It is in the Arctic where soft law meets geopolitics, environmental change meets indigenous cultures, and business opportunities and potential access to natural reserves meet extremely vulnerable nature. The enormous opportunities and risks are further complicated by the fact that even if we fight to save the Arctic, the melting ice in the Arctic Sea may not save us. Uncertainty is at the heart of discussions about human activities in the Arctic.
In 2013, Gaia joined forces with the Federation of Finnish Technology Industries and leading Finnish suppliers of Arctic solutions in order to look into previous research and really understand the nature of Arctic risks and opportunities.
Firstly, the relentless climate and insufficient infrastructure mean harsh operating conditions. Changing temperatures set high requirements for technology. Materials and equipment must be exceptionally advanced, robust and of the highest quality. Furthermore, operations must be managed with extreme care and skill.
Another major risk arises from the vulnerability of the Arctic ecosystem, which stakeholders are only beginning to understand. We know that large Arctic mammals are threatened by climate change. What most people don’t know is that melting ice causes changes in the smallest bacterial communities in the Arctic waters, which in turn may have significant impacts on the entire ecosystem.
Thirdly, any commercial interests in the Arctic must be carefully considered against potential reputational risks. Trading partners, investors and financiers are paying ever more attention to reputation risks posed by operations in the Arctic.
How about opportunities then? Gaia values Arctic business opportunities at 240 billion euros, based on planned investments in the Arctic by 2020. Arctic activities are certainly growing in the long term but investment intensity is fluctuating according to changes in energy and mineral prices, the political climate and the different strategies of the Arctic countries.
Gaia also found that investments are not only expected from “traditional” industries, like exploration and marine transportation, but from a variety of sectors, including emergency preparedness and response, telecommunications, as well as climatic data services and other information services. The Arctic area is therefore relevant to many industries across many countries. It is a significant opportunity for those who can produce the most sustainable operations, technologies, products and services.
Many Finnish companies are well positioned to operate in vulnerable environments. They have a good track record in safe ice navigation as well as fleet design, manufacturing and operation. Finnish companies have state of the art technology and expertise in materials and their ability to function in extreme temperatures. They also know the occupational requirements for harsh environments, and have leading analysis on weather and ice conditions.
The fragile Arctic ecosystem and its constantly changing nature set the bar high and require special attention to stakeholder communications. Dialogue between corporations, environmental groups, indigenous communities and governments is crucial to building understanding and trust. Cooperation among businesses, authorities, researchers and states is needed to ensure sustainability and safety.
Without proper caution, Arctic activities – even those carried out in good faith – can cause severe operational and reputational damage, and a vulnerable environment may be fatally damaged.
Finland is preparing to take over the chairmanship of the Arctic Council and the Arctic Economic Council in 2017. This is an excellent chance to raise topics that anchor sustainable development firmly on the Arctic agenda.
Gaia has been involved in several projects that promote sustainable development in the Arctic area. We provide innovative solutions for sustainability – whatever we can do to prevent triggering the Arctic tipping point.
Chairman of Gaia Group
Environment, Corporate Responsibility, Climate, Disaster Management
+358 400 464 127