Identifying ESG Trends of International Container Shipping Companies Using Semantic Network Analysis and Multiple Case Theory

Abstract

Strengthened International Maritime Organization environmental regulations, the Poseidon principles, and other environmental changes require shipping companies to expand their Environmental, Social, and Governance (ESG) investments. ESG management is evolving as an essential requirement to enhance the competitiveness of global liner shipping companies. Under these circumstances, this study aims to provide policy guidelines and future directions for the development of ESG management in Korean shipping companies. Accordingly, we selected four companies under THE Alliance, which is an ESG standard leader in shipping. Based on each shipping company’s sustainability reports from 2019 to 2021, we analyzed the major ESG performance factors required for a company to achieve its sustainability goals, developing four research questions. Based on multiple case study theory, we compared each company’s ESG management status and main characteristics using the quadruple helix model, proposing three measures to improve the ESG management of Korean shipping companies: 1. Cultivate ESG experts specialized in the maritime field; 2. Strengthen support for small- and medium-sized companies; 3. Construct a maritime-specialized ESG evaluation system and introduce voluntary management culture. Our findings contribute to the maritime industry’s development by identifying necessary factors and proposing improvement directions that will help Korean shipping companies to secure global competitiveness.

1. Introduction

The Environmental, Social, and Governance (ESG) framework first emerged in the United Nations (UN) Principles for Responsible Investment in 2006. Since the 2019 business roundtable (BRT) statement, ESG has garnered attention as a new standard for global companies to strengthen corporate competitiveness [1]. As the world economy globalizes, shipping companies are introducing and implementing various policies to provide competitive shipping services. Typical examples include expanding the controlled fleet, increasing ship size, forging strategic alliances, conducting mergers and acquisitions (M&A), and establishing smart integrated land and marine logistics systems. Currently, the competitiveness of shipping companies is determined by the quality and freight rates of their shipping services. However, in the future, it will be determined not only by basic factors such as rapid shipping services based on digital platforms but also by securing ships powered by eco-friendly fuels such as liquefied natural gas (LNG), methanol, ammonia, and hydrogen; protecting seafarer rights; respecting the diversity of foreign seafarers; ethically managing tax evasion related to the flag of convenience; and establishing an anti-corruption ethical management system [2]. Thus, these companies must shift from past ship operation management practices, which focus only on the financial value investments required to ensure stable profits from ship operations, and focus on the management of ship operations according to the new concept of ESG. This will help shipping companies recognize the severity of air and marine pollution caused by ships and prepare for unforeseen situations, especially those that are long-lasting, such as the COVID-19 pandemic [3].

In particular, to address global poverty, achieve sustainable growth, and respond to and mitigate climate change, the UN has established sustainable development goals (SDGs) to be achieved by the international community by 2030. In addition, the Paris Climate Agreement, signed in 2015 to replace the Kyoto Protocol on greenhouse gas reduction targets adopted in 1997, was the first to emphasize the “environmental” aspect of ESG management, which is the biggest issue for domestic and foreign industries. In compliance with the Paris Climate Convention, individual parties are required to strengthen carbon-zero policies and environmental regulations to reduce air pollution from ships, not only on land but also at sea [4]. Against this backdrop, if global ocean liner shipping companies do not introduce ESG management into their operation management policies, they may face new problems, such as costs to treat the waste and pollution resulting from ships, increased payment for damages due to environmental destruction, refusal of cargo shipments from global shippers, and suspension of ship finance, all of which can negatively impact their corporate image and sustainability management [5]. Therefore, under the International Maritime Organization (IMO) 2020 sulfur oxide regulation and carbon reduction strategy, global ocean shipping companies are expected to use low-sulfur fuel oil; install scrubbers; order new LNG, methanol, ammonia, and hydrogen fuel-powered ships; and promote ESG management following the Poseidon principles, which form a new global framework for responsible ship finance [6].

The international shipping market operates in a close-knit manner; liner companies have formed alliances to reduce excessive competition among themselves and to maintain and stabilize the order of ship routes in recognition of the specificity of regular and repetitive liner services. Such alliances are important, accounting for 80% of the global container transportation market as the global economy develops and container ships grow in size. HMM, Korea’s only deep-sea liner carrier and a member of three major shipping alliances, rapidly increased its capacity from 400,000 to 820,000 twenty-foot equipment units (TEU) between 2016 and 2021, according to a five-year shipping reconstruction plan. Owing to an increase in cargo volume after COVID-19, HMM has maintained its high global competitiveness [7]. However, there is no guarantee that it will continue to maintain market dominance in the future. As pointed out in traditional economic theory, Korean shipping companies have a scale-up and formal green ESG policy, guaranteeing profitability in any market situation. As sustainability becomes an important criterion for judging a company’s value, the ESG framework of domestic shipping companies has been changing to meet the needs of various stakeholders, such as shippers, charterers, and even ship finance providers, by linking ESG indicators centered on de-carbonization and the environment. Nevertheless, there is still no framework that can prove that companies have a specialized ESG strategy, or that it is linked to the planning and implementation of shipping companies. Therefore, for domestic shipping companies to compete with global ones, it is necessary to prepare a service provision plan based on a new ESG strategy that goes beyond the level of leading M&As and land, sea, and air logistics convergence strategies. For Korean shipping companies to secure sustainable competitiveness, they must actively respond to changes in the external environment, such as by implementing new environmental regulations to prevent ship-caused air pollution and by going beyond quantity-focused competition by expanding ultra-large eco-friendly fleets.

