Exploring how transnational environmental governance and the operation of global value chains (GVCs) intersect is key in explaining the circumstances under which mandatory disclosure can improve the environmental footprint of business operations. We investigate how the governance dynamics of the tanker shipping value chain (a major emitter of greenhouse gases) limits the effectiveness of the European Union (EU) monitoring, reporting, and verification (MRV) regulation, which mandates the disclosure of greenhouse gas emissions for ships calling at EU ports. Although MRV seeks to help shipowners and ship managers save fuel and reduce emissions, it does not address the complexity of power relations along the tanker shipping value chain and currently cannot disentangle how different actors influence the design, operational, commercial, and ocean/weather factors that together determine fuel consumption. In particular, the EU MRV neglects to reflect on how oil majors exert their power and impose their commercial priorities on other actors, and thus co-determine fuel use levels. We conclude that, in its current form, the EU MRV is unlikely to lead to significant environmental upgrading in tanker shipping. More generally, we argue that regulators seeking to facilitate environmental upgrading need to expand their focus beyond the unwanted behaviors of producers of goods and providers of services to also address the incentive structures and demands placed on them by global buyers.
Maritime shipping is the transmission belt of the global economy. It is also a major contributor to global environmental change through its under-regulated air, water and land impacts. It is puzzling that shipping is a lagging sector as it has a well-established global regulatory body—the International Maritime Organization. Drawing on original empirical evidence and archival data, we introduce a four-factor framework to investigate two main questions: why is shipping lagging in its environmental governance; and what is the potential for the International Maritime Organization to orchestrate emerging private ‘green shipping’ initiatives to achieve better ecological outcomes? Contributing to transnational governance theory, we find that conditions stalling regulatory progress include low environmental issue visibility, poor interest alignment, a broadening scope of environmental issues, and growing regulatory fragmentation and uncertainty. The paper concludes with pragmatic recommendations for the International Maritime Organization to acknowledge the regulatory difficulties and seize the opportunity to orchestrate environmental progress.