US firm to launch ‘unethical’ Arctic investment fund

Alex Blackburne looks into a new fund, set up by one of the world’s most famous asset management firms, that is devoted to investment in the Arctic.

Guggenheim Partners, which manages over $100 billion worth of investments, is to set up a new Arctic investment fund, it was announced last week.

The scheme was unveiled at the Juneau World Affairs Council’s annual Fall Forum, which this year ran under the moniker The Politics of Global Climate Change.

Alice Rogoff, published in online magazine Alaska Dispatch, announced that Guggenheim Partners was planning a new fund, apparently “worth billions“.

The fund looks set to invest first in a $1 billion heavy-duty ice breaker, used to tackle oil spills, perform search and rescue missions and establish new shipping paths in the Arctic, but the possibility of deepwater ports to cut oil companies’ costs has also been mentioned.  

Despite only hitting the global airwaves a few days ago, the proposals have already been met with scepticism from environmental lobbyists, who fear that it will just speed up the already quickening effects of climate change on the region.

Mark Robertson, head of communications at EIRIS and editor of YourEthicalMoney.org, said there were at least two opposing sides to Guggenheim Partners’ proposed fund, and that it wasn’t completely negative.

“[Some people] may object to investing in any fund which focuses investment in fossil fuels supply instead of renewable energy”, he stated.

“That said, others might take a slightly different approach: if fossil fuel extraction in the Arctic is to take place then there is the potential for ethical investors to engage [with] the businesses involved to mitigate environmental impacts as much as possible.”

The Guggenheim Partners’ fund seems designed to exploit the fragile and changing arctic environment.  The smart solution from an investor’s point of view would be to boycott it completely and instead invest in one that is doing something positive about climate change.

The financial rewards from the Arctic fund may well be significant, but at what cost to the ecosystem and future generations? There are plenty of ethical, sustainable and socially responsible investments out there that are equally as profitable for the consumer, without exploiting the environment.

YourEthicalMoney.org is a great place to start if you’re looking at doing the right thing by choosing to put your money in ‘good’ funds.

Alternatively, ask your financial adviser, if you have one, or fill in our online form and we’ll connect you to a specialist ethical adviser.