In line with these changing global trends, this study aims to provide basic policy guidelines that can serve as a first step in the development of ESG management for Korean shipping companies, as well as suggest future improvement and development. Based on this objective and by examining detailed case studies, this study aims to derive the major elements of ESG management from shipping companies, as well as improvement measures, such as customized support, from domestic shipping companies. Accordingly, this study performs a semantic network analysis on the ESG management status and characteristics of each company, based on a sustainability report published by THE Alliance, one of the world’s top three global shipping alliances. The details of these companies’ ESG management have been compared and interpreted as a quadruple helix model based on multiple case theory to identify ESG initiatives, the policies common to most shipping companies, and the implementations that need to be specially modeled. Through this study, we intend to derive directions for improvement and identify the customized support needed for shipping companies pursuing the green ESG policy and for small domestic enterprises that have not yet introduced ESG management.

2. Materials and Methods

2.1. Theoretical Underpinnings

2.1.1. Positive Factors of ESG-Related Regulations and Policies

ESG management is an indicator of a company’s impact on the environment, society, and governance. ESG management involves utilizing the profits obtained from the sale of a company’s products and services for environmental protection, social contributions to support the socially disadvantaged, and business activities to comply with laws and ethics [8] (pp. 339–345). In line with the UN SDGs and the Paris Climate Agreement, major countries are improving relevant systems and incorporating ESG-related feedback into their industrial policies to achieve sustainable growth and mitigate and respond to the climate change crisis. Representative national-level policies include the European Union (EU) Green Deal, the United States Green New Deal, and the Korean government’s “Korean New Deal.” In terms of shipping companies, a prime example is that of Maersk, which, in 2018, set a goal of zero carbon emissions by 2050 for the first time in the global shipping industry, for which it will operate its first economical zero-carbon ship by 2030 [9]. In addition, many countries have declared a commitment to carbon neutrality in order to reduce their carbon emissions to zero, with the EU and China declaring that they will achieve this by 2050 and 2060, respectively [10,11].

This growing awareness of climate change and human capital issues is shifting business attention beyond traditional financial performance measurements. Sustainability issues are receiving increasing attention, and the availability of ESG indicators encourages investors to make socially responsible investment decisions [12]. Companies are also progressively adopting actions to achieve the SDGs, which represent an important aspect of the UN’s 2030 agenda. In particular, these companies are now integrating organizational strategies that jointly consider environmental, social, and corporate governance with the goal of creating value for all stakeholders [13]. Owing to the expansion of various social demands for sustainability, corporate social responsibility (CSR), which previously existed only in the realm of ethics, now exists in laws guiding shipping companies, increasing the need for corporate ESG management. ESG management is achieved through various ESG management policies. Policy design is considered an important step in policy-making. A well-designed policy not only addresses sectoral issues among stakeholders but also supports the competitive development of the entire economy. The resolution of ESG issues and leveraging future benefits will need to be addressed in the new policy design process [14].

2.1.2. The Need for ESG Management of Global Liner Shipping Companies

Similar to other companies, profit maximization is a key factor in shipping companies’ corporate sustainability [15]. However, global ocean liner shipping companies are stressing the importance of corporate profits in line with traditional economic theory, as well as raising the level of ESG, which is comprehensively linked to the environment, safety, health, and ethics [16]. Therefore, in the future, along with active efforts to reduce pollution from ships and ports, global ocean liner carriers must consider the socially disadvantaged (sailors and port workers) and switch to a management system that complies with global standards, attracting financially sustainable investment from ship finance institutions and securing cargo rights from shippers [17]. For these companies to grow, it is vital that they form three pillars: environmental protection linked to the global logistics chain networks, social contribution to the marine industry, and digital platform-based management systems.

Meanwhile, when the World Health Organization declared the COVID-19 pandemic in 2020, analysts projected that the global economy would rapidly contract, and shipping demand would substantially decline. However, global ocean liner shipping companies promoted blank sailing centered on shipping alliances to minimize the impact of the short-term drop in freight rates. Moreover, to actively comply with IMO environmental regulations, from the third quarter of 2020, the global shipping market expanded the decommissioning of old ships, thereby reducing capacity. Owing to the shortage in container boxes caused by port congestion and the rise in container cargo demand, the boom in shipping continued until January 2022 [18]. Nevertheless, to maintain and strengthen their dominant market position, domestic shipping companies must not only build business portfolios to achieve stable shipping rates, but also actively introduce and improve the ESG management demanded by shippers and ship financiers.

2.2. Method

2.2.1. Semantic Network Analysis

This study attempts to determine the current status of ESG management in global shipping companies, deriving its major elements as seen in these companies. Semantic network analysis is a technique that identifies the semantic relationships between meaningful words in a text and forms networks to analyze various meanings and characteristics in it [19]. It is based on a quantitative representation of the number of repetitions by a simple frequency analysis, and an understanding of the relationship between the concepts without over-emphasizing its importance [20] (pp. 201–218). Semantic network analysis goes beyond simply analyzing the frequency of words. It analyzes the connections between words, providing qualitative researchers with an approach to interpreting data. In particular, it can be used to convert large amounts of unstructured textual data into visualizations that can be interpreted in a new way [21]. Visualization of these qualitative data can provide researchers with a summary of the data and facilitate the identification of themes and patterns based on the results [22]. Therefore, the semantic network analysis used in this study can be used effectively to systematically identify and analyze the ESG management policies of global shipping companies. This is because semantic network analysis not only extracts the key concepts that occupy an important position in the texts on a topic but also identifies the network connections between them [23]. In this study, a centrality analysis was performed, whereby we express how close a node is to the semantic network’s center. Techniques for measuring centrality include degree, closeness, and betweenness centrality, as well as eccentricity [24]. 1rality indicates the degree to which one node is connected to the others in the entire network; a higher degree centrality signifies a greater influence of the node on the network. Degree centrality is calculated as follows [25] (pp. 563–581):

$$\mathrm{Degree}\mathrm{centrality}=\frac{d\left(ni\right)}{g-1}$$

(1)

where $g$ is the total number of nodes (words in the text), and $d\left(ni\right)$ is the degree of connectedness of node $n$ (word $n$).

