Financial institutions and investors are urging the European Union to uphold its opposition to new Arctic oil and gas drilling, despite the bloc’s re-evaluation of its stance to prioritise energy security. This call highlights investor unease that the energy crisis, intensified by the U.S.-Israeli war with Iran, could prompt a rollback of climate commitments as governments focus on securing supplies. Nordea Asset Management, part of Nordic lender Nordea, a prominent Nordic financial services group, and eleven other financial institutions were among the signatories of a letter to the European Commission, warning that weakening its position would undermine both climate goals and long-term energy security.
The letter, orchestrated by the Nordic Center for Sustainable Finance and Danish pension fund Sampension, argued that new Arctic fossil fuel developments would take over a decade to become operational, rendering them ineffective in addressing the current energy shortfalls. It also emphasised the Arctic’s status as one of the planet’s most vulnerable ecosystems, home to unique wildlife. Further oil and gas expansion, the signatories warned, would increase the risk of oil spills and leakages, with simulations suggesting over 90% of spilled oil in certain Barents Sea fields would be unrecoverable, adding significant pressure to these globally vital ecosystems.
The EU’s current policy supports a ban on new Arctic oil and gas development and rejects purchasing such hydrocarbons, though no formal moratorium is in place. A Commission spokesperson confirmed the EU is reviewing its Arctic policy in light of the “new geopolitical and geoeconomic context,” with no conclusions yet reached. Norway, Europe’s largest gas supplier and not an EU member, has been advocating for Brussels to lift the moratorium. However, Jacob Ehlerth Jorgensen, head of ESG at Sampension, a Danish pension fund, stated the fund supports Norway’s role as an energy supplier but views Arctic drilling as an unsustainable solution to Europe’s energy security challenges. Norway’s largest pension company, KLP, also signed the letter.
