Executive Summary

The report outlines the relevance of Indigenous rights for investors, especially in the extractive, renewable energy, and agribusiness sectors. It highlights the responsibility of institutional investors to conduct due diligence to identify and address potential or actual human and Indigenous rights violations as established by international standards. The business imperative for respecting Indigenous rights includes avoiding financial, reputational, and systemic risks.

Part A: Fundamentals

Introduction

The report emphasises the significant implementation gap in respecting Indigenous rights despite robust international human rights protections. Investors are urged to use their leverage to prevent, mitigate, and enable remedy for human rights impacts on Indigenous peoples, which is crucial for both human rights and environmental sustainability.

The investor imperative to address Indigenous rights
Institutional investors must respect human rights according to UN and OECD guidelines. Failing to respect Indigenous rights can lead to material risks such as operational delays, increased costs, reputational damage, and legal challenges. Indigenous peoples’ role in protecting biodiversity underscores the systemic risk to the global economy from nature loss.

Part B: Due diligence implementation

Policy and governance

Investors should incorporate Indigenous rights into their policies and management systems. This includes recognising Indigenous land rights, ensuring Free, Prior, and Informed Consent (FPIC), and addressing adverse impacts comprehensively.

Identify and assess actual or potential impacts

Practical tools for identifying and assessing impacts include data sources, due diligence questions, and red flags in company practices and policies. Investors should ensure meaningful consultation processes with Indigenous peoples.

Address actual or potential impacts

Investors should provide or cooperate in remediation where they have caused or contributed to adverse impacts. Effective grievance mechanisms, informed by Indigenous peoples’ justice systems, are crucial for early and direct remediation.

Recommendations

• Develop robust policies: Investors should establish policies that respect Indigenous rights, including FPIC and land rights.
• Conduct thorough due diligence: Regular assessments and consultations with Indigenous communities are essential.
• Implement effective grievance mechanisms: Ensure mechanisms are accessible and culturally appropriate.
• Prioritise Indigenous rights: Given the historical context of dispossession, impacts on Indigenous peoples should be prioritised.
• Collaborate with Indigenous institutions: Respect and engage with Indigenous decision-making systems and laws.

Quantitative and qualitative evidence

The report cites cases where failure to respect Indigenous rights led to financial losses and project cancellations. For example, GeoPark lost US$70.8 million in Peru due to community opposition. Additionally, protecting Indigenous territories is linked to better conservation outcomes, highlighting the intersection of human rights and environmental sustainability.

Conclusion

Institutional investors play a critical role in upholding Indigenous rights. By integrating these rights into their due diligence processes, investors can mitigate risks and contribute positively to human rights and environmental sustainability.