islands                South Africa
        Fiji                        South Korea
        French Polynesia            Sri Lanka
        Hong Kong                   Taiwan
        Indonesia                   Thailand
        Japan                       Tonga
        Malaysia                    Vietnam

                           RA
                                P

                                                                     Introduction Sustainability Report 2016/2017   21
COMPLIANCE
Anti-corruption                                   Page 24
Fair competition                                  Page 26
Data privacy and data security                    Page 26

22    Sustainability Report 2016/2017 Compliance
Compliance Sustainability Report 2016/2017   23
Compliance – binding basis for
our actions
      103-1       Compliance with applicable laws and regula-
      103-2       tions – whether domestic, foreign or suprana-
      103-3       tional – forms the basis of our business policy                                                   88 %
      419-1       and determines our actions. We expect the
                  same of our partners and, of course, of each                                   $
                  of our employees. Our Principles of Social
                  and Ecological Responsibility, our code of
                  conduct and our safety, environmental, and
                  quality policy set out this mission accord-
                  ingly. Because only if we act in compliance
                  with the law and in a trustworthy manner               o date, 88 % of the national companies and business
                                                                        T
                                                                        units have been analyzed for corruption risks.
                  can we build positive and mutually beneficial
                  business relationships and partnerships that
                  secure Hamburg Süd’s long-term success.               possible consequences, but also to tackle the
                                                                        root causes of corruption. Risk assessments
                  In order to ensure global compliance with             of individual regional companies and business
                  statutory requirements at all times, Hamburg          units are conducted on an as-needed basis
                  Süd has established a compliance management           and reveal where potential risks and scope for
                  system that operates independently of the rest        optimization lie – 35 such assessments have
                  of the organization. The Compliance Officer at        been carried out to date. With the exception of
                  the Hamburg location reports directly to the          so-called facilitation payments, which are some-
                  Executive Board and is supported worldwide            times expected in ports and on canal passages
                  by some 50 Compliance Coordinators in the             to expedite handling, no significant risks were
                  regions and at our subsidiaries. They are the         identified. Together with other market partici-
                  first point of contact for staff seeking assistance   pants, we develop strategies to counter such
                  and advice in warding off possible breaches of        demands (see also the paragraph after next).
                  the law. The Compliance Officer is also the first
                  person to whom any violations within Hamburg
                  Süd or by our agencies, suppliers, and service
                  providers should be reported. This contact            HQ                                              100 %
                  may, of course, also be made anonymously.
                                                                        HQ/REU                                          99 %
                                                                        HQ/REU                                         97 %
                  With the exception of the cases mentioned in
                                                                        RAP                                             99 %
                  the section “Fair competition” (see page 26), no      RAP                                             99 %
                  fines or nonmonetary sanctions were imposed
                                                                        RCW                                           96 %
                  on Hamburg Süd during the reporting period                                                      85 %
                                                                        RCW
                  for noncompliance with laws and regulations.
                                                                        RNA                                             100 %
                                                                        RNA                                             99 %

      103-1       Anti-corruption                                       RSE                                             99 %
                                                                        RSE                                            95 %
      103-2
      103-3       Corrupt business practices have no place at
                                                                             Governance Body Members
      205-1       Hamburg Süd and contradict our understand-
                                                                             Management
      205-2       ing of a sustainable corporate policy. They
                                                                             Specialists (incl. coordinators)
                  endanger free competition and can cause
                  lasting harm to the reputation of the companies
                  involved. That is why we work continuously at          nti-corruption training is compulsory for all Hamburg
                                                                        A
                                                                        Süd employees. The participation rate is correspond-
                  various levels not only to sensitize our employ-      ingly high. (For the abbreviations of the regions see
                  ees to the issue and make them aware of the           page 20/21.)

24   Sustainability Report 2016/2017 Compliance
Regardless of their position and activity, all of                                                               102-12
our shore-side employees undergo manda-                                                                         102-13
tory online anti-corruption training. In mari-                                                                  103-2
time operations, risks and best practices are                                                                   103-3
communicated within the scope of regular                 Hamburg Süd has been involved in the                   205-2
officers’ briefings. All personnel, including        Maritime Anti-Corruption Network since 2013 –
the Executive Board, are made aware of                 for a maritime economy free of corruption.
­Hamburg Süd’s anti-bribery and anti-corruption
 policy, which has been in force since 2013.
                                                     Among other things, Hamburg Süd is partici-
Hamburg Süd has also been actively involved in       pating in the Suez Canal “Say No” campaign
the Maritime Anti-Corruption Network (MACN)          launched in 2015 and has played a pioneering
since 2013 in an effort to tackle these problems     role here. The MACN analysis shows that the
across the industry. This global initiative works    situation on the ground has improved signifi-
toward the vision of a maritime industry free of     cantly in the interim. The ships of all participat-
corruption. To this end, members identify best       ing shipping companies pass through the canal
practices and take collective action to combat       without delays or other disruptions. Demands
illegal personal benefits. To address not only the   for cigarettes, for example, have fallen just as
symptoms but also the root causes of corrup-         sharply as threats of violence against ships and
tion, MACN cooperates closely with govern-           crews. This shows that joint, decisive action
ments and various international organizations.       is an effective way of combating corruption.

