CapMan Oyj : Norled – Innovations drive climate transition

June 14, 2022

Norled has a long tradition of innovation and creating sustainable solutions. In a world where climate change affects all continents and countries, they see that everyone should contribute to reducing emissions and adopting environmentally friendly solutions. At Norled, 2021 was a year of sustainable progress and innovations, while outlining a green course for the future.

In 2021 Norled conducted a comprehensive review of priorities related to sustainability with its employees and stakeholders, resulting in a sustainability programme with four focus areas: climate and environment, people and society, prosperity, and governance.

Towards zero-emission operations

In 2021, Norled's Scope 1 CO₂ emissions amounted to approximately 113,000 tonnes, showing a reduction of 27% compared to 2019 figures. The company targets to reduce CO₂ emissions further by approximately 59,000 tonnes by 2030, amounting to a reduction of 67% compared to the starting point in 2019, and to become a net zero-emission company by 2040.

Key to these reductions is renewing the fleet and increasing the proportion of zero / low emission vessels in it. In May 2021, 12% of vessels in operation were electric and bio-fuel vessels compared to 2% at the time of CapMan's acquisition of Norled in 2019.

In addition to continued fleet renewals and increasing the proportion of low- and zero-emission vessels, the company plans to work with skilled partners within propulsion systems, automation, and energy carriers to create new sustainable innovations that further expedite the change towards a net zero-emission business.

Innovation & collaboration create prosperity

The company's shareholders continuously work together with Norled to secure the company's position at the forefront of the green shift. As a leading player developing environmentally friendly technology in the ferry and express boat sector, Norled aims to be the preferred partner for creating new green concepts and development initiatives. Recent innovative concepts include the delivery of the world's first liquid hydrogen powered ferry MS "Hydra", and the creation of a battery swap system for electric express boats created together with SEAM.

Norled's ferry MS "Hydra" will in 2022 start running on liquid hydrogen as the first in the world, proving the company's strong position at the forefront of zero emission technology.

The battery swap system launched by Norled in 2021 can accelerate the conversion of express boats from diesel to electric operation. With this solution express boats can maintain high speed and regularity without major upgrades to the power grid. The solution is cost effective and can therefore speed up the electrification of the fleet. Express boats use the most diesel and emit the most greenhouse gases within the Norwegian ferry sector, therefore it is important that also these are converted to low and zero-emission propulsion systems.

Safety first while focusing on maritime expertise

Norled continuously works to get more women into the industry and to be a leader in safety. The company employs over 860 people and follows workplace safety and employee wellbeing closely. Norled has a strong focus on the safety of its customers and employees and aims to continuously improve its HSQE culture.

As an active owner, CapMan Infra sets the tone for its portfolio companies and leads by example by considering diversity in its own team and portfolio companies' board compositions, for instance. In CapMan Infra's portfolio companies, the average share of women among top management is 24% and amongst board members 10%. In 2021, 50% of shareholder-elected Board members at Norled were women, including the chairperson. Also, 50% of top management group members were women. These numbers are equal to the targets set for 2030. Within the whole company the proportion of women is 17%. Norled targets to increase the proportion of women overall in the company to 30% by 2030.

Management principles & reporting

At Norled sustainability is incorporated in the company's management principles. The company is dedicated to systematic work that enables them to report on sustainability goals in accordance with sustainability standards; especially the GRESB standard.

The company targets to increase its GRESB points from 35 in 2019 to 85 in 2030 and has laid out a strategy for this. GRESB is a mission-driven and industry-led organization that provides actionable and transparent environmental, social and governance (ESG) data to financial markets. Their assessments are based on several internationally recognized reporting standards, the Paris Agreement and the UN's sustainability goals, in addition to regional and national guidelines.

Key SDG's and targets

Norled has linked and integrated its sustainability focus areas to the UN's sustainable development goals and further to Norleds overall strategic plan, ensuring that sustainability is a natural and fully integrated part of the business. Below a summary of key SDG's and Norled's targets related to them.

Ensure women's full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life

The marine industry and Norled are competing for manpower. To be able to attract and retain employees, the company acknowledges it cannot forget women. Norled strongly believes that diversity has a positive effect on the company's business and culture and is set to find ways to encourage more women to join the marine industry.

Norled targets:

• Work to attract more women to the industry
• Target of 50% women on the board and leading positions, and increasing the proportion of women overall in the company to 30% by 2030

By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities

Driving innovation is part of Norled's DNA. The company has challenged boundaries and will continue to do so going forward, so it can offer better and more environmentally friendly solutions for the future as well. Innovation is also necessary in order to succeed against the competition.

Norled targets:

• Introduce new environmentally friendly technology and solutions for ferries and express boats
• Introduce low- and zero-emission vessels that can offer sea transport in areas with busy roads

By 2030, provide access to safe, affordable, accessible, and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons

Norled has an important societal role in ensuring safe, accessible, and sustainable transport services along the entire coast of Norway. Heavy traffic and multiple departures in varying weather conditions require continuous work on risk awareness and safety measures.

Norled targets:

• Prioritize new contracts with an environmental focus
• Continuous work to avoid safety incidents on Norled vessels

Integrate climate change measures into national policies, strategies, and planning

The ferry sector is set to be emission-free by 2030 in Norway if the authorities follow up as expected with requirements for zero emissions in all tenders from 2023. Norled has led the way in the industry and continues to do so. Currently, express boats use the most diesel and emit the most greenhouse gases within the Norwegian ferry sector. Therefore, it is important that also they are converted to using low- and zero-emission propulsion systems. Norled has launched a new battery replacement system for express boats as a solution for the whole industry.

Norled targets:

• Cut 67% of CO2 emissions by 2030
• Become a net zero company by 2040
• Increase share of low- and zero-emission vessels from 4% to 65% by 2030