Closeness centrality examines proximity between nodes and measures the degree of contact between one node and the others. The distance between the nodes is key, and this indicator is used to understand the overall relationships of the entire network. A high closeness centrality indicates that the path from the target node to others is short, signifying that it is a keyword with a central position. Closeness centrality is calculated as follows [25] (pp. 563–581):

$$\mathrm{Closeness}\mathrm{centrality}=\frac{g-1}{\left[{\sum }_{j=1}^{g}d(ni,nj)\right]}$$

(2)

where $g$ is the total number of nodes (words), and $d\left(ni,nj\right)$ is the distance from node $i$ (word $i$) to node $j$(word $j$).

Betweenness centrality examines the relationship between words that are not directly connected by measuring the degree to which one node is located between the others in the network. A high betweenness centrality signifies that a word has a strong intermediary or mediating role that connects other nodes, indicating that the flow of information through the node has a strong influence [26]. Betweenness centrality is calculated as follows [25] (pp. 563–581):

$$\mathrm{Betweenness}\mathrm{centrality}=\frac{{\sum }_{j<k}g\frac{ni}{gjk}}{\left[\frac{(g-1)(g-2)}{2}\right]}$$

(3)

where $gjk$ is the number of shortest paths from node $j$ (word $j$) to node $k$ (word $k$), $gik\left(ni\right)$ is the number of times node $i$ (word $i$) is passed through on the shortest path from node $j$ (word $j$) to node $\mathrm{k}$ (word $\mathrm{k}$), $\frac{\left(g-1\right)\left(g-2\right)}{2}$ is the total number of all node pairs except node $i$ (word $i$), and $\frac{{\sum }_{j<k}g\frac{ni}{gjk}}{\left[\frac{\left(g-1\right)\left(g-2\right)}{2}\right]}$ is the probability of passing through node $\mathrm{i}$ (word $\mathrm{i}$) in the progression of the shortest path for all node pairs.

Eccentricity measures the number of paths from one node to the farthest node in the network. The maximum eccentricity signifies the diameter of the entire network. More connections through eccentricity indicate more opportunities and influence between words [27].

2.2.2. Multi-Case Analysis Based on the Quadruple Helix Model

Similar to engineering experiments and statistical analysis research methods, a case study refers to a study that explains logic based on a “sample.” The purpose of such a study is not to investigate the quantified frequency or number of cases according to statistical generalization methods but to perform an analysis based on a generalization theory that analyzes commonalities and differences by extending the applied theory based on the cases of qualitative targets [28]. A qualitative case study is the in-depth examination and analysis of a case, which allows for a holistic understanding and interpretation of the case by identifying important factors related to it. In addition, a qualitative case study is limited and specific in that it is not a study of a never-ending phenomenon but a study within a bounded system [29,30]. This study derives its theoretical proof and subsequent direction for improving ESG by comparatively analyzing multiple case studies, namely Hapag-Lloyd, Yang Ming, ONE, and HMM. This offers a more diverse range of fact relationships [31] (pp. 14–19). The limitation in this method is that the subjectivity of the researcher may be projected [32]. Nevertheless, this approach can categorize, distinguish, and intensively and effectively explain actions that include the complexity and distinct attributes of a specified case in a specific situation [33] (pp. 725–742). Furthermore, case studies can generate background material for discussion of a specific problem, are open-ended, and are often used in situations where a precise solution is difficult to find [34]. Therefore, as the trend of digitization and eco-friendliness of the shipping industry is increasing, we limited the comparison target in this study to THE Alliance and applied the multiple case study theory to clearly distinguish the boundaries and achievements of phenomena through empirical exploration. THE Alliance is one of the world’s three major ocean container shipping alliances, and its members include several Korean shipping companies. We selected a shipping company belonging to THE Alliance as the target of this study because they have been a leader in ESG management standards and monopolizing them in the global ocean liner market for a long time. Therefore, it is appropriate to conduct a comparative analysis of the overall shipping market through these companies, deriving differences and similarities between comparison targets and presenting examples of appropriate system operations and benchmarks [35] (pp. 27–56). Therefore, a quadruple helix model was constructed to examine the similarities and differences between the four companies regarding each element of ESG management (environmental, social, and governance). It can be observed that the three four-spiral frameworks (E, S, and G) circulate within the concept of comprehensive ESG management. In other words, based on the sustainability report of each shipping company belonging to THE Alliance, we attempted to determine the relationship between the core ESG management elements of the four global regular shipping companies through qualitative interpretation using the quadruple helix model, as shown in Figure 1. We also derived the elements and implementation contents commonly used by the representative global shipping companies, as these could be specially modeled to suggest the future direction of ESG management for shipping companies.

2.2.3. Data Collection and Ground of Interpretation

This study presents a semantic map by analyzing THE Alliance, which includes HMM, a Korean shipping company, based on semantic network analysis. In addition, because the types of ships and shipping operations handled by the various companies are different, the subjects of this study were companies from three major shipping alliances with common conditions, global representation, and high global competitiveness. Moreover, global companies are continuously publishing sustainability reports to highlight their ESG initiatives and management strategies. Based on the guidelines of the Global Reporting Initiative (GRI), sustainability reports measure and disclose an organization’s performance for sustainable development, and publishing this report is considered an activity that showcases a company’s responsibilities to its internal and external stakeholders. Therefore, this study attempts to derive meaningful results by researching and analyzing the sustainability reports of shipping companies belonging to THE Alliance.

2.3. Research Process

This study aims to understand the ESG management status and characteristics of global shipping companies in terms of their eco-friendly practices, human rights activities, and pro-social competitiveness, as well as to develop improvement measures for domestic shipping companies. Although several previous studies have dealt with the economic aspects of sustainable management in the shipping industry, few have focused on shipping companies’ ESG management. Therefore, this study seeks to derive unprecedented insights on shipping companies’ ESG management by utilizing a new approach centered on their ESG management policies. For this purpose, semantic network analysis and multi-case analysis using the quadruple helix model are performed, and ESG management policies practiced by global shipping companies are closely reviewed. Consequently, priority and common core elements for each global shipping company are derived, and policy guidelines that small- and medium-sized domestic and foreign shipping companies can utilize in the future are presented. In particular, based on the results of this study, policies are suggested to ensure that domestic small- and medium-sized shipping companies are able to implement effective ESG management policies.