                                                                               Compliance Sustainability Report 2016/2017   25
92 %

                                                                         he “Competition Compliance” online training was
                                                                        T
                                                                        introduced in the reporting period. Most of the
                                                                        employees for whom the training is obligatory have
                                                                        already completed it.

                                                                        is closely involved in the self-assessment of
                                                                        these cooperation agreements with competi-
                                                                        tors and therefore acts as a governance body.

                                                                        In the period under review, six legal actions
                                                                        were brought against Hamburg Süd – in some
      103-1       Fair competition                                      cases in concert with other market partici-
      103-2                                                             pants – concerning anti-competitive behavior
      103-3       Fair competition is important because it ad­          or violations of antitrust law. Three of these
      206-1       vances the entire market. Hamburg Süd                 actions have already been discontinued or
                  therefore naturally respects prevailing anti-trust    settled without a fine, and in another, a deci-
                  legislation. In order to embed our principles,        sion was taken to impose a low five-figure fine.
                  which are anchored in the company’s code of           The other two investigations are ongoing.
                  conduct and in our safety, environmental, and
                  quality policy, in the daily work of our employ-
                  ees, we introduced an online training course          Data privacy and data security
                  in the reporting period entitled “Competition
                  Compliance.” With the help of this tool, selected     Digitalization is also progressing apace in ship-
                  groups of employees receive training on issues        ping. In this context in particular, the protection
                  related to competition law and the avoidance of       and security of employee, customer, and partner
                  infringements and are given concrete recom-           data is of particular importance to Hamburg
                  mendations for action in specific shipping situa-     Süd. This requirement was also affirmed by
                  tions. The training is obligatory for all employees   our stakeholders in the survey underlying this
                  who are in direct contact with customers and          report, who rated the topic as one of the most
                  competitors or who work in procurement.               important of all. In order to fulfill our respon-
                                                                        sibility in this area, we have established fixed
                  We behave fairly toward our competitors above         processes and guidelines for data privacy and
                  and beyond the legal requirements. With many          data security. Responsibility for all information
                  of them we work together in various industry          security issues is vested with the Corporate
                  initiatives and even cooperate in day-to-day          Information Security Officer (CISO) who is
                  business: we allocate capacities on board our         supported by five Regional Information Security
                  ships via so-called vessel sharing agreements         Officers (RISOs) – the IT managers of the Ham-
                  and slot charter agreements or, conversely,           burg Süd regions – and three IT managers from
                  secure capacities on selected routes of our           our subsidiaries. The RISOs handle all informa-
                  competitors. The Compliance Organization              tion security inquiries in their respective regions

26   Sustainability Report 2016/2017 Compliance
and meet regularly with the regional manage-      In addition, the Data Protection Officer advises           103-2
ment. The results of these meetings are report-   employees in Germany on all matters relating to            103-3
ed to the CISO. He or she presents the signif-    data protection and is the point of contact for            418-1
icant topics twice a year at the meeting of the   complaints regarding data protection violations.
Information Security Management Board, which      In the regions, this function is assumed by the
apart from him/herself also includes the Chief    Compliance Officers. In order to support our
Executive Officer (CEO) and the Global Head of    employees in their daily handling of sensitive data
Information Technology and Services. This high-   and to provide them with the necessary knowl-
est governance body for data security takes all   edge, we conduct mandatory online training on
important decisions and initiates improvements.   the subject of information security for all new em-
                                                  ployees. Subsequently, all employees are required
                                                  to undergo refresher training every two years.

                                                  As in the two previous years, there were no
                                                  incidents of data leaks, data theft, or loss, or
                                                  substantiated complaints regarding breaches of
   No incidents of data leakage,                  customer privacy during the reporting peri-
   data theft, or loss during the                 od. The mechanisms and processes in place
         reporting period.                        have thus repeatedly proven to be effective.

