SUSTAINABILITY REPORT - PERFORMANCE SHIPPING INC.
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SUSTAINABILITY REPORT PERFORMANCE SHIPPING INC.
2020 PERFORMANCE SHIPPING INC SUSTAINABILITY REPORT
Contents
Letter from our Chairman 4 5. Our planet 33
Letter from our CEO 5 5.1 Energy efficiency - monitoring & managing fuel consumption 33
5.2 Effluents and waste management 36
Forward looking statements 6
5.3 Office environmental management 37
1. About this report 8 5.3.1 Recycling 37
5.3.2 Going paperless 38
2. Who we are 9
5.3.3 Energy conservation 38
2.1 Our Company 9 5.4 Protecting biodiversity and marine life 39
2.2 Risks and uncertainties 11 5.5 Environmental compliance 43
2.3 Performance and goals 11
2.4 External memberships 12 6. How we work 44
6.1 Our people 44
3. How we care 13
6.1.1 Shore-Based Employees 45
3.1 Sustainability policy 13
6.1.2 Seafarers 49
3.2 Our vision and mission 15
6.2 Human Rights 59
3.3 Stakeholder engagement 15
6.3 Cybersecurity and Customer Privacy 60
3.4 Materiality analysis 18
6.4 Socioeconomic Compliance 61
3.5 Link to the UN Sustainable Development Goals 22
3.6 Social Responsibility 23 7. GRI content index 62
4. Economic performance & governance 24
4.1 Financial highlights 24
4.2 Governance structure 27
4.2.1 Internal control environment 28
4.2.2 Risk Management and compliance 29
4.2.3 Ethics & anti-corruption practices 30
4.2.4 Supply chain 31
4.2.5 Responsible procurement 32
Letter from
the Chairman Letter from our
of the Board Chief Executive
of Directors Officer
Performance Shipping Inc. (Performance) recognizes the importance of adhering By every count, the past year was not what we expected it to be. No one was quite
to responsible environmental, social, and governance (ESG) policies and practices. prepared for how dramatically the world would change in 2020 and the incredibly
In that regard, we are committed to providing customers, business partners, employees, challenging journey it had in store for everyone across the globe.
shareholders, and society-at-large with this, our first report on our ESG activities and
During the COVID-19 pandemic, the virus spread rapidly, infecting millions and killing over
strategies for the 2020 calendar year.
three million people worldwide since it emerged in December 2019. It altered working
As a global provider of shipping transportation services whose business is focused on environments and impacted the global economy. Still, the efforts and willingness to
operating a tanker fleet to serve the needs of some of the leading energy companies collectively work together at a global scale gives me hope for the years ahead. This global
and traders, we are especially aware of the impact of climate change on the planet. community was most evident in the record speed at which pharmaceutical companies
Performance is both a transporter and a user of fuel oil, and we know that concern for researched and developed vaccines to help prevent millions of deaths worldwide.
the environment is essential to society and the global economy. As such, we strive to
At Performance Shipping Inc., our priority is employee health and wellbeing, both
promote sustainability through environmentally conscious practices relative to our
on-shore and at sea. During this time of uncertainty, our people adapted, innovated, and
business’ conduct, the operation of our fleet, and our management of energy resources
overcame daily challenges in stride while working towards our vision of continuously
and waste materials – while at all times remaining committed to safety, responsibility,
improving every aspect of our operations. New technologies for seafarers offer a feeling
reliability, and professionalism. Furthermore, our Board of Directors and management
of connection with the shore-side through calls, social media, and other tools that help
team fully support our efforts to comply with the climate change objectives adopted by
alleviate the sense of isolation and disconnection. It is inspiring to watch how we integrate
the International Maritime Organization (IMO).
brand new digital solutions into our daily life and continue our mission as a result of the
In addition to our pursuit of sound environmental stewardship, we also take affirmative hard work, resilience, support, and dedication of our people.
steps to promote a safe, healthy, and equitable workplace; and ensure the lawful and
We salute all frontline workers for valiantly risking their personal health to keep the rest
ethical governance of our business. New measures and strategies were implemented
of us safe. This includes the significant number of seafarers who were left stranded on
throughout the year to reduce the impact of COVID-19 on business performance, and
ships due to travel restrictions and closed ports, many of whom have expressed physical
most importantly on employee health and wellbeing. We are proud of the commitment
and mental fatigue from extended periods onboard. We are working around the clock to
and professionalism of our seafarers, shore employees and executives during this
ensure crew changes can take place safely for our seafarers’ health and wellbeing.
challenging period.
In 2020 we also witnessed a worldwide digital transformation, as people were able to
Our reporting approach is to describe our policies, decisions, and actions regarding
rethink the way we work, shop, and attend events. Entire industries had to reshape their
material issues that have been identified by our stakeholders in the maritime industry and
business models in a very short time. The magnitude of change related to new digital
regulatory authorities. We are committed to the transparent and open reporting of our
technologies will be fundamental to adapting to a post-COVID-19 market, demonstrating
sustainability, operating and financial performance.
how adversity can lead to a new era of progress. This digital revolution will be an
We are proud of the initiatives we have taken thus far to encourage sustainability, protect opportunity to change how we work, enhance safety, reduce our carbon footprint, and
and preserve our environment, and pursue a responsible approach to a range of ESG tackle our sustainability goals responsibly and ethically to impact our society positively.
issues. We look forward to reporting to you on our future progress.
As a result of worldwide lockdowns in 2020, we witnessed an unprecedented decline in
Sincerely, global CO2 emissions. However, with economic activity resuming, these levels will rise
Symeon P. Palios again. With increasing global trade, the maritime industry will play an essential role in
Chairman of the Board of Directors lowering global CO2 emissions. We are committed to improving efficiency and reducing
greenhouse gas emissions from our vessels as part of the IMO GHG Strategy, and ensuring
compliance with Sulphur emission regulations.
There will undoubtedly be daunting challenges ahead that will require long-term thinking,
but I believe when this pandemic is over, the world will be a different place; we will build
a better tomorrow.
