Financial Institutions Unite Against Deep-Sea Mining

A group of 37 financial institutions, representing over €3.3 trillion of combined assets, have released a 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.

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,” said Jan Erik Saugestad, CEO of Norway’s Storebrand Asset Management.

 Heavily Contested

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 coastal resources is estimated by the United Nations Development Programme to be US$3 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,” Saker Nusseibeh, CEO of Federated Hermes added.

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.