                                                                            Compliance Sustainability Report 2016/2017   27
ENERGY AND EMISSIONS
Ship design and ship technology                     Page 32
Ship operation                                      Page 32
Reefer containers                                   Page 35
Energy consumption                                  Page 35
Air emissions                                       Page 36
Environmental balance                               Page 38
Spotlight: fuel switch in Chile                     Page 40

28    Sustainability Report 2016/2017 Energy and emissions
Energy and emissions Sustainability Report 2016/2017   29
Energy and emissions –
on a sustainable course
     102-10       In the period under review, Hamburg Süd           containers, the entire container fleet is now 15
      103-1       had 52 owned and 64 chartered contain-            percent more efficient on average than in 2010.
      103-2       er ships in service, as well as 55 chartered
      103-3       bulkers and tankers. All owned vessels were       Where a lot of energy is converted into power,
                  transferred to our new owner in spring 2018.      emissions occur. We are aware that the scale
                  In the future, Maersk Line will be respon-        at which we can reduce the air emissions of
                  sible for the development, management,            our ships plays a central role in assessing our
                  and operation of the fleet and thus also for      sustainability performance. All our energy effi-
                  defining the associated environmental and         ciency measures also contribute to our original
                  efficiency targets. All objectives, measures,     target to reduce our fleet’s CO2e emissions by
                  and results reported below relate to the          45 percent by 2020.* The International Maritime
                  2016/17 reporting period and are therefore        Organization (IMO) is currently working on a
                  still the responsibility of Hamburg Süd.          cross-industry strategy to reduce greenhouse
                                                                    gas emissions from ships: in April 2018 the
                  Most of our total energy consumption is ac-       initial greenhouse gas (GHG) reduction strategy
                  counted for by the operation of our ships. So     was adopted. It sets forth specific objectives for
                  this is precisely where we place the focus of     international shipping, like reducing “the total
                  our energy-saving measures: small and large       annual GHG emissions by at least 50 percent
                  savings potential can be leveraged in ship        by 2050 compared to 2008.” These objectives
                  design as well as with the help of the technol-   will set the framework for the development of
                  ogy on board and in day-to-day operation. The     specific short,- mid,- and long-term measures.
                  Ship Energy Efficiency department provided        Through our memberships in the World Ship-
                  advice on these and other energy issues           ping Council (WSC) and the Association of Ger-
                  across the entire organization. Our almost        man Shipowners (VDR), we are also participat-
                  84,000 reefer containers also consume energy      ing in this process and welcome the aim of the
                  to achieve their cooling performance. By          IMO to define globally binding standards in line
                  using newbuildings and modernizing existing       with the goals set out by the Paris Agreement.
                  *Per TEUkm compared to the base year 2009.

30   Sustainability Report 2016/2017 Energy and emissions
Energy and emissions Sustainability Report 2016/2017   31
102-12       Ship design and ship technology                  tests and other simulation methods, resulting
      103-2                                                        in a reduction of fuel consumption of almost
      103-3       Even before a ship sails the oceans for          4 percent. Where possible, all newbuilding
                  ­Hamburg Süd for the first time, the course      series have been optimized in this manner, and
                   can be set for lower energy consumption. To     in some cases we have also collaborated with
                   this end, we work closely with our shipyard     charter shipping companies to achieve simi-
                   partners in the search for new solutions. For   lar savings with ships on long-term charter.

                                                                   In addition to ship design, a number of tech-
                                                                   nical innovations contribute to reducing fuel
                                                                   consumption. These include, for example, the
                                                                   Becker Twisted Fin, which partially cancels out
                                                                   the negative effect of the swirl in the propeller’s
                      Since 2013, Hamburg Süd has voluntarily      slipstream, or the so-called rudder bulb which,
                       disclosed CO 2 emission data and other      attached to the rudder, enhances the water flow
                     information through the Carbon Disclosure     into and out of the propeller. In addition, the
                     Project (CDP), which collects and publishes   newbuildings of our “Polar” class have been
                     self-reported environmental data from com-    equipped with a wave radar that makes the di-
                          panies and cities around the globe.      rection of the waves and the ocean current vis-
                                                                   ible. The ships’ course can be aligned with this
                                                                   and thus optimized – also in terms of efficiency.
                  example, optimizing smaller main engines for
                  partial-load operational ranges and running
                  at lower cruising speeds can produce a pos-      Ship operation
                  itive effect on fuel consumption compared to
                  larger engines – as shown by the 9,600-TEU       However, the greatest savings potential lies in
                  ships in our “Cap San” class. The standard       everyday operations. Deploying Hamburg Süd
                  ship’s hull can also be optimized using flow     ships to keep fuel consumption as low as pos-