With tremendous gratitude and hope for the future,
Andreas Michalopoulos
Chief Executive Officer
6 7
Forward
looking statements
Matters discussed in this report and the documents incorporated by reference may
constitute forward-looking statements. The Private Securities Litigation Reform
Act of 1995 provides safe harbor protections for forward-looking statements in order
to encourage companies to provide prospective information about their business.
Forward-looking statements include, but are not limited to, statements concerning plans,
objectives, goals, strategies, future events or performance, and underlying assumptions
and other statements, which are other than statements of historical facts.
Performance Shipping Inc., desires to take advantage of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. This document and any other
written or oral statements made by the Company or on its behalf may include forward-
looking statements, which reflect its current views with respect to future events and
financial performance, and are not intended to give any assurance as to future results.
When used in this document, the words “believe”, “anticipate,” “intends,” “estimate,”
“forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect” “targets,”
“likely,” “would,” “could,” “seeks,” “continue,” “possible,” “might,” “pending” and similar
expressions, terms or phrases may identify forward-looking statements.
Please note in this report, “we”, “us”, “our” and “the Company” all refer to Performance
Shipping Inc. and its subsidiaries, unless the context requires otherwise.
The forward-looking statements in this report are based upon various assumptions,
many of which are based, in turn, upon further assumptions, including without limitation,
our management’s examination of historical operating trends, data contained in our
records and other data available from third parties. Although we believe that these
assumptions were reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are difficult or impossible
to predict and are beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections. with the restrictions and other covenants in our financing arrangements, our ability
to continue as a going concern, potential liability from pending or future litigation,
Such statements reflect the Company’s current views with respect to future events and potential costs due to environmental damage and vessel collisions, the market
and are subject to certain risks, uncertainties and assumptions. Should one or more for our vessels, availability of skilled workers and the related labor costs, compliance
of these risks or uncertainties materialize, or should underlying assumptions prove with governmental, tax, environmental and safety regulation, any noncompliance with
incorrect, actual results may vary materially from those described herein as anticipated, the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) or other applicable regulations
believed, estimated, expected or intended. The Company is making investors aware relating to bribery, the impact of the discontinuance of LIBOR after 2021 on interest rates
that such forward looking statements, because they relate to future events, are by their of our debt that reference LIBOR, general economic conditions and conditions in the
very nature subject to many important factors that could cause actual results to differ oil industry, effects of new products and new technology in our industry, the failure of
materially from those contemplated. counter parties to fully perform their contracts with us, our dependence on key personnel,
adequacy of insurance coverage, our ability to obtain indemnities from customers,
In addition to these important factors, other important factors that, in our view, could changes in laws, treaties or regulations, the volatility of the price of our common shares,
cause actual results to differ materially from those discussed in the forward-looking our incorporation under the laws of the Marshall Islands and the different rights to relief
statements include the strength of world economies, fluctuations in currencies and that may be available compared to other countries, including the United States, changes
interest rates, general market conditions, including fluctuations in charter hire rates in governmental rules and regulations or actions taken by regulatory authorities, general
and vessel values, changes in demand for our vessels, changes in the supply of vessels, domestic and international political conditions or events, including “trade wars”, acts by
changes in worldwide oil production and consumption and storage, changes in our terrorists or acts of piracy on ocean-going vessels, the length and severity of epidemics
operating expenses, including bunker prices, crew costs, dry-docking and insurance and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19)
costs, our future operating or financial results, availability of financing and refinancing, and its impact on the demand for seaborne transportation of petroleum and other types
and changes to our financial condition and liquidity, including our ability to pay amounts of products, potential disruption of shipping routes due to accidents, labor disputes
that we owe and obtain additional financing to fund capital expenditures, acquisitions or political events, vessel breakdowns and instances of off-hires and other important
and other general corporate activities and our ability to obtain financing and comply factors. Please see our filings with the U.S. Securities and Exchange Commission for
a more complete discussion of these and other risks and uncertainties.
1
About this Report 2
Who we are
Sustainability is a roadmap for our business future
and is an integral part of our corporate mentality
This Report covers the period 01.01.2020 – 31.12.2020
and has been prepared in accordance with the Global
At a glance
and strategy. Through this, our first sustainability Reporting Initiative (GRI) Standards: Core option.
report (the “Report”), we intend to communicate We were incorporated under the laws of the
to our shareholders and stakeholders our approach, We are committed to progressing our approach to Republic of the Marshall Islands on January 7, 2010
actions, and aspirations. sustainability and improving our alignment with the and maintain our principal executive offices at
GRI Standards in our next Report. 373 Syngrou Avenue, 175 64 Palaio Faliro, Athens,
When used in this Report, the terms “Performance,” Greece. Our common shares trade on the Nasdaq
“Company,” “we,” “our”, and “us” refer to Performance In addition to the GRI Standards, we are committed to Capital Market under the ticker symbol “PSHG”.
Shipping Inc. and/or one or more of its subsidiaries, the principles of the United Nations Global Compact Each of our vessels is owned by a separate wholly-
as the context requires. The financial information (UNGC) and Sustainable Development Goals (UN owned subsidiary. The commercial and technical
of Performance included or incorporated into this SDGs), as presented in section 3.5, and we intend to management of our fleet, and the provision of
Report represents our financial information and the align these principles with the strategy, culture and administrative services relating to our fleet’s
operations of our subsidiaries. day-to-day operations of our Company. The United operations, are carried out by our in-house fleet
Nations Global Compact is a call to companies management company, Unitized Ocean Transport
The following sections present selected information to align their operations and strategies with ten Limited (UOT), since March 1, 2013. Our agent and
about Performance and our operations, as well as universally accepted principles in the areas of human Performance is a Nasdaq listed global shipping authorized representative in the United States
transparent insight into our sustainability strategy rights, labor, environment and anti-corruption, and company specializing in the ownership of tanker is the wholly-owned subsidiary, Performance
and performance, the risks and goals relevant to the to take action in support of UN goals and issues vessels. Shipping USA LLC.
sustainability context, and several social solidarity embodied in the SDGs.
initiatives.
As a signatory of the UNGC we support the ten UNGC Principles.