Based on the previous literature review, we identified several research questions:

• Why do shipping companies require ESG management?
• What ESG policies have been established and implemented by the allied shipping companies belonging to THE Alliance: HMM, Hapag-Lloyd, Yang Ming, and ONE?
• What ESG policies have been established and implemented by representative global shipping companies?
• In which areas should domestic shipping companies improve to ensure they can utilize the ESG management trends of global shipping companies?

Based on these questions, this study aims to investigate major ESG-related factors through simple keyword and semantic network analysis of the sustainability reports of shipping companies, as well as horizontally compare their ESG management status and future vision. In addition, based on multiple case theory, descriptive and exploratory interpretations of information related to the listed ESG factors are performed. We aim to derive suggestions for improvement and directions for domestic shipping companies through the research process and design shown in Figure 2.

3. Results

3.1. Global Shipping ESG Interest and Necessity

Before examining shipping companies’ ESG management status, we examined global ESG using Web of Science (WOS), one of the most preeminent and pioneering media in the world, to determine the overall status of global ESG management. This study identified the main factors from a preemptive perspective on ESG management by collecting papers with the keyword “ESG” using WOS. From 1 January 2015 to 30 December 2021, we searched for SCIE or higher papers on the WOS website, focusing on the keyword “ESG.” A total of 434 registered and reviewed articles were collected from publishers such as the Multidisciplinary Digital Publishing Institute (MDPI); Wiley; Taylor and Francis; and Elsevier, on which a semantic network analysis was performed.

The node with the highest degree centrality in the entire network was “ESG” (68), followed by “sustainable development” (15), with frequency being prioritized. The results of degree, closeness, and betweenness centrality among the nodes differed slightly, and the degree of eccentricity was nearly identical throughout the network, indicating that all connected nodes have a certain influence. Regarding closeness centrality, the “CSR” (0.68) and “sustainable development” (0.62) nodes showed high proximity around “ESG,” followed by “firm value” (0.61) and “cost of debt” (0.61), indicating that carbon emissions and sustainable development are key to ESG and that ESG management impacts the value and operations of a company. Furthermore, through nodes such as “CSR” (28.79), “sustainable development” (20.27), and “emerging markets” (22.00), which have high betweenness centrality, we found that carbon emissions, sustainable development, and corporate management were significantly important in relation to the core node (ESG). Accordingly, it was found that “sustainable development,” “CSR,” “environmental,” and “firm value” have a primary connection to the core node. However, according to the analysis of papers related to ESG on WOS, representative keywords related to the shipping industry (such as “ship,” “maritime,” “marine,” and so on) are still not connected in the form of mutual nodes, suggesting that ESG is still not relevant to the shipping industry. Thus, it was determined that investigation of the ESG management status and characteristics of shipping companies was required.

Therefore, to determine issues specific to the shipping sector, this study examined the key words or activities of ESG management performed by shipping companies to achieve sustainability goals based on the sustainability report issued by THE Alliance.

3.2. Result of Semantic Network Analysis

3.2.1. HMM Case

In November 2019, HMM became the only domestic shipping company to join the “Getting to Zero Coalition.” It designed carbon-neutral ships, declared its commitment to being an eco-friendly player in the global logistics chain, and constructed a global collaboration system, making it the first domestic shipping company to implement ESG management. It established a sustainability management system in 2019, and it set sector-specific goals to be achieved by 2025, focusing on the three components of ESG [36]. Figure 3 shows the semantic network analysis results of the “HMM Sustainability Report,” which was published over three years. The node with the highest degree centrality in the entire network was “environment” (144), followed by “sustainability” (138). The eccentricity of this network was mostly similar, indicating that the connected nodes have a certain influence. “Sustainability” (0.91), “corporate” (0.84), “greenhouse gas (GHG)” (0.81), and “safety” (0.81) showed the highest closeness centrality based on “environment” (0.81), indicating that HMM’s ESG management focuses on environmental sustainability and carbon emissions, and that it considers corporate management important. Moreover, the high betweenness centrality of “sustainability” (29.02), “health” (22.01), “emission” (20.28), and “responsibility” (17.58) indicates the high importance given to the sustainable development of the environment and carbon emission management. Hence, “sustainability,” “GHG,” “emission,” and “responsibility” showed major connectivity with the core node.

3.2.2. Hapag-Lloyd Case

According to the “Hapag-Lloyd Sustainability Report 2020,” 237 ships of Hapag-Lloyd, a global shipping company, transported approximately 11.8 million TEUs of cargo annually as of 2020. Figure 4 shows the semantic network analysis results of the “Hapag-Lloyd Sustainability Report,” which was published over three years. The node with the highest degree centrality in the entire network was “energy control” (159), which had the greatest influence in the network, demonstrating that Hapag-Lloyd has a high interest in energy strategy (environment) among those of sustainable development. The eccentricity of this network was mostly similar, indicating that the connected nodes have a certain influence. Based on “energy control” (0.75), the closeness centrality of “require” (0.58), “responsibility” (0.56), “customer” (0.55), and “risk” (0.55) was high, indicating that Hapag-Lloyd emphasizes corporate responsibility and risk in relation to the energy strategy of sustainability management, focusing mainly on customer service. Meanwhile, “safety” (27.88), “health” (21.57), “require” (20.18), and “responsibility” (17.48) showed relatively high betweenness centrality, indicating that safety, responsibility, and risk are important in Hapag-Lloyd’s ESG management. Thus, the report presented by Hapag-Lloyd shows that they have the greatest interest in the environmental (E) energy strategy, and keywords such as “safety,” “responsibility,” “customer,” and “risk” showed connectivity.