32   Sustainability Report 2016/2017 Energy and emissions
sible en route from the port of departure to the
port of destination has therefore always been our
central objective. Like many others in the market,

                                                                            538.5
we switched to slow steaming many years ago,
i.e. a cruising speed of between 16 and 18 knots,
saving up to 40 percent in fuel compared to a                                                                   g/tkm
speed of 20 knots. This corresponds to around
45 tons per day and ship for a ship in our
“­Santa” class. Even taking deployment of an ad-
ditional ship per route into account to enable the
services to operate in the usual rhythm despite
                                                                                                                         67.2           g/tkm

longer voyage times, the model in most cases
pays off economically as well as ecologically.

Just as important as speed is the chosen route,                                 Cargo plane

or adjusting the ship’s course as required.
                                                                                                                         Truck
Storm and heavy seas, for example, can drive
fuel consumption up. A weather routing pro-
gram on board all Hamburg Süd ships analyzes
meteorological data and supports the ship’s
                                                                       26.2           g/tkm
                                                                                                                                    14.8
command either by giving the bad-weather area
                                                                                                       16.6      g/tkm
                                                                                                                                           g/tkm

a wide berth or adjusting the speed so that the
vessel reaches the affected area ahead of or
only after the forecast spell of adverse weather.
                                                                    Diesel locomotive                   Barge                    Container ship

The vessel’s trim is also optimized with the aid
of software – the better its position in the water,                 ompared with other means of transportation, the container ship per-
                                                                   C
the less propulsion energy it requires.                            forms well in terms of CO 2 e emissions.*

*Source: CO 2 -Berechnungen in der Logistik (CO 2 Calculations in Logistics) by Andre Kranke, Martin Schmied, and Andrea Dorothea Schön, Munich 2011.

                                                                                      Energy and emissions Sustainability Report 2016/2017         33
34   Sustainability Report 2016/2017 Energy and emissions
The Eniram Dynamic Trimming Assistant re-                 until Fleet Management has been integrated                 102-13
cords the relevant parameters on all Hamburg              with Maersk Line, information on the position of           103-2
Süd ships, including propulsion power, draft,             all Hamburg Süd ships, the respective weath-               103-3
and wind speed/direction. The data is analyzed            er conditions, and currents is combined with               302-4
by the system to calculate proposals for opti-            additional data. On this basis, we support our
mizing the trim, making fuel economies of 3 to 5          ships’ commands in important decisions regard-
percent possible.                                         ing route and speed. Much of the data has until
                                                          recently been collected via the Navigator Insight
                                                          software system, which was installed on all own
                                                          and chartered container ships. For example, it
                                                          used integrated bunker controlling to determine
                                                          the fuel consumption for each ship accurate
                                                          to the day, so that countermeasures could be
                                                          taken promptly in the event of deviations. Most
                                                          recently, 68 ships were supported, mainly on
        Hamburg Süd has been a member                     long-haul routes, but on request also on coastal
   of the Trident Alliance since 2015 – a joint           trips. In severe weather, proactive information
   initiative of shipping owners and operators            about possible alternative routes is provided. In
     committed to the enforcement of sulfur               addition, the Fleet Operations Center monitors
               regulations in shipping.                   the increase in hull resistance caused by algae
                                                          or barnacles, which can lead to increased fuel
                                                          consumption. Since commissioning, the fuel con-
The on-board power supply system that                     sumption of the monitored ships on the sea pas-
supplies our ships with electricity also offers           sages has been reduced by almost 10 percent.
considerable savings potential. To ensure that
these opportunities are exploited, Hamburg
Süd has been systematically training its ships’           Reefer containers
commands in matters of energy saving for
more than ten years. Corresponding instruc-               As one of the leading providers of refrigerated
tions are set out in the Ship Energy Efficien-            container shipments, we used around 84,000
cy Management Plan. The latest technology                 reefer containers (refrigerated containers) in
also contributes to efficient ship operation:             the reporting period to bring our customers’
pole-changing fan motors and speed-controlled             temperature-sensitive cargo safely to its des-
cooling water pumps adapt to the operating                tination. Containers need energy to provide
conditions and thus achieve energy savings                the required cooling capacity. With the goal to
of between 70 and 85 percent. All unneeded                increase efficiency while maintaining perfor-
fans and pumps as well as unneeded lighting               mance, we achieved energy savings of over
are consistently switched off. Part of our fleet          30 percent in newbuildings between 2010 and
is also equipped with the Bluetracker fleet               2015. For the existing fleet, the newbuilding
performance management software, which                    program and further modernizations such
records and analyzes the energy consump-                  as software updates on average increased
tion of all machinery and power units in the              the efficiency by more than 15 percent.
on-board network in real time. This creates a
holistic energy profile that identifies irregularities,
inefficiencies, and potential for improvement.            Energy consumption

