Investors are increasingly aware that protecting Indigenous Peoples’ rights and solving the climate and nature crises go hand-in-hand.
Indigenous Peoples and Local Communities (IPLCs) have long struggled to make their voices heard when it comes to protecting their lands and their rights. There may be an international day (9 August) in recognition of Indigenous Peoples around the world, but IPLCs remain at the fringes of international multi-stakeholder discussions, including those attempting to address the climate and nature crises.
This continues despite the fact IPLCs are among the first to feel the direct consequences of climate change, biodiversity loss and nature degradation, due to their close relationship and dependence on the natural world. These negative impacts are exacerbated by political and economic marginalisation, human rights violations, discrimination, and loss of land and resources to global companies which are themselves major contributors to climate and environmental damage.
This is not only a matter of injustice; it is also a missed opportunity.
“Indigenous Peoples play a key role in protecting the world’s biodiversity and, in turn, combatting climate change,” Kamil Zabielski, Head of Sustainable Investments at Storebrand Asset Management, tells ESG Investor.
Although they make up just 5% of the global population, Indigenous Peoples safeguard around 80% of the world’s remaining biodiversity, as they reside in some of the most biodiversity-dense biomes in the world, such as the Amazon rainforest. A report published by the London School of Economics Grantham Research Institute on Climate Change and the Environment (GRI LSE) noted 91% of the land managed by IPLCs is in ‘good’ or ‘fair’ ecological condition.
“It is increasingly being acknowledged [by investors] that the recognition and protection of Indigenous Peoples’ rights is one of the most effective ways of protecting nature,” says Zabielski.
Experts also agree that investors and companies have much to learn from IPLCs on sustainable practices that can be adopted across a variety of sectors, including food and agriculture.
The global food system accounts for around a third of global greenhouse gas (GHG) emissions, 60% of biodiversity loss, and 70% of freshwater use.
“Sustainability in the context of the agriculture and food production industry goes beyond just environmental considerations and must also encompass social and economic dimensions, such as Indigenous Peoples’ rights,” says Georgina Thomas, ESG Associate at Cibus Capital, which channels investment into solutions and innovations in sustainable food and agriculture.
But the leaders of Indigenous Peoples who gathered at the 22nd United Nations Permanent Forum on Indigenous Issues in April remained pessimistic regarding their consideration in achieving a just transition to a net zero and nature positive future, warning that the West’s climate transition strategies risk further exploitation of Indigenous territories, resources and people.
Also in attendance, UN Secretary-General António Guterres urged those gathered to learn from the Indigenous Peoples who “hold many of the solutions to the climate crisis and are guardians of the world’s biodiversity”.
Attitudes are platitudes
The agrifood sector poses several risks to IPLCs, including threatening cultural survival, food security, housing, health, spirituality, and social wellbeing.
Further, free, prior and informed consent (FPIC) is often not obtained by agrifood companies from IPLCs before undertaking new projects in and around Indigenous lands.
Research by Global Canopy highlighted that financial institutions are not doing enough to address this latter issue. Its Forest 500 briefing on human rights noted that just 27% of the 150 financial institutions with the greatest influence on tropical deforestation have a policy encouraging or requiring holdings to secure the FPIC of Indigenous Peoples prior to land acquisition or development.
“There is growing awareness of the links to illegal land conversion and violence towards environmental rights defenders [and Indigenous Peoples] amongst investors, with many companies failing in their responsibilities to uphold their rights,” says Dr Rebecca Drury, Manager of Biodiversity and Nature at sustainability advisory firm Chronos Sustainability.
Agrifood companies have also been publicly connected to controversies such as extracting water from Indigenous lands, the killing of Indigenous Peoples, and the purchasing of produce grown and harvested on lands where IPLCs were unjustly evicted.
Lauren Muusse, Investor Lead at the World Benchmarking Alliance (WBA), says that transparency and disclosures from the agrifood sector on Indigenous Peoples are limited, meaning that investors still have a restricted view of the negative impacts agrifood companies are having on IPLCs.
“Companies find it complex to link deforestation risks to Indigenous Peoples,” she says, adding that loss of land or land rights is a wider potential impact, yet action in the agrifood sector remains low.