3.2.3. Ocean Network Express Case

In 2018, three Japanese shipping companies, Kawasaki Kisen Kaisha Ltd., Mitsui O.S.K. Lines, and Nippon Yusen Kaisha, merged to establish the Ocean Network Express (ONE). According to the “ONE Sustainability Report 2021,” ONE is the world’s sixth largest shipping company with a capacity of approximately 1.61 million TEUs, and it provides services to more than 120 countries. Figure 5 shows the semantic network analysis results of the “ONE Sustainability Report,” which was published by ONE over three years. The node with the highest degree centrality in the entire network was “ethical responsibility” (125), indicating the company’s high interest in ethical responsibility in corporate management. Based on “ethical responsibility” (0.58), the closeness centrality of the nodes “corporation” (0.96), “reduction” (0.95), “committee” (0.92), and “customer” (0.92) was high, demonstrating that ONE focuses on corporate management and customer service. Meanwhile, “employer” (27.72), “environment” (23.7), “corporation” (21.63), and “reduction” (19.27) showed relatively high betweenness centrality, indicating that ONE emphasizes not only sustainable management but also sustainable environmental strategy. Connectivity was also observed between keywords such as “regulation” and “service.”

3.2.4. YANG MING Case

According to the “Yang Ming Marine Transport Corporation’s Corporate Social Responsibility Report” [37], Yang Ming was established in 1972 and is the eighth largest shipping company in the world, transporting 670,000 TEUs as of 2019. Figure 6 shows the semantic network analysis results of Yang Ming’s CSR report, which they published over three years. The node with the highest degree centrality in the entire network was “social contribution” (123), demonstrating the company’s high interest in social contribution. The closeness centrality of nodes such as “employer” (0.88), “welfare” (0.82), and “work life” (0.81) around the core node was high, indicating that Yang Ming focuses on employee welfare and the working environment in corporate management. Meanwhile, “environment” (22.1) showed relatively high betweenness centrality, indicating that the environmental factor is also important within their sustainability management. Connectivity was also observed with keywords such as “customer,” “reduction,” “balance,” and “law.”

3.3. Results of Multi-Case Analysis Based on the Quadruple Helix Model

The results of the multi-case analysis of the companies’ ESG performance, as specified in the sustainability and CSR reports, are as follows:

3.3.1. HMM

In the “E” (environmental) category, HMM has prioritized a systematic eco-friendly management system and a perfect response to climate change, taking “climate change response, eco-friendly logistics, and safety and health” as its core values. A major initiative is the company’s participation in “Clean Cargo,” a global cooperative chain between cargo owners, shipping companies, freight forwarders, and logistics companies that aims to reduce the environmental impacts of cargo transportation and strengthen sustainability. HMM also internally formed the “Environmental Safety Committee,” which established long-term plans and detailed goals for environmental management, periodically communicating the results to stakeholders related to ships and land [38]. HMM established the greenhouse gases management system in 2017 and has since been monitoring GHG emissions in real time, continuously improving energy efficiency by installing high-efficiency facilities on ships. Through these policies, HMM has reduced GHG emissions, as shown in

Table 1. GHG management status.

Classification	Unit	2018	2019	2020
Greenhouse gas emissions per unit	gCO2/DWT-km	3.8	3.1	2.7
Greenhouse gas reduction rate	%	25.2	39.8	46.7

Source: HMM Sustainability Report 2020.

.

In the “S” (social) category, HMM has made efforts to achieve digitalization and realize a sustainable community for customers, employees, and local communities. Notably, to maintain the digital-based smart management of ship operations for 20 ultra-large ships—including 12 and 8 of the world’s largest 24,000 and 16,000 TEU container ships, respectively—HMM has constructed a fleet control center as an affiliate organization of its research and development center, providing preemptive customer service since 2020. HMM is a global shipping company under THE Alliance, providing worldwide services, mainly on routes in the Americas, Europe, and Asia. Furthermore, it offers an “e-Service” that improves customer convenience. It has also established an education center, the HMM Ocean Service (HOS) Training Center, which introduces programs such as overseas boarding training to cultivate smart seafarers who are at the core of ship operations [38].

In the “G” (governance) category, HMM has prioritized the establishment of sound governance, including ethical and human rights management, and also operates an integrated risk management system to minimize damage caused by uncertainty during corporate activities. Furthermore, it complies with basic human rights principles, such as those set out in the Universal Declaration of Human Rights and the Human Rights and Labor Principles, as well as state-ratified recommendations of the International Labour Organization (ILO). This shows that HMM respects the diversity of employees in terms of gender, nationality, age, and so on. In addition, HMM has improved its human rights and welfare structure by continuously enhancing work methods, even implementing telecommuting to protect the health and safety of its employees in relation to COVID-19 [38]. Although, as of 2021, HMM is still using operating funds through financial support from creditors, the National Information and Credit Evaluation Investors Service in Korea has given HMM a long-term credit rating of “BBB.” However, in addition to enhancing their corporate value by raising their financial performance through continuous ESG management improvements, as environmental issues and other societal impacts grow, HMM must make efforts to improve its ESG rating through sustainability management and corporate value enhancement, aiming to achieve carbon neutrality by 2050 by installing scrubbers, ballast water treatment systems, and so on.

3.3.2. Hapag-Lloyd

In the “E” (environment) category, Hapag-Lloyd has established a ship energy efficiency management plan to minimize fuel oil consumption. For this purpose, seafarers are trained on energy efficiency topics, such as fleet monitoring, speed control, and draft optimization. Moreover, Hapag-Lloyd introduced software to use fuel oil and ship navigation information to maximize fleet utilization, monitor the conditions of hulls and propeller attachments, and remove components to increase energy efficiency. Hapag-Lloyd also works to reduce carbon emissions by adopting LNG propulsion for its new and remodeled ships on some routes as a means of alternative energy.