At a higher level, the Fleet Operations Center at         As described above, Hamburg Süd is contin-
our Hamburg headquarters has been supporting              uously making adjustments aimed at increas-
and optimizing ship operations since 2015. Here,          ing energy efficiency in day-to-day operations

                                                                          Energy and emissions Sustainability Report 2016/2017   35
Reduction of energy consumption of owned and
      302-3       Energy intensity                                      chartered container ships (in 1,000 GJ)
      302-4

                  2014                                        88.1 %    2014                    10,731
                  2015                                       86.3 %     2015                      9,632
                  2016                                       85.8 %     2016                 13,442
                  2017                                      79.3 %      2017      23,613

                    J/TEUkm index; the energy intensity of all fuels
                   M                                                     pplying the efficiency standards of the 2010 base
                                                                        A
                   consumed on board ships has been decreasing for      year, Hamburg Süd would have additionally consumed
                   several years. Base year is 2012 (100 %).            the above energy volumes. A variety of efficiency
                                                                        measures have made a significant reduction possible.

                  and lowering fuel and electricity consumption.        cases, hybrid fuels are also used, which simi-
                  The more we succeed in this, the greater the          larly comply with the 0.1 percent limit. In 2020,
                  dividends it will bring for the environment while     new legislation will come into force that will set
                  at the same time enhancing our cost-effec-            the sulfur content of marine fuel outside these
                  tiveness. As a result of all these measures, we       designated areas at a maximum of 0.5 per-
                  were able to reduce our energy requirements in        cent. Hamburg Süd will of course comply to
                  the reporting period not only relative to trans-      the new regulations once they are introduced.
                  portation capacity, but also in absolute terms:
                  Hamburg Süd’s consumption fell by 2.2 percent         The Navigator Insight software, which we
                  from 2016 to 2017. Our environmental balance          developed a few years ago together with a
                  sheet on page 38 provides detailed figures.           partner and which was used on all our own and
                                                                        chartered ships until recently, provided an over-
                                                                        view and therefore control of all emissions from
     102-10       Air emissions                                         container ships. The system recorded parame-
      103-1                                                             ters such as fuel consumption and engine data,
      103-2       Although container ships are the most efficient       as well as load and waste volumes. Everything
      103-3       way to transport goods over long distances in         was stored, analyzed, and converted into re-
      305-5       terms of CO2e emissions, we have introduced           ports, which were distributed to the responsible
      305-7       a variety of measures aimed primarily at higher
                  efficiency and lower consumption – while at
                  the same time helping to reduce the emissions
                  of our fleet (see previous sections). As a result
                  of the acquisition by Maersk Line, we will no
                  longer be able to pursue our environmental
                  target of minus 45 percent CO2e emissions by
                  2020 single-handedly. However, by the end of           Hamburg Süd reduced its CO2e
                  2017 we had already achieved a 40 percent              emissions by 40 % per TEUkm.*
                  reduction. We are confident that under the new
                  management our fleet will continue to play its
                  part in achieving emission reduction targets.         departments. Here, evaluations were carried out
                  All efficiency measures have a similarly positive     that could point to ways to further increasing
                  effect on emissions of other air pollutants such      efficiency. All in all, we were able to reduce our
                  as sulfur dioxide, nitrogen oxides and particulate    CO2e emissions, as well as other air emissions,
                  matter. In designated special shipping areas,         both in relative and absolute terms within the
                  so-called Emission Control Areas, Hamburg             reporting period and compared with 2015.
                  Süd’s ships run in accordance with regulations        Specifically, for the period from 2016 to 2017,
                  on marine gas oil, which has a maximum sulfur         Hamburg Süd reported a reduction of 2.3 per-
                  content of 0.1 percent. While this is consid-         cent for CO2e, 3.7 percent for nitrogen oxides,
                  erably more costly, it reduces sulfur dioxide         4 percent for particulate matter and 8 percent
                  emissions by over 95 percent – based on an            for sulfur dioxide. Our environmental balance
                  average sulfur content of 2.2 percent. In some        sheet on page 39 provides further figures.
                  *Compared to the 2009 base year.

