Unpacking the Impact of a Green Port Journey

A challenging balance is emerging, between addressing immediate operational priorities and committing to long-term sustainability investments. Thorny questions abound, such as how do I help my customers meet their emission targets while staying competitive? Which green investment do I prioritise first? What are the costs and trade-offs of different scenarios?

It’s no small wonder that a Climate Transition Impact Assessment has crept onto the radar of many a port manager. But what is this and how does it differ from other environmental assessments? More importantly, can it improve decision-making?

Different types of environmental assessment

Most managers are familiar with an Environmental Impact Assessment, which is the process of evaluating the potential impacts of a proposed project or activity, such as building a factory, on the environment.

The opposite of that is an Environmental Risk Assessment, which determines the risk to people, built environments, and ecological systems from events such as floods, heat, or wind – such as assessing the frequency and height of storm surges to determine the height of a sea wall.

A Climate Transition Impact Assessment, however, takes a fundamentally different approach. Rather than evaluating a project’s impact on the environment, it examines the outside-in impact - the effect of climate developments on a port’s financial performance. It quantifies the internal management impacts of climate action and policy, taking into account emission data, policy changes, technological advancements, and market shifts. Its goal is to provide decision-makers with a structured approach to evaluate the potential impacts of different climate action pathways and quantify how each will impact the business, enabling them to make informed, strategic decisions that align with long-term sustainability goals.

Towards a low-emission future

Port managers must juggle commercial considerations while staying abreast of new technology and the latest environmental policies and directives. With an eye on the future, they must also place strategic bets on which green fuel to prioritise for shipping companies seeking to meet ambitious IMO and EU emission reduction targets. Without a crystal ball, they must determine actual versus perceived market demand for competing green fuels such as Green Ammonia, Methanol, and Hydrogen, notwithstanding that a clear front-runner is incredibly hard to discern.

Then, they must understand the physical impacts on their port and the limitations of local infrastructure, such as the capacity of electricity generation and whether it's possible to upgrade grid connections.

Reporting emissions to get tougher

If this green transition isn’t challenging enough, ports will soon need to account for their Scope 3 emissions. These go beyond measuring direct emissions from operations (Scope 1) and emissions from purchased energy (Scope 2). Scope 3 concerns indirect emissions generated by the value chain. That’s everything from emissions in the manufacturing of port equipment, such as cranes and straddle carriers, to those generated by third parties and port tenants, such as ferry terminal operators and fabricators, through to different types of cargo and the distance they travel. Even emissions not under a port’s control – such as extra emissions from a ship rerouted to avoid a conflict area – must be accounted for.

While there may be no legal obligation to measure Scope 3 emissions now, managers ought to be prepared as market forces will drive this requirement.

Data to the rescue

A Climate Transition Impact Assessment will demand accurate and comprehensive data collection to establish baselines for emissions, energy consumption, and operational efficiency etc.

The assessment will highlight data gaps across departments that need to be plugged, and suggest ways to unify data collection, store, and report the findings. Ports are not always the easiest of environments in which to do this as they are notoriously fragmented, with different departments and organisations spread across a wide area. But technology has a big role to play, particularly when processes are automated. AI, for example, is particularly good at making sense of Scope 3 emission data. Also, a unified approach to data streamlines budgeting and planning, simplifying workflows for finance teams and managers.

Furthermore, with transparent and verifiable data at their fingertips, managers are better placed to share progress on their climate initiatives. This builds goodwill and trust, dispelling any notion of greenwashing.

While this assessment supports informed decision-making, executing those decisions is another matter. Port managers may find that they need to enhance their team’s proficiency in data analysis, or skills in implementing sustainability practices and innovations. As with any transition, hiring the right people and upskilling staff are critical.

Culture Change

Another perhaps unexpected outcome of the assessment may be the need for cultural change within the organisation. This is because reviews of policies and actions are likely to unearth practises that need changing. For example, to stop the practice of leaving engines running while a vehicle is stationary requires explanation and instruction of the drivers. It calls for a shift in both culture and process.

One thing is certain: climate-related developments will continue to come thick and fast, and no assessment is ever a silver bullet to a trouble-free climate transition. However, having a costed pathway based upon data and understanding of policies, regulations, technologies, and markets, brings clarity to decision-making by removing the guesswork and financial uncertainty. Ports with this extra advantage will almost certainly be better placed to serve tomorrow’s low-carbon global economy.

This article was originally published in Port Strategy Magazine - Q2 2025 on 29 May 2025.