HUMAN RIGHTS ENVIRONMENT
Principle 1: Businesses should support and Principle 7: Businesses should support a
respect the protection of internationally precautionary approach to environmental
proclaimed human rights; and challenges;
Principle 2: make sure that they are not Principle 8: undertake initiatives to promote
complicit in human rights abuses. greater environmental responsibility; and At our inception in January 2010, our business was
focused on the ownership of container vessels,
Principle 9: encourage the development and we have since gradually transitioned to a
LABOR
and diffusion of environmentally friendly purely tanker fleet, completing our exit from the
Principle 3: Businesses should uphold the technologies. containership sector in 2020.
freedom of association and the effective
recognition of the right to collective bargaining; ANTI-CORRUPTION 2.1
Principle 10: Businesses should work against
Our Company
Principle 4: the elimination of all forms of
forced and compulsory labor; corruption in all its forms, including extortion
and bribery.
Principle 5: the effective abolition of child
labor; and Company organizational Chart
Principle 6: the elimination of discrimination in
BOARD OF DIRECTORS
respect of employment and occupation.
Since we are a new sustainability reporter, we do This Report describes our philosophy, actions,
AUDIT COMMITTEE CHIEF EXECUTIVE OFFICER & TREASURER COMPENSATION COMMITTEE EXECUTIVE COMMITTEE
not yet possess a concrete set of Key Performance and progress towards our sustainability goals.
Indicators (KPIs), providing our readers with As a result, this report addresses all our major
previous historical data. Of course, where possible, activities, including corporate governance aspects, INTERNAL AUDITOR
comparative data is provided (e.g., in the financial and the ways in which we measure and manage CHIEF FINANCIAL OFFICER
data). Therefore, for the purpose of this Report and our impact on the environment and society,
in case data is not available or complete, suitable inclusive of selected financial results. FINANCIAL REPORTING & CORPORATE PLANNING &
EXECUTIVE ASSISTANT LEGAL COUNSEL TREASURY OFFICER
assumptions and estimates have been applied. ACCOUNTING DIRECTOR GOVERNANCE OFFICER
In August 2019, our first tanker vessel was delivered, of our vessels is employed on a time charter of a SUBSIDIARIES
and as of the date of this Report, our fleet has minimum of seventeen (17) months to a maximum
expanded to consist of five Aframax tanker vessels of nineteen (19) months, which expires the earliest PLACE OF DATE DATE
A/A COMPANY VESSEL FLAG CAPACITY
providing worldwide seaborne transportation of in mid-November 2021. INCORPORATION BUILT DELIVERED
crude oil. As of December 31, 2020, our fleet’s
combined cargo-carrying capacity increased to COMMERCIAL AND TECHNICAL MANAGEMENT VESSEL OWNING SUBSIDIARIES - AFRAMAX TANKER VESSELS
546,094 deadweight tons (DWT) and a weighted OF OUR OWN FLEET
Taburao
average age of 11.4 years. The Company’s Marshall 104,623
1 Shipping Marshall Islands Blue Moon Sep-11 Aug-19
operations are conducted primarily outside the In 2020, UOT undertook the commercial and Islands DWT
Company Inc.
USA, and our vessels are mainly chartered by technical management of our entire fleet. UOT
leading liner and oil companies. is responsible for the daily operations of our Tarawa
Marshall 104,588
2 Shipping Marshall Islands Briolette Apr-11 Nov-19
fleet, including technical operations, crewing, Islands DWT
Company Inc.
We have historically chartered our vessels to training, maintenance, regulatory and classification
customers primarily on time charters and spot compliance, and health, safety, quality, and Rongelap
Marshall
voyages. As of the date of this Report, four of our environmental management and reporting. 3 Shipping Marshall Islands P. Fos 115,577 DWT Mar-07 Jan-20
Islands
Company Inc.
vessels are employed in the spot market and one
Toka Shipping Marshall 115,915
4 Marshall Islands P. Kikuma Nov-07 Mar-20
FLEET DATA AS OF DECEMBER 31, 2020 Company Inc. Islands DWT
Arno
Marshall 105,391
5 Shipping Marshall Islands P. Yanbu Jan-11 Dec-20
Islands DWT
Company Inc.
SIZE (DWT) YEAR BUILT BUILDER
OTHER SUBSIDIARIES
P. YANBU 105.391 2011 SUMITOMO HEAVY Performance
Company’s US
(ex Kalamas) INDUSTRIES MARINE & 6 Shipping USA Delaware - USA
Representative
- - -
ENGINEERING CO., LTD LLC
Unitized
Ocean Management
6 Marshall Islands - - -
Transport Company
SIZE (DWT) YEAR BUILT BUILDER Limited
P. KIKUMA 115.915 2007 SAMSUNG HEAVY
(ex FSL Shanghai) INDUSTRIES CO., LTD
2.2 2.3
SIZE (DWT) BUILDER
Risks and Performance
uncertainties and goals
YEAR BUILT
P. FOS 115.577 2007 SASEBO HEAVY
(ex Virgo Sun) INDUSTRIES CO., LTD
A detailed analysis of industry specific risks that Given that this is our inaugural ESG Report,
have been identified is available in our Annual our objective is to provide transparent insight
Report filed on Form 20-F with the U.S. Securities into our strategy and identify and set relevant
SIZE (DWT) YEAR BUILT BUILDER and Exchange Commission (SEC), which is located sustainability goals for the future. We are in the
on our website www.pshipping.com and on the SEC process of gathering accurate and complete data
BRIOLETTE 104.588 2011 SUMITOMO HEAVY website at www.sec.gov in order to report comprehensive comparative
INDUSTRIES MARINE & data going forward.
(ex Maersk Jamnagar)
ENGINEERING CO., LTD
SIZE (DWT) YEAR BUILT BUILDER
BLUE MOON 104.623 2011 SUMITOMO HEAVY
(ex Maersk Jeddah) INDUSTRIES MARINE &
ENGINEERING CO., LTD
2.4
External memberships 3 How
Through the development and implementation of our ESG Sustainability Policy, we aim to exercise our
business activities even more diligently and consciously regarding our impact (positive or negative) on
we care
society and the environment.
The following section presents our sustainability
framework and the material sustainability
Due to our small size and developing nature in the sustainability domain, we have not yet developed extensive
issues identified, along with our approach to
actions and programs regarding external initiatives and memberships in associations. Nevertheless, we
stakeholder engagement.
intend to expand our memberships, given proper business circumstances.