36   Sustainability Report 2016/2017 Energy and emissions
Reduction of greenhouse gas emissions
Greenhouse gas emissions intensity                        (in 1,000 t)                                                305-4
                                                                                                                      305-5

2014                                         66.8 %       2014                          573
2015                                        65.1 %        2015                              455
2016                                        64.8 %        2016                        737
2017                                      59.9 %          2017          1,533

T he intensity of greenhouse gas emissions (in CO 2 e/    pplying the efficiency standards of the 2010 base
                                                          A
TEUkm) has been decreasing continuously for years.        year, Hamburg Süd would have additionally produced
Base year is 2009 (100 %).                                the above CO 2 e emissions. A variety of efficiency
                                                          measures have made a significant reduction possible.

                                                                           Energy and emissions Sustainability Report 2016/2017   37
103-3       Environmental balance sheet – energy consumption
      302-1
                                                                                                                                       Trend
      302-2                                                         Unit      2014         2015         2016          2017       2016 > 2017
      302-4
                   Total consumption                           1,000 GJ*    99,296    120,786        120,778       118,084           –2.2 %

                                                              1,000 MWh      27,582   33,552          33,549        32,801            –2.2 %

                   Scope 1           Total (direct)            1,000 GJ     79,655     92,730         92,691        89,474            –3.5 %

                                     Container ships           1,000 GJ     73,458    86,458          86,851        83,936            –3.4 %

                                     Bulkers & tankers         1,000 GJ       6,161        6,237        5,806        5,506            –5.2 %

                                     Other (owned
                                     trucks, vehicle fleet,
                                     offices)                  1,000 GJ          36          36            34            32           –4.1 %

                                     Total (energy indi-
                                     rect; electricity and
                   Scope 2           district heating)         1,000 GJ          63          67            64            61           –5.3 %

                                     Offices and shore-
                                     side power California     1,000 GJ          63          67            64            61           –5.3 %

                                     Total
                   Scope 3           (other indirect)          1,000 GJ      19,579    27,988         28,023        28,550             1 .9 %

                                     Total (energy
                                     consumption in the
                                     upstream chain of
                                     purchased fuels
                   Category 3        and electricity)          1,000 GJ       7,301        9,053        9,033         8,713           –3.5 %

                                     Total (energy con-
                                     sumption of pur-
                   Category 4        chased shipments)         1,000 GJ      12,184    18,836         18,893         19,743            4.5 %

                                     Total (energy
                                     consumption for
                   Category 6        business travel)          1,000 GJ          94         100            97            94           –2.9 %

                  *GJ = Gigajoule.

                                                                                             Scope 1: container ships
                 0.1 %
                                                                                             Scope 1: bulkers and tankers
                16.7 %
                                                                                            S cope 1: other (owned trucks,
                                                                                              vehicle fleet, offices)
                 7.4 %
                 0.1 %                                                                        cope 2: total (energy indirect;
                                                                                             S
               < 0.1 %                                                                       electricity and district heating)
                                                                           71 .1 %
                 4.7 %                                                                        cope 3: category 3, total (energy
                                                                                             S
                                                                                             consumption in the upstream chain
                                                                                             of purchased fuels and electricity)

                                                                                              cope 3: category 4, total (energy
                                                                                             S
                                                                                             consumption of purchased shipments)

                                                                                              cope 3: category 6, total (energy
                                                                                             S
                                                                                             consumption for business travel)

                   Energy consumption by area 2017 (difference to 100 % due to rounding).

38   Sustainability Report 2016/2017 Energy and emissions
Environmental balance sheet — emissions                                                                                            103-3
                                                                                                                                   305-1
                                                                                                                          Trend
                                                Unit          2014            2015         2016          2017       2016 > 2017    305-2
                                                                                                                                   305-3
Carbon dioxide equivalents
                                                                                                                                   305-5
(CO 2 e)*                                    1,000 t          7,654           9,275       9,328          9,114           –2.3 %
                                                                                                                                   305-7
Scope 1         Total (direct)                1,000 t        6,282            7,285        7,316         7,064           –3.4 %

                Container ships               1,000 t         5,711           6,709        6,740         6,514           –3.4 %

                Bulkers and tankers           1,000 t          479             484           451           427           –5.2 %

                Other (owned
                trucks, vehicle fleet,
                offices, reefer coo-
                lant losses)                  1,000 t            92             92           126           123           –2.0 %

                Total (energy indi-
                rect; electricity and
Scope 2         district heating)            1,000 t              5              6             5             5          –13.5 %

