A number of US and European banks, including DeutcheBank, Morgan Stanley, Goldman Sachs, JP Morgan, Chase Manhattan and Citibank have announced that they will refuse to provide financing for Arctic oil, gas and coal projects. The Arctic Economic Council (AEC) encourage increased engagement on environmentally and socially sound investments that benefit Arctic communities and organizations and ask financial institutions to look to the Arctic for guidance.
AEC supports the Global Climate Goals and Sustainable Development Goals and notes with great concern the reports from the Intergovernmental Panel on Climate Change (IPCC), The United Nations Environment Program (UNEP) and others on the effects of climate change which impact the Arctic twice as hard as rest of the world.
The source of the Arctic climate change is global. Effective action to reduce the Arctic effects of Short-lived Climate Pollutants cannot be limited to Arctic regions or even Arctic States. Limiting the Arctic for economic activity because of climate change would cause a significant hardship on Arctic societies. Banks should devise their policies so climate change will not become a barrier to economic development in this region, doubling the negative effects for the region with both climate change effects and reduced economic development.
Economic sustainability for the Arctic peoples is critical. Rather than dismissing the business activities in the Arctic as a threat to the sustainability agenda, the world should look to the Arctic for guidance.
The Arctic has a leading industrial development track record globally. Business activities and industrial development are governed by a high level of regulation, environmental standards and monitoring. The Pan-Arctic business community has a strong self-interest in ensuring the responsible development of the Arctic. Representing the people and businesses of the Arctic, the Arctic Economic Council´s (AEC) members operate in their own habitat and thus have a strong interest in securing that all operations are conducted sustainably.
Several banks base their discrimination on concerns for global warming due to fossil fuel consumption. However, halting Arctic energy production may not result in even one drop less oil being consumed. It will most likely be produced somewhere else, in many cases in areas with lower environmental standards. This investment discrimination would only compound that impact by imposing economic harm on Arctic communities, while doing nothing to address the consumption of fossil fuels.
The AEC embraces and promotes the use of the Arctic Investment Protocol (AIP) for businesses and investors to focus on the creation of sustainable societies and business in the Arctic. These guidelines reinforce the need to respect local and indigenous communities, protect the environment, practice responsible and transparent business methods, use of best possible knowledge, and encourage strengthening pan-Arctic collaboration. Implementation of the AIP is relevant to the Arctic and the world for the best for climate, environment, inhabitants and business of the Arctic.
Arctic businesses and societies share the global responsibility of keeping the climate change to a minimum. We are committed to the sustainable development of our societies and resources, and expect that banks share the sentiment and see that the Arctic can lead the way in responsible energy development.