The Company and its executive and non-executive members are active members
of the following associations 3.1
Sustainability policy
HELMEPA INTERTANKO MARIA TSAKOS PUBLIC In 2020 we developed and adopted an ESG The ESG Policy sets the overarching principles of
BENEFIT FOUNDATION Policy, which applies to all our employees, sustainability, introduces new aspects of corporate
(Hellenic Marine (the International
pursues initiatives directors, officers, agents, subsidiaries, and responsibility, and brings together elements that
Environment Protection Association of Independent
to advance seafarers’ vessel management company, Unitized Ocean already existed in our everyday business through
Association), Tanker Owners), a trade
welfare, maritime Transport Limited (each, an “Employee”). the implementation of our Management System
an association where association that has
education, training, (MS) and other corporate practices and policies.
Greek seafarers and served as the voice for
ship owners participate independent tanker and research; protect and
voluntarily with the owners since 1970, preserve the environment
purpose of protecting the representing the interests and maritime heritage. Our focus revolves around
seas from ship-generated of its members at national, The foundation fosters the three core principles of ESG
pollution. It encourages regional, and international research projects related or three ESG pillars:
compliance with national levels. to the maritime sector and
and international laws and its people, environmental
protection, sustainability
regulations that Greece
has ratified, governing and resilience and increases 1 2 3
awareness of the maritime ENVIRONMENTAL SOCIAL GOVERNANCE
pollution prevention
and safety at sea. industry’s significance and
contribution to national
and international trade.
Our Chairman serves as
Vice Chairman of the Board
of Directors of Maria Tsakos
Foundation.
Making successful progress on ESG issues is the best possible way, we keep informed about
challenging as we depend on the collective efforts current sustainability trends and developments
of many. Factors such as technical advances, in ESG practices, aiming to act as a responsible
policy changes, economic volatility, and supplier and ethical corporate citizen towards a better and
engagement may also affect our progress. While more sustainable global future.
UK DEFENSE CLUB MEDITERRANEAN ITOSF we strive to meet our goals and targets, sometimes
a superior maritime REGIONAL COMMITTEE (Informal Tanker challenges may impede our progress. Furthermore, we undertake to uphold the highest
OF CHINA CLASSIFICATION standards of sustainable development. To achieve
legal costs insurance. Operator Safety Forum),
SOCIETY (CCS), Through this ESG Policy, we aim to improve the this goal, we have identified the following
Our Chairman is a member an industry forum
of the Board of Directors. until mid-2020, where safety issues and predictability, transparency, and accountability priority ESG commitments and objectives,
our Chairman served as initiatives are discussed of our actions by putting into practice our taking into account the broader context of issues
Chairman of the Board. and benchmarked among commitments to ESG sustainability and pursuing acknowledged through the materiality analysis
Tanker Operators. improvements in all our operations. In order performed in 2020 (see also chapter 3.4 below):
to enhance our corporate social responsibility
while embedding it into our everyday business in
1 2 This Report presents the underlying essence of our
ESG Policy regarding the way we handle and manage
our performance related to the issues addressed
ENVIRONMENTAL SOCIAL within it.
Given that we are a first-time reporter in further
• Monitor energy consumption and relevant • Provide a safe and healthy working
pursuit of sustainability excellence and a board
emissions while being updated regularly environment for employees. committee responsible for the oversight of
regarding renewable or alternative • Be responsive to employment issues (hiring, sustainability performance has not yet been
environmentally friendly sources of energy. retention, etc.) and respect labor rights. formed, our CEO has been assigned to make any
• Comply with climate change objectives • Invest in personnel training and further decisions regarding the implementation of the
and initiatives such as the IMO’s relevant education. ESG Policy and sustainability issues in general.
commitments. • Support and uphold the protection of human Whenever needed, and as per the Company’s
• Minimize all environmental discharges. rights by complying with all applicable laws. governance system, the CEO informs the Board
• Protect biodiversity and life below water. • Promote diversity and inclusion, equal of Directors of the ongoing developments of
sustainability matters relevant to the Company’s
3.3
Stakeholder
• Comply with the continuously changing opportunity, and non-discrimination.
environmental regulations, applicable • Implement policies and procedures for operations and our future plans. The CEO is
supported by the experienced members of our
national and international legislation, protective measures in the event of an
classification society regulations, and
industry guides and guidelines.
emergency or major incident.
• Promote the health of employees
management team in his endeavors to achieve the
above and develop this Report. engagement
• Strive to meet legislation early and exceed by encouraging physical exercise through In creating our first Sustainability Report using the
compliance requirements and standards. participation in community and GRI Standards, we defined our major stakeholders
• Measure, track, and communicate progress charitable activities. and our interaction with them in order to achieve
on incorporating sustainability principles • Support the local communities in which we a comprehensive and meaningful stakeholder
into business practices. operate, including through encouragement 3.2 engagement approach. By taking into account the
Our vision
• Implement policies and procedures of charitable activities and giving. direct and indirect influence of various stakeholders,
individuals, and legal entities, we tried to define and
to address environmental impacts, • Develop a culture of trust and teamwork
include those stakeholder groups who have an actual
and mission
which are periodically reviewed. amongst employees, partners, clients,
impact on our decision-making and operations.
• Allocate responsibilities and adequate suppliers, and stakeholders.
resources for the implementation of our ESG After internal consultation and discussions, we
Policy and the objectives set forth therein. Our vision is to become a leader in our industry
via continuous improvement in every aspect of arrived at seven major stakeholder groups, which
our operations. At the same time, our mission is are presented below in alphabetical order:
to provide safe and environmentally responsible
3 GOVERNANCE
seaborne transportation of crude oil products
around the world.