                Offices and
                shore-side power
                California                    1,000 t             5              6             5             5          –13.5 %

                Total
Scope 3         (other indirect)             1,000 t          1,367           1,984       2,006          2,045            1.9 %

                Total (energy
                consumption in the
                upstream chain of
                purchased fuels
Category 3      and electricity)              1,000 t          530             668          668            645           –3.5 %

                Total (energy
                consumption of
                purchased ship-
Category 4      ments)                        1,000 t          830            1,310        1,332         1,394            4.7 %

                Total (energy
                consumption for
Category 6      business travel)              1,000 t             6              7             7             6           –2.9 %

Sulfur dioxide (SO 2 )                       1,000 t             94            107           113           104           –8.0 %

Nitrogen oxides (NO X )                      1,000 t           167             203          198            190           –3.7 %

Particulate matter (PM 10 )                  1 .000 t            14             17            16            16           –4.0 %

*In addition to CO 2 , CO 2e also includes other greenhouse gases such as methane.

                                                                               Scope 1: container ships
 0.1 %
                                                                               Scope 1: bulkers and tankers

15.3 %                                                                         cope 1: other (owned trucks,
                                                                               S
                                                                               vehicle fleet, offices, reefer coolant losses)
 7.1 %
                                                                               
                                                                               Scope   2: total (energy indirect;
 0.1 %                                                                         electricity and district heating)
 1.4 %
 4.7 %                                                        71.5 %            cope 3: category 3, total (energy
                                                                               S
                                                                               consumption in the upstream chain
                                                                               of purchased fuels and electricity)

                                                                               
                                                                               Scope 3: category 4, total (energy
                                                                               consumption of purchased shipments)

                                                                               
                                                                               Scope 3: category 6, total (energy
                                                                               consumption for business travel)

Greenhouse gas emissions by area 2017 (difference to 100 % due to rounding).

                                                                                        Energy and emissions Sustainability Report 2016/2017   39
Fuel switch in Chile –
together for more sustainability
                  In spring 2017, in cooperation with our customer Electrolux, one of the
                  world’s leading manufacturers of household appliances, we launched a pilot
                  project to reduce sulfur dioxide emissions. Among other things, sulfur dioxide
                  can contribute to soil acidification and to respiratory diseases. The key to
                  reducing emissions lies in switching from heavy fuel oil (HFO) as standard to
                  higher-grade marine gas oil (MGO). The project proved that when shippers
                  and shipping companies work together, it is possible to implement measures
                  for greater sustainability that go beyond the minimum legal requirements.

                  Low-sulfur fuel has so far been used in com-         The idea for a joint project was born in a
                  mercial shipping mainly in designated special        working group of the Clean Cargo Working
                  transit areas, called Emission Control Areas –       Group (CCWG), in which both Electrolux
                  for example in the North Sea and Baltic Sea or       and Hamburg Süd have been members for
                  off the coast of the USA and Canada, where           many years. The CCWG is an association of
                  more stringent limit values for sulfur content       shipping companies, freight forwarders, and
                  apply. While marine gas oil permits a signifi-       leading brand manufacturers that have set
                  cant reduction in sulfur dioxide emissions, it is    themselves the goal of minimizing the neg-
                  also significantly more costly than conventional     ative environmental impacts of global freight
                  heavy fuel oil – the average price difference        transportation and promoting responsible
                  in the reporting period was over 60 percent.         transportation. Taking the project forward
                  As desirable as this sustainable solution is,        was then a question of teamwork, involving
                  the use of MGO also needs to be economi-             Electrolux and various Hamburg Süd depart-
                  cally viable. In our project with Electrolux, both   ments from ship operation to procurement.
                  sides – carrier and shipper – accepted addi-
                  tional efforts to achieve greater sustainability.    The pilot project was implemented during
                                                                       the layover of the Hamburg Süd ship “­Santa
                                                                       Clara” (7,154 TEUs) in the Chilean port of
                                                                       Iquique from March 1 to 2, 2017. Instead of
                                                                       using HFO, the auxiliary engines and boilers
                                                                       were run on MGO. The latter has significant-
                                                                       ly lower sulfur content, in this case resulting
                                                                       in more than 98 percent of sulfur dioxide
                                                                       emissions being avoided during the port
                                                                       stay. We repeated the project in Chile in the
                                                                       spring of 2018, and we additionally carried
                                                                       out the fuel switch in Mexico and Peru.