In the “S” (social) category, the company began the “Future Way of Working @ Hapag-Lloyd” project to promote work–life balance. It also operates a system in which, at the end of each ship voyage, the captain or interested seafarers can share opinions on the technical aspects of the voyage, worker performance, additional placement plans, and so on. Every year, through “Global Staff Dialogue,” the company determines areas to develop employee competence.

In the “G” (governance) category, Hapag-Lloyd supports young women workers through the “Women’s Business Forum”; additionally, 30% of the board of directors are women. Moreover, programs such as “Breakfast with the executive board” and “Lunch with the management” are offered to provide employees with an insight into the management’s perspective [39].

3.3.3. Ocean Network Express

In the “E” (environmental) category, to support the IMO GHG reduction goal, ONE aims to reduce TEU-km carbon emissions by 25% and 50% by 2030 and 2050, respectively, compared with 2018 levels. For this purpose, propeller boss caps have been installed in some ships to improve fuel efficiency. Experiments on the feasibility of low-carbon fuels, such as biofuels, are also expanding.

In the “S” (social) category, to provide workers with a more effective learning environment in which they can actively participate, ONE launched the online learning platform “THRIVE,” offering workers opportunities to learn diverse topics such as leadership, management, communication, and IT. It also continuously monitors occupational diseases and accidents and takes preventive measures (training, safety signs, etc.) to avoid them. To prevent forced or child labor and other human rights violations in the course of business activities, ONE not only complies with various conventions and regulations but also establishes supply chain management guidelines for suppliers who provide products and services to the company. Furthermore, through collaborations with local NGOs, it conducts social activities, such as providing free delivery of hygiene products and wheelchairs and contributing to scholarship projects.

In the “G” (governance) category, ONE has established and implemented ethical standards that all employees must comply with, such as the “ONE Basic Anti-Bribery Policy.” The company also provides anti-corruption training and operates whistleblowing channels and procedures to raise effectiveness [40].

3.3.4. Yang Ming

In the “E” (environmental) category, Yang Ming has been participating actively in various environment-related associations. These include the World Shipping Council, IMO, Clean Cargo, Boosting Initiatives for Collaborative Emission-Reduction with the Power of Shippers, Rating System, and Eco Vadis. Yang Ming contributes to IMO’s GHG reduction efforts by applying 14,000 TEU containers; reducing the navigation and design speed of existing and new ships, respectively; installing energy reduction devices; and establishing a project team to evaluate the applicability of LNG fuel for containers. Through these efforts, Yang Ming reduced its CO₂ emissions in 2019 by 51.62% compared with 2008, and set a goal of further reducing it by 60% by 2025.

In the “S” (social) category, Yang Ming announced the “Human Rights Policy” through the board of directors, educating employees through e-learning to prevent human rights violations and discrimination. Moreover, in the spirit of gender equality, efforts have been made to increase the proportion of women in managerial positions. Through collaborations with maritime schools, Yang Ming invites school staff onto its ships; in doing so, it provides them with training opportunities, enhances communication between the maritime schools and itself, improves the image of the maritime profession, and promotes CSR. It established the “Human Resource Development Policy” to continuously promote the development of employee competency and prevent industrial accidents. It also acquired certifications for industrial safety and health management systems, such as “ISO45001” and “Taiwan’s CNS 45001.” In regard to social contribution activities, Yang Ming established the “Culture and Art Museum” and the “Yang Ming Museum of Marine Exploration” to promote local culture through diverse marine culture-related exhibition activities.

In the “G” (governance) category, Yang Ming established the “board of directors’ performance evaluation procedures” to assess the performance of the board, individual directors, and committees at the end of the fiscal year to ensure an effective board of directors. It also enhances management transparency by improving the disclosure rate of information in English and creates and promotes various regulations and guidelines to involve all employees in management activities. Furthermore, Yang Ming established the “case reporting procedure guidelines,” operating a channel through which all employees, suppliers, customers, and shareholders can report unethical or illegal behavior [41].

3.4. Result of the Pooling Analysis Approach

This study selected suitable ESG reports with rich text, published by target companies between 2019 and 2021, on which to perform semantic network analysis. The structural relationship between the words in the reports was analyzed by constructing a network between linked words. This study structured the text contained in each report and derived the most important factor based on the semantic connection between keywords, as these words had a specific meaning when they were combined in a specific form from a network analysis perspective. In other words, the frequency of keywords that occur at the same time can be interpreted semantically as a “relationship” in social network analysis. This is because language network analysis is based on the theory and methodology of social network analysis, and it includes nodes as a composite of one or more related words for concepts in language network analysis. Finally, this study can explain the link between these concepts and the ESG policy included in the reports issued by THE Alliance, which represents the liner shipping market. Based on the keywords of each company and the words with high connectivity (excluding comprehensive words), the key elements of the company’s ESG management strategy are shown in

Table 2. ESG core strategic elements of enterprises by semantic network analysis.

Category	Keywords	Highly-Connected Words	ESG Core Strategic Elements
HMM	Environment (E)	GHG emission responsibility	E (Environment)
Hapag-Lloyd	Energy control (E)	responsibility customer regulation	E (Environment)
ONE	Ethical responsibility (G)	committee customer employer	G (Governance)
Yang Ming	Social contribute (S)	employer welfare work life	S (Social)

.

There were some differences in the future vision of the strategic ESG direction promoted by leading global shipping companies; therefore, we decided to interpret the details of key factors and those with high connectivity in an exploratory manner. Thus, the details of each company’s ESG implementation were interpreted as explanatory, descriptive, and exploratory, focusing on the ESG strategy keywords of each company, which were obtained through semantic network analysis. Thus, the ESG and dominant strategies that were commonly implemented by global shipping companies were examined using multi-case analysis with the quadruple helix model. The results are presented in

Table 3. Key elements of ESG based on pool analysis.

