Introduction

Prime Minister Mark Carney’s government has repeatedly stated its intention to accelerate “nation-building” infrastructure and industrial projects. While the government aims to attract investment for such projects, the desire for speed cannot override the legal imperative to consult with Indigenous nations and ensure the free, prior and informed consent (FPIC) of impacted nations before projects are approved. Pension funds are identified as potential investors for these “major projects”, placing them in a powerful position to require that proponents demonstrate FPIC as a precondition for investment. Currently, most of Canada’s large pension managers do not have an investment policy outlining their commitment to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

Background: UNDRIP, FPIC and Canada

UNDRIP was adopted in 2007 to affirm the rights of Indigenous peoples regarding self-determination, lands, territories, and participation in decision-making. The Government of Canada introduced Bill C-15, the United Nations Declaration on the Rights of Indigenous Peoples Act, which became law on June 21, 2021. This provides a legislative framework for implementing UNDRIP standards. A core principle is FPIC, as cited in Article 32 regarding the development of Indigenous lands. Consent requires that Indigenous peoples have the power to say yes or no. “Free” consent involves the absence of coercion; “prior” consent allows for decisions before a project is undertaken; and “informed” consent ensures communities have the information needed to fully assess implications. The Truth and Reconciliation Commission’s Call to Action 92 urges businesses to adopt UNDRIP as a reconciliation framework for corporate policy and core operational activities.

Indigenous rights and the long-term obligations of pension funds

Respect for Indigenous rights is directly relevant to a pension fund’s ability to maximise returns and minimise risk. Failing to respect these rights exposes financial institutions to material risks, including regulatory delays, court challenges, political opposition, and reputational damage. As significant owners of infrastructure and natural resources, pension funds must recognise that fulfilling long-term obligations to beneficiaries depends on a safe climate. Urgent environmental problems cannot be addressed without Indigenous leadership, as forests, biodiversity, and carbon stores are better protected in areas stewarded by Indigenous communities. A policy aligned to FPIC is necessary to fulfil human rights obligations and manage climate-related risks through rigorous due diligence.

Economic reconciliation and extractive projects

Some pension funds have entered partnerships with First Nations on fossil fuel assets in the name of “economic reconciliation”. However, Indigenous authors argue that colonialism often leaves communities with little choice but to enter such agreements. Extractive fossil fuel projects can undermine the healthy lands and waters foundational to Indigenous culture, wellbeing, and sovereignty. The rise of “natural gas” as a climate solution is described by some as a strategy used by the fossil fuel industry to maintain control over energy systems and profit from Indigenous lands. By entrenching colonial systems that prioritise profit over the health of lands, economic reconciliation can destabilise Indigenous sovereignty.

Findings

Shift analysed 11 large Canadian pension managers to identify the extent to which their investment policies and proxy voting guidelines align with UNDRIP and FPIC. As of July 31, 2026, the findings show that no publicly disclosed investment policy is fully aligned with these standards across the evaluated managers. While some organisations have reconciliation action plans forthcoming or in development, there is wide variation in how Indigenous rights are embedded. For example, the Healthcare of Ontario Pension Plan (HOOPP) and Alberta Investment Management Corporation (AIMCo) make no mention of Indigenous rights in their investment policies. Conversely, the University Pension Plan (UPP) and OPSEU Pension Trust (OPTrust) have disclosed proxy voting guidelines that cite UNDRIP as a standard for public companies.

Recommendations

Pension funds must ensure that investments pass due diligence from both a rights-based and climate-centred perspective. Policies that uphold Indigenous sovereignty are a moral and legal imperative that leads to better long-term climate outcomes. Institutional investors should adopt reconciliation action plans and investment policies aligned with UNDRIP and FPIC to protect themselves from legal and financial risks. In the best interests of their beneficiaries, pension funds must refuse to back projects that do not demonstrate the free, prior and informed consent of all impacted Indigenous communities. International examples, such as the Swedish fund AP2 and Scottish Widows, demonstrate how to integrate FPIC into stewardship policies and supply chain transparency.

Appendix

The appendix provides a summary of each pension manager’s relation to Indigenous rights as of July 30, 2026. AIMCo is noted as a joint owner of the Coastal GasLink pipeline, which was forced through territory against Indigenous opposition. The British Columbia Investment Management Corporation (BCI) has participated in 13 First Nations Finance Authority (FNFA) bond deals representing over $350 million, yet it remains unclear if its business practices include FPIC in all investment decisions. The Canada Pension Plan Investment Board (CPPIB) has formed an interdepartmental committee to study UNDRIP but lacks an aligned policy. UPP provides an example of better-than-average disclosure, reporting that 90% of employees completed core reconciliation learning in 2025. Other funds, like the Ontario Teachers’ Pension Plan (OTPP), have released Indigenous Action Plans that focus on internal policies rather than investment strategy.