• Customers
• Employees
AND ECONOMIC • Financial institutions
Our key concern is to continually improve our
PERFORMANCE offered services, ensuring that our customers’
• Investors
transport needs are addressed adequately, in a • Maritime organizations
• Foster ethical business conduct. contemporary and responsible manner. • Society
• Exhibit transparency and integrity. • Suppliers
• Comply with relevant legislation. In connection with the above vision and mission,
In our operations, we have regular communication
• Apply a solid governance model using our prime strategic objectives are outlined below:
with the above stakeholder categories, which
sound governance principles while taking
• Zero incidents; vary from daily contact to ad hoc, depending
into account relevant good practices. on circumstances and business needs. For the
• Zero spills;
• Promote responsible purchasing and supply purposes of this Report, we communicated our
• Efficient energy performance;
chain practices. endeavor to selected stakeholders in order for
• Cost-effective seaborne transportation services;
• Pursue healthy economic performance them to actively participate in the identification
• To satisfy and, where possible, to exceed clients’
without neglecting to consider potential of key sustainability topics and concerns that they
needs and expectations;
environmental and social implications. consider as crucial for us and the shipping industry
• Sound corporate governance and ethical
• Maintain transparent and honest as a whole.
business conduct;
communication with stakeholders.
• Sustainable development and healthy economic The engaged stakeholders, per group, are
• Adopt voluntary charters, codes of conduct,
development; and presented below with the respective communication
and policies to reach sustainability goals.
• Transparency and unbiased dialogue with method, frequency, and raised topic, as well as the
stakeholders. Company’s response.
16
STAKEHOLDER GROUP COMMUNICATION METHOD / COMMUNICATION MAIN TOPICS RAISED FROM PERFORMANCE’S RESPONSE
TYPE OF ENGAGEMENT AND FREQUENCY INTERACTION AND SURVEY
Investors Shareholders Annual General Meeting, quarterly and Annual Company resilience, annual Performance’s financial results and significant
annual reports on financial results, press Quarterly results, investment plans transactions are and will continue to be fully
releases on significant transactions i.e., Ad hoc and regularly disclosed to its shareholders.
S&P transactions or long-term TC contracts Strategic Annual financials are audited by a reputable
(through audit firm before issuance.
roadshows)
The Internal Auditor monitors the design
and implementation of a sound Internal Control
System and its continuous improvement.
Employees Line and upper management Annual employee performance review Annually and Daily Employment Performance hires / attracts high caliber
Open and direct communication Job opportunities personnel to conduct its business in the most
professional way and offers its employees
career development opportunities
Customers Charterers / brokers Press releases, meetings, calls Ad hoc Company’s reliability / Performance focuses its efforts on delivering
and correspondence reputation high-quality services to its clients
Participation in events / exhibitions Rendering of top-quality
services
Inclusion of ESG practices
Financial Banks, underwriters Frequent meetings and calls Quarterly Financial performance Performance is committed to sustainable
institutions Press releases Annually Growth potentials development and healthy economic
Quarterly and annual FS Ad hoc – i.e. in Transparency performance
Corporate presentations case of significant
changes in the
Company’s
structure /
business
Industry Classification societies, Inspections and auditing process Ad hoc Compliance Performance’s business transactions are
organizations P&I clubs, vetting companies, Meetings, calls and correspondence Environmental performance in compliance with applicable laws and
trade industry organizations Participation in events / exhibitions Inclusion of ESG practices regulations specified by industry organizations
Authorities and Ministry of Shipping, customs Inspections and audits Ad hoc Regulatory compliance Performance complies with all laws, policies,
regulators and tax authorities, IMO, Environmental performance and regulations as set by regulatory authorities
Securities and Exchange Health and Safety
Commission, Port Authorities,
Coastguard, flag administration
Community and Academia, NGOs / other Participation in charitable events, Ad hoc Adoption of new Performance keeps up to date on technological
society initiative / associations, Donations to local communities technologies advancements and trends and examines
local communities Environmental performance the adoption of new applications
Suppliers Insurance brokers, Calls, meetings and correspondence Annually Company’s reliability / Performance maintains open and unrestricted
manufacturers, shipyards, ship Participation in events / exhibitions Ad hoc reputation communication with business partners
chandlers, port agents, manning Supplier evaluations Procurement practices Supplier evaluations integrate with sustainability
agents Engagement through contracts Inclusion of ESG practices related issues3.4
Materiality analysis
As we set out to identify our material sustainability To facilitate this survey process, we benchmarked The survey process revealed that both internal Finally, in the interest of better presentation and
issues in 2020, we ran a materiality analysis survey key issues identified by other shipping companies. and external stakeholders are aware of various understanding, some issues were consolidated. The
asking selected stakeholders their opinion and Using the GRI topic-specific standards as a sustainability issues relevant to us and the shipping Company applied a materiality threshold (i.e., score
perspective on sustainability related issues. Due primary guide, we selected potential key issues industry. This assessment helps us focus our above 80% in both axes) to define its material issues
to the unprecedented situation of COVID-19, and which seem to be closer to our business nature initiatives and goals on the areas where we can and formulate the basis of the Report’s content. These
for precautionary reasons in the interest of safety and relevant to this Report. From this process, have the greatest impact while also identifying issues are depicted in the materiality matrix below.
(our primary concern as a shipping company), twenty topics of potential focus were identified opportunities for our business strategy. Most
the scheduled interviews took place via individual and grouped into three wider categories (i.e., participants tended to have concerns revolving
videoconference calls. Each interview had a environmental, social, and governance). The around safety, compliance, governance, environment,
dual purpose: to inform stakeholders about our survey results reflected the stakeholders’ and employment issues.
sustainability agenda and to understand our perception of sustainability issues, which they
stakeholders’ concerns. We received feedback considered material to our operations, taking into
from 16 respondents, external and internal. account our intention to operate responsibly.