Category	Contents
E (Environment)	(1) GHG management and de-carbonization strategy
	(2) Air quality management
	(3) Protection of the sea and marine biodiversity
	(4) Energy efficiency management
	(5) Investment in eco-friendly equipment
	(6) Disposal of waste and effluents
	(7) Ship recycling
S (Social)	(1) Employee welfare and work–life balance
	(2) Employee health, safety, and well-being
	(3) Employee learning and talent development training
	(4) Human rights and labor practices
	(5) Diversity and equal opportunities
	(6) Customer satisfaction strategy
	(7) Sustainable supply chain management
	(8) Labor-management open communication
	(9) Social contribution management
G (Governance)	(1) Ethical management system
	(2) Combating corruption and bribery
	(3) Risk management and response
	(4) Tax management policy and responsible tax practices
	(5) Information and digital security reinforcement
	(6) Internal and external audit system

Source: Based on each company’s “Sustainability Report 2019–2021” and Gephi keyword counting.

. These findings can help domestic and emerging shipping companies implement and improve their own ESG activities.

4. Discussion

4.1. Major and Essential Elements of ESG Management of Shipping Companies

On the basis of semantic network and multi-case analyses, this study attempted to derive improvement measures for domestic companies’ ESG management by examining the major and essential ESG policy elements of world-renowned and competitive global liner shipping companies. Through this, we noted the following:

First, the various ESG keywords derived through the semantic network analysis represent the major policies to be implemented by domestic and emerging shipping companies. In the environmental (E) sector, regulations on GHG emissions and environmental responsibility are important, while in the social (S) sector, employee welfare and the work-life balance are prioritized. Ethical responsibility is prominent in the governance sector (G). Therefore, domestic shipping companies should focus on these policies for future ESG management.

Next, ESG policy elements commonly promoted by global shipping companies are the basic and essential ESG elements that must be implemented by these shipping companies. Environmental policies, such as GHG and air pollutant emission regulations and eco-friendly facility construction and investment, should be implemented in the environmental sector (E). Shipping companies should protect marine ecosystems and preserve their biodiversity. In addition, it is necessary to efficiently manage ship energy, promote sustainable solutions to ship waste and harmful substances, and consider the procedures for eco-friendly ship dismantling and recycling. In the social sector (S), the welfare, safety, and health management of corporate employees should be implemented, and training and refresher courses for marine and land employees should be conducted. Smooth communication between laborers and management is essential. In addition, shipping companies should respect the human rights of both their own and foreign seafarers, comply with the ILO labor standards, and encourage diversity by increasing the number of mixed-ride ships. In addition, social contribution activities should be promoted to achieve customer satisfaction and to fulfill global social responsibilities by improving the quality of shipping services. In the governance sector (G), human rights and ethical policies should be promoted by management, and policies to prevent corruption by corporate executives should be well formulated and strictly enforced. In addition, compliance with various tax payment regulations through corporate compliance management, the operation of a risk management system, prevention of illegal activities, and the strengthening of corporate security should be promoted.

Finally, the results of the analysis show the factors of ESG promotion strategies by ESG sector, as well as those commonly promoted by global shipping companies. These factors can be the basic elements of ESG management that global and domestic shipping companies must implement in the future. Through this analysis, it has been found that the shipping companies in THE Alliance systematically practice ESG management with a long-term vision based on each company’s circumstances. A comprehensive comparison with representative examples from each company is shown in

Table 4. Representative examples and a comprehensive comparison of each company.

Category	Environment (E)	Social (S)	Governance (G)	Remark
HMM	Construct and operate comprehensive GHG management system	Construct and operate general ship operations room	Construct and operate integrated risk management system	Eco-friendly management-oriented
Hapag-Lloyd	Establish and operate ship energy efficiency management plan	Operate projects for work–life balance	Increase number of woman directors	Eco-friendly energy management-oriented
ONE	Introduce special fuel-saving devices	Social contribution activities through NGO collaborations	Operate whistleblowing channels and procedures	Ethical organizational management-oriented
Yang Ming	Join environment-related institutions	Local culture vitalization project	Establish and operate board of directors performance evaluation procedures	Social diversity management-oriented

Source: Based on each company’s “Sustainability Report 2019–2021”.

. In addition to their common ESG factors, there are clear differences in their directions of focus. However, in the field of global liner shipping, HMM is the only Korean shipping company that has established and implemented ESG management. Pan Ocean, KSS Line, Korea Lines, Heung-A Shipping, and Pan Continental Shipping also publish sustainability reports, but since they implement eco-friendly policies primarily by increasing ship energy efficiency, their contribution cannot be compared with the social contributions and management transparency of other global shipping companies. As such, government support is necessary alongside the company’s own efforts.

4.2. Suggestions

4.2.1. Cultivate ESG-Related Experts in Shipping Companies

In Korea, the Korean Chamber of Commerce and Federation of Korean Industries formed an ESG-related organization and coalition in 2021; however, as it is an ESG organization for general companies, it lacks specialized shipping expertise [42]. Accordingly, to properly handle the ESG management of shipping companies, one must have experience in shipping and shipbuilding, which can then be combined with ESG knowledge and applied to shipping companies. Moreover, as seen in

Table 5. Trade dependence of major shipping countries in 2019.

Shipping Ranking	Nation	Trade Dependency (%)
1	Greece	47.76
2	Japan	28.08
3	China	33.49
4	Singapore	209.6
5	Hong Kong	293.26
6	Germany	70.82
7	Republic of Korea	63.51
8	Norway	46.79
9	Bermuda	22.60
10	USA	19.34

Source: Based on Korea Shipowners’ Association Statics and Reports, 2019.

, Korea’s trade dependence is considerably high, at 63.51%. Given that 99.7% of imports and exports are transported by ship, the shipping industry can be regarded as a key industry in Korea [43]. Therefore, preemptively establishing an institution that specializes in shipping companies’ ESG management is a high priority. However, since establishing a national institution is complex because of the necessary bureaucratic procedures (that is, amending laws and site selection), shipping companies should first form a new coalition at a private level, accumulate ESG-related big data, and train experts in ESG management. When these actors form an international network, we expect the domestic shipbuilding and shipping industries to develop and improve the international competitiveness.

