1. Promoting Sustainable Development in the Arctic
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Promoting Sustainable Development in the Arctic
A Private Sector Proposal for Partnership
September 2015
For Internal Use Only

2. The Arctic: Limitless Opportunity; Significant Responsibility
Shipping
Energy
Ocean Resources
Environmental Protection
By 2030, over 5% of total world trade could be routed along the Northern Sea Route.
While Arctic oil production could double by 2050 under some projections, the Arctic holds vast renewable potential: wind, hydro, tidal, geothermal, solar, and biomass are all promising areas
Fishery catches in the region could increase by up to 70% over the next 40 years, with even greater potential in aquaculture and the “blue economy”.
The Arctic is warming twice as fast the rest of the world, a warning for the rest of the world but an opportunity for climate science and other research.
Icebreakers are one of the key pieces of infrastructure in future development of the Arctic
A lack of public funds is holding back the pressing need for more icebreakers, and infrastructure needs more broadly
With such large infrastructure needs all across the Arctic, how are we going to do this?
Sources: Netherlands Bureau for Economic Policy Analysis, Statistics Norway, Reuters, NOAA
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3. A Private Sector Initiative…An Unusual Partnership
A large, diverse group of people and organizations are working together on a solution to Arctic development needs
Norwegian Labour Party
UCLA
Trade and Development Canada
University of Oxford
Sapinda
Tschudi Shipping
Norwegian Polar Institute
Pt Capital
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University of Alaska Fairbanks
The Polar Journal
COSCO
Statoil
Ministry of Foreign Affairs, Republic of Korea
Ministry of Justice, Japan
Barclays
Royal Dutch Shell
CSIS
Norwegian Shipowners’ Association
New Eurasia Foundation
Greenpeace
Protect Sápmi
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4. Promoting Sustainable Development in the Arctic Step 1: The Arctic Investment Protocol
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5. Step 1:The Arctic Investment Protocol
A Code-of-Conduct for responsible economic development in the Arctic
Helps ensure private sector organizations do the right things for the right reasons
Intended to be measurable as a series of goals against which we should be evaluated
Intended to hold us accountable to a pragmatic set of goals
Responsible Arctic development should adhere to six main objectives
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6. Objective 1: Build Resilient Societies through Economic Development
Create jobs, promote capacity building and encourage local ownership
Promote the United Nations’ Sustainable Development Goals through infrastructure investment
Infrastructure Quality and GDP per Capita by Country
Source: WEF, IMF
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7. Objective 2: Respect and Include Indigenous and Local Communities
Arctic people should be engaged in an inclusive dialogue on the practical benefits from economic growth; development should not be imposed from afar
Unemployment Rate in Arctic Regions
Arctic Region
National
Unemployment and living standards are worse in many Arctic regions than in the rest of the country
Source: Patchwork Barents, Knoema, BLS, Statistics Canada, Statistics Greenland, Bloomberg.
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8. Objective 3: Protect and Preserve the Complex, Diverse Environment of the Arctic
The Arctic environment is changing rapidly. As such, investment without environmental concern will not succeed.
March 2015 Surface Temperature Anomaly vs Average
Source: NASA
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9. Objective 4: Practice Responsible and Transparent Business Practices
Report and address impacts and implement an agreed grievance policy
Responsible development is an obligation. The Arctic Investment Protocol is built upon the following principles:
International Finance Corporation Performance Standards on Environmental and Social Sustainability – guidance on how to identify risks and impacts, designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way.
UN Principles for Responsible Investment – international network of investors committing to incorporate environmental, social, and corporate governance issues into investment analysis, decision making, and ownership.
World Bank Group Environmental, Health, and Safety Guidelines – technical reference documents with general and industry-specific examples of Good International Industry Practice. Contain the performance levels and measures normally acceptable to IFC that are generally considered to be achievable at reasonable costs by existing technology.
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10. Objective 5: Consult and Integrate Science and Traditional Ecological Knowledge
Modern science can help us understand the future of the Arctic region, while traditional knowledge provides us an understanding of the past and of man’s interaction with the Arctic environment
September Average Sea Ice Extent
With rapidly changing ice conditions, science and traditional knowledge must be relied upon to understand this new environment.
Source: National Snow and Ice Data Center.
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11. Objective 6: Global Cooperation and Best Practices
Only with a diverse group of stakeholders can we strengthen global cooperation and collaboration and obtain a commitment to best practices in the Arctic region
Governments
Universities and Research Organizations
Indigenous Groups
Private Industry
International Organizations
NGOs
This does not imply endorsement of the work of the Global Agenda Council. Instead, this represents those organizations who have been consulted in it’s development.
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12. Promoting Sustainable Development in the Arctic Step 2: The Arctic Infrastructure Inventory
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13. Step 2: The Arctic Infrastructure Inventory
An authoritative and exhaustive database of infrastructure needs in the Arctic
Highlighting the most pressing needs for the Arctic region, as well as gaps and overlaps in infrastructure plans
Identifying investment opportunities
Value of Potential Arctic Infrastructure Projects by Country
Total Arctic Infrastructure Needs Approach $1 Trillion
Source: Guggenheim Partners.
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14. Promoting Sustainable Development in the Arctic Step 3: The Arctic Permanent Investment Vehicle
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15. Step 3: The Arctic Permanent Investment Vehicle
Matching the demand from long term, patient capital with the urgent need for investment in the Arctic, particularly in infrastructure.
Investments by this new institution will be guided by the Arctic Investment Protocol
Potential models include regional development banks, infrastructure finance companies, and development funds
High degree of interest from pension funds, sovereign wealth funds and insurance companies with long term investment horizons and need for stable returns
Regional Development Bank Model
Source: IFC.
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