Leading financial institutions call on governments to not permit deep-sea mining
19 July 2023 – A group of 37 financial institutions, representing over EUR3.3 trillion of combined assets, have released a new joint statement urging governments to protect the ocean and not proceed with deep seabed mining until the environmental, social and economic risks are comprehensively understood, and alternatives to deep-sea minerals have been fully explored.
The Global Financial Institutions Statement to Governments on Deep Seabed Mining, coordinated by the Finance for Biodiversity (FfB) Foundation, has been published before the upcoming Assembly meeting of the International Seabed Authority (ISA), scheduled from July 24-28 in 2023. This meeting holds the potential to grant commercial authorisation for deep-sea mining for the first time.
As signatories of the FfB Pledge, the statement is supported by financial institutions that are committed to helping protect and restore biodiversity and ecosystems through their investment and finance activities.
Scientific environmental concerns
There is widespread concern in the scientific community regarding deep sea mining and the irreversible impact it could have on delicately balanced and sensitive, deep ocean ecosystems. Permitting extraction in this uncharted territory would not only destabilise fragile marine ecosystems but also undermine the very foundations of a circular ocean economy.
“We must remember that the deep sea is really one of the very few pristine ecosystems remaining, and to just open [it up] for exploitation without insight is close to madness. There is increasing recognition that biodiversity loss is a true financial risk and something we must consider when we invest in companies,” says Jan Erik Saugestad, CEO of Storebrand Asset Management.
Uncertain economic viability
The general lack of knowledge concerning the potential benefits and harm associated with this industry exposes financial institutions to significant policy, regulatory, and reputational risks. Moreover, there remains considerable uncertainty surrounding the economic viability and outcomes of deep-sea mining.
“The assumption that deep-sea mining is a key solution for the provision of minerals required for the economic transition to meet climate change goals is heavily contested. Emerging research is already showing that more investment in the circular economy could be a more effective way to achieve the transition to a net-zero economy,” the letter says.
“Deep-sea mining could pose irreversible damage to complex, unique and highly biodiverse ocean ecosystems, which are important sources of economic value for nearly half of the world’s population. The value of marine and costal resources is estimated by the United Nations Development Programme to be USD3 trillion per year. Therefore, more scientific research and analysis is required to understand the risks around deep sea mining, better inform decision-making and avoid irreparable damage,” says Saker Nusseibeh, CEO of Federated Hermes Limited.
Deep-sea mining and the International Seabed Authority (ISA)
Deep-sea mining refers to the extraction of minerals from the ocean floor below 200 meters, which constitutes over 95% of the planet’s biosphere. According to the Environmental Justice Foundation, this practice is projected to disturb millions of tons of seafloor sediments annually, releasing carbon that has accumulated over millions of years into the oceanic carbon cycle.
The ISA is an organisation that governs and regulates activities in the seabed, ocean floor, and subsoil beyond national jurisdiction. Member states meet annually to discuss and formulate the work of the Authority and its Secretariat.
Signatory financial institutions
The following 36 financial institutions signed the letter: Achmea; Achmea Investment Management; Aéma Groupe; Allianz France; Andra AP-fonden; AP3; ASR Nederland N.V.; Australian Ethical Investment; Avesco Sustainable Finance AG; Aviva Plc; Change Finance, PBC; CZ Group; Domini Impact Investments LLC; ERAFP; Etica Funds – Responsible Investments; Federal Finance Gestion; Federated Hermes Limited; GLS Gemeinschaftsbank eG; Karner Blue Capital; La Banque Postale Group; La Financière de l’Echiquier; Mirova; Montpensier Finance; Nordea Asset Management; Oakham Wealth Management Ltd; Ossiam; Pictet Group; Rathbone Greenbank Investments; Robeco; Schelcher Prince Gestion; Storebrand Asset Management; Swedbank Robur; Tribe Impact Capital; Triodos Bank; UBP Asset Management; WHEB Asset Management; and Zencap Asset Management.
This statement will remain open for further financial institutions to sign and will be periodically updated with new signatories at key moments for deep-sea mining throughout 2023.