4.2.2. Strengthen Government-Level Support for Improving the ESG Management of Small- and Medium-Sized Shipping Companies

At the 76th IMO MEPC meeting held on 10–17 June 2021, a plan was adopted to reduce carbon emissions by 2% per year over four years, from 2023 to 2026. Additionally, based on the “2020 Plan,” the IMO set a goal to reduce CO₂ and GHG emissions from ships by 70% and 50%, respectively, by 2050. The reduction plan was first implemented in 2021. In recent years, because of COVID-19, the government’s Green New Deal policy, and the spread of eco-friendly trends, there is a growing consensus on expanding the supply of capital for green industries, with successful cases related to green finance increasing in Korea as well. For example, Pan Ocean successfully issued green bonds through projects to introduce LNG-propelled ships, rotor sails, and so on [44]. However, green capital investment remains a significant barrier for small- and medium-sized domestic shipping companies [43]. Although the Ministry of Environment and financial institutions announced that they would create a green classification system and best practices for green finance, which would be adjusted and improved in the future through a pilot application, not much is known about who exactly will receive the investments or what the completion status is. Therefore, small- and medium-sized shipping companies must secure competitiveness through preemptive support measures at the government level [45].

4.2.3. Construct Maritime-Specialized ESG Evaluation System and Introduce Voluntary ESG Management Culture

Since 2019, the Korea Exchange has mandated that corporations listed on stock markets with KRW 2 trillion or more in assets must disclose corporate governance reports. Thus, among the Korean liner shipping companies, HMM, SM Line, and Heung-A Shipping are liable to disclose ESG-related information. In particular, since the government or investment institutions decide whether to invest based on disclosed ESG information, ESG management is now becoming a key factor in shipping companies receiving financial investment, rather than simply being a factor in managing the corporate image. In Korea, which has a short history of ESG, some companies publish their own sustainability management reports based on GRI standards. However, as GRI standards apply only to general issues, it may be difficult to identify specific information and use the reports to assess or compare company performance. Moreover, ESG scores may be inconsistent because companies use different measurement criteria; therefore, blindly trusting sustainability management reports or research published by the companies themselves can increase the risk for biased information [46]. To overcome these problems, shipping companies voluntarily introduced “Shipping ESG,” which is based on the ESG evaluation index prepared by the International Association of Classification Societies, a major organization that provides technical support and certifications in the shipbuilding and marine sectors. Moreover, the expansion of third-party certification must be actively reviewed.

5. Conclusions

ESG is a new assessment value in the shipping industry that originates from the IMO’s carbon neutrality policy. It serves as a springboard for realizing balanced development that considers the future needs of social development, economic growth, and environmental conservation. If shipping companies lag behind in global efforts for sustainable growth, issues such as increased ship-induced pollution, rising waste treatment costs, and payment for damages caused by marine pollution will persist. This introduces potential new risks that negatively impact corporate image, generate financial losses, and even affect capital investment from financial investors. Domestic shipping companies in Korea are still in the early stages of introducing ESG management and have not progressed beyond imitating the ESG policies of overseas shipping companies. However, blind imitation and application may backfire. Thus, although domestic shipping companies may follow the ESG policies of overseas shipping companies that already lead the market, they must also strive to implement ESG policies tailored to their circumstances through continuous research.

This study focused on global ocean liners that are promoting conversion to digital technology and environmentally sustainable practices through ESG management. As a result, both domestic and emerging shipping companies should implement the following:

• The environmental sector:

  ●

  An environmental policy responding to climate change;

  ●

  An environmental policy for the protection of marine ecosystems and biodiversity;

  ●

  An environmental policy for the energy and waste management of ships.

• The social sector:

  ●

  A social policy for employee welfare and safety management;

  ●

  A training policy for marine crew and land employees;

  ●

  A human rights policy, especially regarding the human rights of seafarers.

• The governance sector:

  ●

  Human rights and ethical management;

  ●

  Risk management policies that can respond to internal and external risks;

  ●

  Compliance management to prevent illegal activities and ensure dutiful tax payments.

Finally, through a comparison focusing on the concept of ESG management, policy institutionalization, and the characteristics of Hapag-Lloyd, Yang Ming, ONE, and HMM, this study suggests the following improvement measures for developing ESG management to a global standard in domestic shipping companies:

• Cultivate ESG expertise in the maritime field;
• Strengthen support and policies for small- and medium-sized shipping companies;
• Design a maritime-specialized ESG evaluation system and introduce a voluntary ESG management culture.

This study has certain limitations. For small- and medium-sized domestic shipping companies with limited access to investment funds, a failed ESG policy can result in the demise of a company. Therefore, these companies must be meticulous in the adoption of ESG strategies to ensure suitability to their circumstances, and should not blindly follow global shipping ESG policies. In addition, there may be bias in the sample because this study targeted only shipping companies under THE Alliance, and, as companies belonging to various shipping alliances were not considered, the results cannot be generalized easily. Despite these limitations, this study analyzed the ESG management policies of global ocean liner shipping companies, drew implications from these policies, and suggested improvement measures for domestic shipping companies that have not yet adopted ESG management. This study contributes to the development of the domestic shipping industry and to enhancing the global competitiveness of domestic shipping companies through the introduction of ESG management. In the future, it is necessary to conduct research to derive general management policy guidelines that shipping companies can utilize to implement or enhance their ESG management, thereby expanding research on this topic.” In addition, it is imperative to analyze the various factors affecting shipping companies’ ESG management. A study to derive ESG management policy factors suitable for the business and financial environments of domestic small- and medium-sized shipping companies should be conducted considering our proposed ESG management direction.