Financial institutions and investors have urged the European Union to maintain its opposition to new Arctic oil and gas drilling, as the bloc weighs revising its stance to prioritise energy security.
The call highlights investor unease that the energy crisis triggered by the U.S.-Israeli war with Iran could be used to justify rolling back climate commitments, as governments focus on securing supplies.
Nordea Asset Management, part of Nordic lender Nordea, and 11 other financial institutions were among signatories urging the European Commission on Wednesday not to weaken its stance, warning it would undermine both climate goals and long-term energy security.
New Arctic fossil fuel developments would take more than a decade to come online, making them ineffective in addressing the current crisis, said the letter, organised by the Nordic Center for Sustainable Finance and Danish pension fund Sampension and also signed by civil society groups and scientists.
“The Arctic is one of the planet’s most vulnerable ecosystems and home to unique wildlife …. Further oil and gas expansion would add pressure to these globally significant ecosystems, by increasing the risk of oil spills and leakages,” the letter said.
Oil spill simulations suggest more than 90% of spilled oil in certain fields of the Barents Sea would not be recoverable, it added.
The war in Iran has disrupted global energy markets and sent European gas prices surging.
Norway, Europe’s biggest gas supplier but not an EU member, has been pushing Brussels to drop the moratorium.
With many ageing fields, Norwegian production is set to decline in the 2030s unless companies such as Equinor make new discoveries outside mature areas.
Norway’s largest pension company, KLP, also signed the letter.
The EU’s current policy supports a ban on further Arctic oil and gas development and rejects purchases of such hydrocarbons. However, no formal moratorium is in place.
A Commission spokesperson said the EU was reviewing its Arctic policy “in light of the new geopolitical and geoeconomic context” but no conclusions had been reached.
Jacob Ehlerth Jorgensen, head of ESG at Sampension, said the fund backed Norway’s role as an energy supplier but that Arctic drilling was not the answer to Europe’s energy security challenge.
“This is about the next steps, where we really open up some risk – both in terms of energy security, climate and biodiversity – or whether there is a smarter way to do it,” he told Reuters.
(Reporting by Stine Jacobsen)