HIGH
OCCUPATIONAL
GOVERNANCE / ETHICS HEALTH & SAFETY
& ANTI-CORRUPTION /
ENVIRONMENTAL
ANTI-COMPETITION
LABOR / MANAGEMENT COMPLIANCE
RELATIONS, FREEDOM OF
ASSOCIATION, AND COLLECTIVE SOCIOECONOMIC
BARGAINING COMPLIANCE
EMPLOYMENT ISSUES EFFLUENTS
DIVERSITY, EQUAL
& WASTE
OPPORTUNITY, &
ENERGY CONSUMPTION
NON-DISCRIMINATION
(WITHIN THE COMPANY),
EMISSIONS, & CLIMATE CHANGE
HUMAN RIGHTS ASSESSMENT
RESPONSIBLE
PROCUREMENT / TRAINING & BIODIVERSITY &
Importance to stakeholders
SUPPLY CHAIN EDUCATION LIFE BELOW WATER
LOCAL
COMMUNITIES CUSTOMER
CHILD, FORCED,
PRIVACY
OR COMPULSORY LABOR ECONOMIC
PERFORMANCE
& MARKET
PRESENCE
SECURITY PRACTICES
WATER MANAGEMENT
(I.E., WITHDRAWAL,
CONSUMPTION, REUSE /
RECYCLING)
PUBLIC POLICY & POLITICAL
CONTRIBUTIONS
Importance to Performance Shipping Inc. HIGH
GOVERNANCE ENVIRONMENTAL RESPONSIBILITY EMPLOYMENT RESPONSIBILITY SOCIAL RESPONSIBILITY OPERATIONAL RESPONSIBILITYThe following ten material issues were identified in order of significance
The issues that we initially identified and
used to perform the materiality analysis
are the following:
MATERIAL ISSUE GRI STANDARD REFERENCE ISSUE BOUNDARIES
1 2 3 1 Occupational Health GRI 403: Occupational Internal (employees) / external
GOVERNANCE ENVIRONMENTAL EMPLOYMENT and Safety Health and Safety (visitors & customers)
RESPONSIBILITY RESPONSIBILITY
2 Environmental Compliance GRI 307: Environmental Internal (company &
Compliance shareholders) / external
• Economic performance • Energy consumption (within • Employment issues (local communities & industry
organizations)
and market presence the Company), emissions, • Labor / Management
• Responsible procurement / and climate change relations, freedom of
supply chain • Water management association, and collective
• Governance / ethics (i.e., withdrawal, bargaining 3 Governance / ethics & GRI 205: Anti-corruption Internal (company, shareholders,
anti-corruption / anti- GRI 206: Anti-competitive financial institutions, employees)
& anti-corruption / consumption, reuse / • Occupational health &
competition Behavior
anti-competition recycling) safety
• Biodiversity and life below • Training and education
water • Diversity, equal opportunity,
4 Effluents and Waste GRI 306: Effluents and External (local communities &
• Effluents and waste and non-discrimination
Waste industry organizations)
• Environmental compliance • Security practices
• Human rights assessment
5 Socioeconomic Compliance GRI 419: Socioeconomic Internal (company, shareholders,
4 5 Compliance employees)
SOCIAL OPERATIONAL
RESPONSIBILITY RESPONSIBILITY
6 Employment issues GRI 401: Employment Internal (company & employees)
7 Energy consumption GRI 302: Energy Internal (company) / external
• Child, forced, or compulsory • Customer privacy (within the Company), GRI 305: Emissions (local communities & industry
emissions and climate change organizations)
labor • Socioeconomic
• Local communities Compliance
• Public policy & political
contributions 8 Biodiversity and life below water GRI 304: Biodiversity External (local communities &
industry organizations)
9 Diversity, equal opportunity GRI 405: Diversity and Internal (company & employees)
and non-discrimination Equal Opportunity
GRI 406: Non-discrimination
Each topic’s boundary is either internal or
external or both, depending on our primary
impact. Specifically, “internal boundary” means 10 Training and Education GRI 404: Training Internal (company & employees)
that an issue has an impact within the Company and Education
and directly affects our operations, shareholders,
and employees, whereas “external boundary”
means that an issue has an impact outside the
Company and primarily affects its environment, The above material issues are presented in more detail within the following chapters of the Report, along
local communities, suppliers, and customers. with other issues from the survey, which we considered important to include to inform our stakeholders
about our sustainability performance.3.5 3.6
Link To The UN Sustainable Social responsibility
Development Goals At Performance, we promote social solidarity
and aim to pursue voluntary initiatives and
volunteerism is an effective way for companies to
get involved in and support local communities and
As a corporation that is genuinely interested in the respective SDGs which are relevant to our ESG opportunities to keep our employees engaged promote employee wellness. Outdoor volunteer
a better and more sustainable future, we support Policy, namely: and involved with society. These opportunities for events are an effective way for employees to reduce
the UN SDGs, and we aim to align our actions with social contribution are also important factors in stress, achieve fitness and wellness goals, and
team building amongst employees. keep motivated. We encourage all employees to
engage in volunteer activities to boost morale and
Social solidarity during a pandemic, with lockdowns support various nonprofit organizations through
and social distancing, plays a pivotal role in charitable activities.
1 2 3 developing a collective consciousness. Employee
ENVIRONMENT SOCIAL GOVERNANCE
ECONOMIC PERFORMANCE
Philanthropy and employee
volunteerism initiatives
• In November 2020, we formed the UOT Employee
• SDG 7. Affordable • SDG 3. Good health & • SDG 8. Decent work and
Relief Fund (UERF) in cooperation with our crew
and clean energy well-being economic growth
agent in Manila to support employees affected
• SDG 13. Climate action • SDG 4. Quality education • SDG 16. Peace, justice, and by natural disasters, such as typhoons, fires,
• SDG 14. Life below water • SDG 5. Gender equality strong institutions or floods. Funds collected by the Company
• SDG 10. Reduced through employees’ contributions provided
inequalities basic necessities and temporary relief to those in
need. UERF actively supported the families of crew
members affected by Typhoon Goni, which hit
the Philippines and caused widespread damage.
• In September 2020, a third of our employees
took part in the “Digital Race for the Cure 2020.”
The Company covered the participation costs for
those who took part. Proceeds from the event
went to the nonprofit Hellenic Association of
Women with Breast Cancer “Alma Zois.”
• In June 2020, we took part in the “Virtual SNF Run.”
