Investing in Deep Sea Mining is a Financial Mistake
London 7 March 2024 – Betting on resource extraction over nature preservation is a financial mistake, according to Planet Tracker’s latest report, “How to Lose Half a Trillion“, which finds that sectors dependent on preserving intact ecosystems have outperformed those engaged in exploitation by threefold in terms of financial returns over the last three decades.
Correcting this mistake is crucial now, as ambitions crystallise to mine the deep sea. The analysis finds that chasing this ecological disaster could cause over USD 500 billion in value destruction, of which USD 30-132 billion in the mining sector itself.
“Before factoring in any environmental impacts, the economics already appear uncompelling”, says report lead author François Mosnier, Head of Oceans at Planet Tracker. “High operating expenditures mean that returns will be negative for investors in deep sea mining, which will also destroy value in other sectors, such as terrestrial mining and fishing”.
Moreover, the negative impact on the deep sea’s ecosystem services could lead to natural capital destruction of at least USD 465 billion, predominantly through habitat destruction.
However, there is a silver lining. Financial market participants have the power to prevent this potential loss of at least half a trillion dollars by endorsing a moratorium on deep sea mining.
“It is not often that financial markets can claim a major success in nature conservation while avoiding significant destruction to corporate value and natural capital. Preventing deep sea mining would be such an opportunity”, stated Mosnier.
The findings of this report underscore the need for a paradigm shift in the way financial markets perceive nature. By recognizing the inherent value in preserving ecosystems, investors have the potential to safeguard both the environment and their financial interests.
How to Lose Half a Trillion can be downloaded here.
ENDS
For more information please contact:
Josh Hoppen, ESG Communications | t: +34 612 28 72 64 | josh@esgcommunications.com
ABOUT THE DEEP SIX PROJECT
This report is the third in a series of six (the ‘Deep Six Project’), focused on deep sea mining. Use the links to view the first two reports ‘The Sky High cost of Deep Sea Mining’, and ‘The Climate Myth of Deep Sea Mining’. The goals of the Deep Six project are to 1) assess the potential environmental impact of deep-sea mining, including in relation to equivalent land-based mining and 2) for investors to apply six different learnings from the risks and opportunities of deep sea mining to other industries that impact marine ecosystems, focusing on: climate change vs. nature considerations, resource-based valuations vs. natural capital value, restoration potential, circularity, sovereign risk and stranded assets risk.
ABOUT PLANET TRACKER
Planet Tracker is an award-winning non-profit think tank focused on sustainable finance with the purpose of ensuring that capital markets’ investment and lending decisions are aligned with planetary boundaries and support a just transition. Its mission is to create transformation of global financial activities by 2030 to bring about real world change in our means of production so that they align with a resilient, just, net-zero and nature-positive economy. Planet Tracker serves both as a watchdog on corporate behaviour, including issues such as greenwashing, and as an ally to support finance and business to know how to undertake transition. By identifying the companies causing the worst environmental and social damage within targeted supply chains, Planet Tracker then identifies the investors and lenders in these companies whose financing is enabling these practices to continue unchallenged.
