Why are the rights of Indigenous peoples relevant for investors?
In many regions across the world, Indigenous peoples are increasingly experiencing human rights violations, particularly in relation to the extractive, renewable energy, and agribusiness sectors. Institutional investors, as shareholders and providers of capital, play a critical role in driving, enabling, or preventing human rights impacts. The responsibility of investors to conduct due diligence to identify and address actual or potential human and Indigenous rights violations has been established by international standards such as the UN Guiding Principles on Business and Human Rights and the Organization for Economic and Cooperation and Development (OECD) Guidelines for Multinational Enterprises.
In addition to the human rights responsibility and growing expectations on investors to conduct due diligence, there is a strong business imperative for investors to develop policies and processes to identify and address actual or potential human rights impacts on Indigenous peoples to avoid associated risks.
- Investment risk: Failing to consider Indigenous rights in due diligence ignores material risks, which has already had financial implications for many businesses and investors, in addition to reputational impacts.
- Systemic risk: Indigenous peoples play a key role in protecting the world’s biodiversity, and in turn, in combating climate change. It is increasingly recognized that loss of nature and degradation of ecosystems poses a serious systemic risk for the global economy. It is also increasingly acknowledged that the recognition and protection of Indigenous peoples’ rights is one of the most effective ways of protecting nature.
This Toolkit
The rights of Indigenous peoples are protected by a robust and growing body of international human rights instruments and jurisprudence. These rights, often not properly understood in the investment community include but are not limited to the right to self-determination; the right to own, control, and use their lands, territories, and resources; and in turn, and the right to give or withhold Free, Prior, and Informed Consent (FPIC) to matters affecting their lives, rights, and territories. This Toolkit intends to fill this gap by providing practical guidance and tools for institutional investors to learn about and meet their responsibility to respect Indigenous peoples’ rights, and in turn, avoid financial, and reputational risks. The Toolkit consists of two parts, both of which include case studies.
- Part A: Fundamentals provides an overview on the rights of Indigenous peoples, as recognized by international human rights instruments and jurisprudence, and on the business responsibility to respect Indigenous rights laid out in international standards.
- Part B: Due Diligence Implementation provides guidance for institutional investors on incorporating Indigenous rights into policies and management systems, as well as practical tools for identifying and addressing actual or potential Indigenous rights impacts, including data sources, due diligence questions, and red flags in company practices and policies.