The participation cost of each runner was covered
by the Company, which was then tripled by the
Stavros Niarchos Foundation (a philanthropic
organization whose work is making grants to
nonprofit organizations). Proceeds from the race
went to 81 hospitals across Greece. Over half of
our Employees took part in the Virtual SNF Run.4
Economic performance DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED (EVGD)
The following table presents the direct economic value generated and distributed:
and governance Direct economic value generated and distributed
The sections of the following chapter present, amongst other information, selected financial data of
the Company as well as an overview of its governance framework and Internal Control System (ICS). 31/12/2020 Source (Press Release
USD dated March 8, 2021)
4.1 Direct economic
value generated
Revenues $46,283,000
Voyage and time
charter revenues
Financial highlights Economic value
Voyage expenses (+)
Vessel operating expenses (+)
Operating costs $23,394,000
distributed Management fees (+)
non-cash G&As
SELECTED FINANCIAL DATA December 31, December 31,
(Expressed in thousands of US Dollars) 2020 2019 Crew wages & office employees
$8,668,000
payroll and benefits
Voyage and time charter revenues $ 46,283 $ 26,846 Payments to providers Dividends paid and
$2,212,000
of capital interest cost
Voyage expenses $ 14,622 $ 3,447 Payments to government $520,000
Vessel operating expenses $ 11,544 $ 11,321 Economic value retained $11,489,000
Net income / (loss) $ 3,777 $ (32,057)
Net income / (loss) attributable to common stockholders $ 5,190 $ (32,057)
Earnings / (Loss) per common share, basic $ 1.06 $ (11.19)
Earnings / (Loss) per common share, diluted $ 1.05 $ (11.19)
$ 23.4 million
Average number of vessels 4.6 4.2 In 2020, our revenue Operating costs
amounted to $46.3 million
whereas our net income ECONOMIC VALUE
Number of vessels 5.0 4.0 GENERATED $ 8.7 million
amounted to $3.8 million. Crew wages &
$46.3 million office employees
revenue payroll and benefits
Ownership days 1,689 1,516 Our revenue increased
by 73% compared to 2019
Available days 1,689 1,516 (or by $19.50 million).
ECONOMIC VALUE $ 2.2 million
Payments
As of December 31, 2020, DISTRIBUTED to providers
Operating days, excluding ballast leg 1,258 1,401 of capital
the Company’s equity
amounted to $96.8 million
Operating days, including ballast leg 1,515 1,422 and long-term debt to
$58.1 million. $ 0.5 million
Fleet utilization, excluding ballast leg 74.5% 92.4% Payments to
government
Fleet utilization, including ballast leg 89.7% 93.8%
Time charter equivalent (TCE) rate $ 18,745 $ 15,435
Daily vessel operating expenses $ 6,835 $ 7,468 Further financial information can be found on our website http://www.pshipping.com/for-our-investors
and on the SEC website at www.sec.gov
274.2
Governance structure
Our executive management team’s responsibilities Our Board is elected annually on a staggered
include basis. Each director elected holds office for
• working to ensure the implementation a three-year term and until their successor is
of our business strategy; elected and has qualified, except in the event of
• general corporate oversight; such director’s death, resignation, removal, or the
• interfacing with financial markets; and earlier termination of their term of office.
• supervising the commercial and technical
management teams. In February 2020, we appointed our first female
Board member as a step toward advancing Board
BOARD OF DIRECTORS diversity and enhancing the transparency of our
We maintain a majority independent board of governance structure.
directors (Board) comprising of seven (7) individuals
with a variety of geographic locations, backgrounds, As part of its activities, the Board receives regular
qualifications, and extensive experience in all aspects updates relating to progress and priorities in
of business. We believe that this diversity contributes sustainability topics and participates in reviewing
to a well-rounded Board, uniquely positioned to the effectiveness of risk management processes
guide our strategy. on ESG issues and in decision-making on financial
management matters.
BOARD INDEPEΝDENT FEMALE
MEMBERS Global lockdowns forced meetings of all sizes
to go virtual, including the digitization of Board
7 4 1 meetings. We were able to find our footing and
adapt instantly. The advantages of virtual meetings
were quickly made clear; Reduced travel, increased
AVERAGE OVERALL ATTENDANCE % attendance and engagement, cost efficiency,
AGE clearer agendas, and presentations. Our Board’s
65 93 % ability to come together and transition swiftly
makes a difference in our capacity to impact our
operations effectively.
NAME AGE POSITION
Symeon P. Palios 80 Class III Director Chairman of the Board
Director, Chief Executive Officer,
Andreas Michalopoulos 50 Class I Director Treasurer and Secretary, Member
of the Executive Committee
Non-Executive Director, Chairman of
Aliki Paliou 45 Class II Director
the Executive Committee
Independent Non-Executive Director,
Giannakis (John) Evangelou 76 Class III Director
Chairman of the Audit Committee
Independent Non-Executive Director,
Antonios Karavias 78 Class I Director Member of the Audit Committee and of
the Compensation Committee
Independent Non-Executive Director,
Christos Glavanis 68 Class III Director Chairman of the Compensation
Committee
Reidar Brekke 59 Class II Director Independent Non-Executive Director
More information regarding our executives’ resumes and their competencies as members of the above
Board Committees can be found on our website http://www.pshipping.com/who-we-are.Mr. Symeon Palios has served as our Chairman From October 2019 to October 2020, he served We have an established Internal Audit Department Our Internal Auditor has a functional reporting
of the Board since January 13, 2010, and as our as our Deputy Chief Executive Officer, and from that reviews our processes and controls, provides line through direct and unrestricted access to
Chief Executive Officer from January 2010 to January 2010 to October 2020, he also served as appropriate recommendations to add value, the Audit Committee to communicate their
October 2020. our Chief Financial Officer. improves our operations, and assists Management findings, recommendations, and monitoring of their
in accomplishing our objectives. implementation and, in parallel, an administrative
Mr. Andreas Michalopoulos serves as our Chief The Company has also formed several Board reporting line to the CEO. Through this dual
Executive Officer since October 2020, as a Committees in the context of a sound governance Reporting line, the Internal Auditor maintains
Director since March 2020, and as a member of model. These are presented briefly below. their independence and objectivity.
the Executive Committee since February 2020.