                                                                       In respect of the container carriers in its supply
                                                                       chain, Electrolux has in the past made re-
                                                                       ducing CO2 emissions a focus of its “For The
                                                                       Better” sustainability strategy. Its next step is
                                                                       now to reduce sulfur oxides in ports where no
                                                                       corresponding regulations are in place. The
                                                                       innovative aspect of the project was not the
                                                                       fuel switch itself. Rather, it is the fact that both
                                                                       sides accepted additional efforts and higher
                                                                       costs in order to jointly make the value chain
                                                                       more sustainable and environmentally friendly.

40   Sustainability Report 2016/2017 Energy and emissions
Energy and emissions Sustainability Report 2016/2017   41
ENVIRONMENT
Oil spills                                          Page 44
Ballast water                                       Page 44
Protection of endangered species                    Page 46
Sustainable materials                               Page 46

42     Sustainability Report 2016/2017 Environment
Environment Sustainability Report 2016/2017   43
Environmental protection –
responsibility for the marine habitat
     102-10       As a globally operating logistics service provid-     ing procedures and checklists to ensure every-
      103-1       er, we are aware of the environmental impacts         thing runs smoothly on board and regular risk
      103-2       caused by our services and work continuously to       assessments that trigger standard or individual
      103-3       reduce them. In addition to energy and emissions      measures to avert or limit risks where necessary.
                  (see separate chapter starting on page 28), we
                  focus especially on the marine environment. The
                  demands we place on ourselves and on our part-
                  ners in this respect are formalized in our Princi-
                  ples of Social and Ecological Responsibility as
                  well as in our safety, environmental, and quality                No oil spills within
                  policy. Because the external viewpoint and critical
                                                                                  the reporting period.
                  exchange are also important in this context,
                  Hamburg Süd is involved in a number of envi-          In compliance with legal requirements, all
                  ronmental and industry initiatives and thus also      ­Hamburg Süd ships in the “Santa” class and
                  accepts its responsibility outside the company.        above are fitted with so-called inboard protected
                                                                         fuel tanks: they lie deep inside the ship, so that
                  To underscore this commitment, we set our-             even if the ship’s hull is damaged they are well
                  selves binding and verifiable environmental            protected. The bilge water – a water-oil mix that
                  targets several years ago. These relate to the         collects at the lowest point of the engine room
                  greenhouse gas emissions of our fleet (see             – is treated in a de-oiling unit to a maximum
                  “Energy and emissions” chapter), the avoidance         limit value of 15 ppm in line with international
                  of oil spills, and the use of more sustainable         regulations. All our ships from the “Monte” class
                  materials in container newbuildings. As respon-        upward go one step further and de-oil down to
                  sibility for both the operation of Hamburg Süd         5 ppm, which is equivalent to just 5 parts of oil
                  ships and container production – and thus all          per one million parts of water. Other measures to
                  related goals – will in the future be integrat-        protect the oceans from pollution include biode-
                  ed with Maersk as a result of the acquisition,         gradable lubricants for the bow and stern thrust-
                  the following information only relates to the          ers and air chambers in the stern tube seals that
                  status quo. Smaller goals are defined individ-         reliably prevent oil leakages. To enable the com-
                  ually at site level as well as within the frame-       pany to learn from the experiences of others and
                  work of the integrated management system.              to benefit from pooled expertise, Hamburg Süd
                                                                         also participates in the Container Ship Safety Fo-
                                                                         rum, a network that aims to further improve safe-
      103-1       Oil spills                                             ty standards in the container shipping industry.
      103-2
      103-3       Spillages of fuels and lubricants into the oceans,    Avoiding any contamination caused by fuels
      306-3       rivers, and harbor basins is one of the greatest      and lubricants is one of our central environ-
                  environmental risks in the shipping business and      mental goals. To monitor our performance in
                  can cause pollution that may severely threat-         this area and ensure that the measures taken
                  en marine flora and fauna and coastal areas.          are sufficient, every single incident is record-
                  In addition to other objectives, the high level       ed in detail, regardless of its extent, cause,
                  of safety on board all Hamburg Süd ships is           and impact. There were no oil spills across
                  therefore aimed at preventing the occurrence of       the entire fleet during the reporting period.
                  such incidents as oil spills. The Hamburg Süd
                  fleet is certified in accordance with the DIN EN
                  ISO 14001 environmental management stan-              Ballast water
                  dard, and strict compliance with the International
                  Safety Management Code (ISM Code) also                Ships take on ballast water to correct and stabi-
                  ensures maximum safety. This includes operat-         lize the trim of the ship and optimize operating

44   Sustainability Report 2016/2017 Environment
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