A group of European pension funds and investors have urged the European Commission to maintain its opposition to new Arctic oil and gas projects, warning that further fossil fuel expansion in the region would create significant financial, geopolitical and environmental risks.

The intervention came in an open letter coordinated by Danish pension provider Sampension and ActionAid Denmark’s Nordic Center for Sustainable Finance, signed by 127 investors, companies, trade unions, academics, NGOs and public figures.

The letter was sent as the European Union (EU) reviews its Arctic strategy amid renewed energy security concerns following ongoing geopolitical tensions in the Middle East and Ukraine.

Among the financial institutions backing the letter were Nordea Asset Management, KLP, Velliv, AkademikerPension and P+.

The signatories argued that opening up further Arctic fossil fuel extraction would undermine the EU’s climate ambitions while exposing Europe to long-term energy security and infrastructure risks.

Sampension head of environmental, social, and governance (ESG), Jacob Ehlerth Jørgensen, acknowledged that recent conflicts had intensified pressure to strengthen European energy security.

However, he argued that “new oil and gas extraction in the Arctic is the wrong way to go”, warning that Arctic fossil fuel projects carry “significant risks, both financially, geopolitically, in terms of climate and in relation to biodiversity”.

Indeed, the open letter warned that new Arctic oil and gas developments would not provide a near-term solution to Europe’s energy challenges because of lengthy project lead times and infrastructure constraints.

According to the letter, project lead times on the Norwegian continental shelf average 13 years and are even longer in the Barents Sea because of harsh operating conditions and limited infrastructure.

The signatories also claimed that if the EU meets its 2040 climate targets, existing gas infrastructure in Norway, the UK and the EU would already be sufficient to meet demand.

The letter further warned that Arctic fossil fuel expansion could create additional geopolitical vulnerabilities because of the proximity of infrastructure to Russian territory and international waters.

It also highlighted environmental concerns, noting that the Arctic is warming four times faster than the global average and that oil spills in the Barents Sea could have “severe and irreversible environmental consequences”.

ActionAid Denmark Nordic Center for Sustainable Finance senior adviser, Katrine Ehnhuus, said the issue would have “far-reaching consequences for the Arctic, the climate and the EU’s future energy system”.

She added that while “Norwegian oil interests are pushing hard for an Arctic oil and gas boom”, the EU should instead focus on accelerating the transition to renewable energy.

Other signatories included former German vice chancellor and economy minister, Robert Habeck, former UN General Assembly president, Mogens Lykketoft, and Norwegian investor, Jens Ulltveit-Moe.

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