4.2.2
AUDIT COMMITTEE COMPENSATION EXECUTIVE Risk Management & compliance
COMMITTEE COMMITTEE
Our Audit Committee (AC) Risk management is an inherent part of our According to our ESG Policy, we are committed
is comprised of Our Compensation Our Executive Committee business, and we perform relevant actions in order to identifying and assessing ESG risks and
two independent directors. Committee (CC) is (ExCo) was comprised to identify and mitigate the risks pertinent to opportunities and incorporating these into our
The AC is responsible for comprised of two of three directors until our operations. More information about the risks operations where appropriate.
reviewing our accounting independent directors. February 2020. Since and opportunities we encounter can be found
controls, recommending to The CC is responsible February 2020, it is in chapter 2.2 above and in our Annual Report,
the Board the engagement for recommending to comprised of two directors. located on our website.
of our independent auditors, the Board our senior The ExCo is responsible for
and pre-approving audit executive officers’ the overall management of
and audit-related services compensation and our business.
and fees. The AC is also benefits, among other ENVIRONMENTAL
responsible for reviewing things. • Efficient energy consumption;
all related party transactions
• Emissions and factors contributing to climate change;
for potential conflicts of
interest, and all related party • Biodiversity and life below water;
transactions are subject to • Responsible disposal of effluents and waste; and
the approval of the AC.
• Environmental compliance.
4.2.1 SOCIAL
Internal control environment • Occupational health & safety;
• Employment issues, training, and education;
As a publicly traded Company, we are subject to • Preservation of human rights;
the rules and regulations of the Securities and • Diversity;
Exchange Commission (SEC) and of any national We aim to achieve ISO 9001
• Ensuring equal opportunity and non-discrimination; and
securities exchange (Exchange) on which our certification during 2021.
shares are listed. • Socio-economic compliance.
In this context, we operate a Committee of Sponsoring The ICS and the MS feature short, medium, and
Organizations of the Treadway Commission (COSO) long-term objectives, set by executive management
aligned Internal Control System (ICS). An inherent and endorsed by our Board. This Report may also GOVERNANCE
part of this ICS is a comprehensive Management complement the above by setting additional goals
• Governance and ethics (including anti-corruption/anti-competition);
System (MS) for the entire Company (i.e., offices per material issue and taking into account the
and vessels), and satisfies the requirements of applicable sustainability reporting standards. We • Economic performance; and
the most recent versions of the ISO 9001, 14001, periodically review our objectives and goals related • Responsible procurement/supply chain.
OHSAS18001/ ISO45001, ILO MLC 2006 & ISM to safety, health, security, energy, environmental,
Code, as applicable, and all other statutory labor, and human rights and evaluate our
requirements and international legislations. performance by using appropriate key performance
The relevant Management System encapsulates indicators (KPIs). We operate in several countries throughout anti-corruption laws and have adopted a code
the above and sets the pace towards compliance the world, including countries known to have a of business conduct and ethics that is consistent
with the respective requirements of the reputation for corruption. We are committed to and in full compliance with the Foreign Corrupt
standards followed. doing business in accordance with applicable Practices Act (FCPA).4.2.3 Our Code, along with the Whistleblower program,
and various other policies are posted on our
Ethics & anti-corruption practices website www.pshipping.com
Our Corporate Governance documents are
We have adopted and communicated the Code of are encouraged to take all appropriate action to scheduled to be revised every two years to
Business Conduct and Ethics (the Code) to all of stop any known misconduct by fellow employees or enhance our governance policies. These policies
our employees, directors, officers, and agents, and other personnel that violate this Code, without fear were revised in 2020 and approved by our Board.
our subsidiaries, to promote honest and ethical of retaliation. Employees shall report any known or
conduct, full and accurate disclosure in reports
the Company files with, or submits to, regulatory
suspected misconduct to the Chairman of the Audit
Committee, or the Company’s Legal Department, 2020
authorities, protection of Company assets, fair or through the Company’s Whistleblower Program
dealing practices, compliance with laws, rules by leaving a voice message with the Company’s
and regulations and to deter wrongdoing. All whistleblower hotline answering service or sending
Employees are required to be familiar with this an email to the dedicated email address. Employee confirmed incidents
Code, comply with its provisions, and report any
suspected violations. Our Code is consistent and
information will be kept strictly confidential; the
Company will not retaliate or allow retaliation for
0 of corruption against
in full compliance with the U.S. Foreign Corrupt reports made in good faith. the Company
Practices Act of 1977, as amended.
In addition to the above, we have implemented
We have also developed a whistleblower program, the following policies to support our sustainable
available to both internal and external parties, to business approach. These include: whistleblowing
report any potential noncompliance. Employees
incidents reported
0 through any of the
Anti-Fraud Policy & Fraud
Harassment Policy
available channels.
Response Plan
Through this policy, we outline the principles we We do not tolerate harassment in any form,
are committed to in relation with preventing, and we are committed to ensuring a work All governing documents, policies, procedures,
reporting and managing fraud and corruption, environment free of harassment, bullying, and and the Company’s Management System are
including, but not limited to, violations of the discrimination. Through this policy, we endeavor documented and electronically available to our
U.S. FCPA, the U.K. Bribery Act, and the anti- to protect all employees from exposure to any employees through the Company’s intranet
corruption laws of the other countries where we form of harassment. and ERP System. A copy of these policies is
do business. given to all employees upon commencement of
Information Systems their employment.
Security Policy
Equal Employment
Opportunity Policy We ensure that all users or networks of the 4.2.4
Supply chain
IT structure within our organization’s domain
Through this policy, we endeavor to provide Equal abide by the prescriptions regarding digitally
Employment Opportunity to all job applicants stored data security. This policy intends to
and employees. protect information systems and ensure the
ongoing confidentiality of information, data We focus on quality and compliance standards with
integrity, and information system services our suppliers across the entire supply chain, and
availability. our continued compliance with these standards
Insider Trading and quality requirements is vital for our operations.
Prevention Policy
We utilize the services of manufacturers and marine
Federal securities laws prohibit the misuse of ESG Policy logistics firms who offer global “door-to-deck”
material non-public information. This policy delivery of products such as ship spares and marine
forbids any employee from trading in the We have developed an Environmental, Social, parts. This specialized supply chain management
Company’s securities, either for their personal and Governance Policy, which applies to all service integrates with their global infrastructure
account or on behalf of others, while in of our employees, directors, officers, and and expertise in freight forwarding, warehousing,
possession of material non-public information or agents. The policy identifies our commitment supply chain management, local ship agency &
communicating material non-public information to assessing ESG risks and opportunities and chandlering, and marine and offshore support.
to others in violation of the law. incorporating these into our operations.You can also read