WBA’s most recent Food and Agriculture Benchmark noted that just 37% of assessed global companies disclosed a commitment to recognise and respect legitimate tenure rights related to the ownership and use of land, with less than 15% requiring suppliers to also adhere to this standard.
“When conducting due diligence, investors should go beyond corporate policies and disclosures and triangulate such information with other sources to identify and avoid the associated risks,” Zabielski from Storebrand AM says.
Investors speaking to ESG Investor agreed that an agrifood company’s transition plan cannot be considered sustainable if it does not account for Indigenous rights.
“Given the significant dependencies by food companies on agri-commodities and raw materials from emerging regions, such as cocoa, coffee, soy and palm oil, responsible practices and relations with local communities is critical to ensure successful sourcing for the longer term,” says Lisa Beauvilain, Global Head of Sustainability and Stewardship at Impax Asset Management (AM).
She says that Impax AM assesses agrifood companies on themes such as supplier auditing systems to verify suppliers’ compliance with codes of conduct and labour standards, as well as evidence of corrective actions if issues arise.
Lessons to be learned
Elisa Scalise, Director of Land and Resource Rights at the World Resources Institute’s (WRI) Equity and Governance Center, says there is “strong evidence” that IPLCs are “likely to be the best stewards of [resource-intensive] lands”.
“Their traditions for managing use are aligned with goals to halt deforestation and biodiversity loss, and to build resilience in the face of a changing climate,” she says.
WRI research noted that forests managed by Indigenous Peoples in the Amazon served as strong net carbon sinks between 2001-21, collectively removing 340 million tonnes of CO2 each year. Further, average annual deforestation rates between 2000-12 in the Amazon were two to three times lower inside Indigenous lands compared to areas surrounding, WRI said.
This success rate is because IPLCs have a different mindset when it comes to humankind’s relationship with the natural world, which underpins how they have designed their food systems and livelihoods, according to Emil Sirén, Sustainable Finance Consultant at consultancy firm Ethos.
Sirén is a Swedish-Ecuadorian and a member of the Kichwa people in Ecuador.
“Many Indigenous Peoples don’t necessarily see the distinction between humans and nature, but rather feel that humans and nature are equal,” he explains.
“They live in nature, but they are also a part of nature, meaning that they want and need to protect it against external threats.”
Almost two-thirds of Indigenous-owned land is considered “essentially natural”, an internationally recognised legal term which describes how IPLCs live in harmony with nature and their essential role in its conservation. This is further recognised in the Global Biodiversity Framework’s (GBF) overarching ‘30×30’ target, which calls for the protection of 30% of the world’s land and sea biodiversity while acknowledging the important role of IPLCs as stewards of the natural world.
A 2021 report by the UN’s Food and Agriculture Organization (FAO) mapped insights from and threats to Indigenous Peoples’ food systems across the Amazon, Sahel, Himalayas, Pacific Islands and Arctic. It noted IPLCs’ “unique capacity” to conserve biodiversity and foster resilient food security, adding that they are among the most sustainable in the world in terms of efficiency, lack of waste, seasonality and reciprocity.
IPLCs can generate hundreds of food items from the environment without depleting natural resources, usually through nomadism and tying food generation and production activities to natural cycles, the report said. The Melanesians in the Solomon Islands utilise agroforestry, wild food gathering and fishing to generate 70% of their dietary needs, for example.
The Intergovernmental Panel on Climate Change’s (IPCC) sixth report said that empowering Indigenous communities “not only strengthens climate leadership in many countries, but also changes broad social norms by raising knowledge of Indigenous governance systems which supported sustainable lifeways over thousands of years”.
This is echoed in a 2022 report published by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), which called for a closer future relationship between scientists and IPLCs and outlined potential policy solutions to strike a better balance.
There are initiatives in motion that aim to incorporate Indigenous solutions into agrifood-related action.
For example, the Xingu Seed Network in Brazil allows farmers to regenerate degraded areas using native seeds collected by Indigenous communities.
“Ignoring Indigenous Peoples or treating their [knowledge] as ‘folk wisdom’ robs us [companies and investors] of the ability to make the best use of human ingenuity in addressing environmental challenges,” says Beauvilain from Impax AM.
Sustainable relationships
However, current multi-stakeholder efforts to engage with Indigenous Peoples risk becoming tokenistic, extractive and harmful, Sirén warns.
“A lot of times, Indigenous Peoples are invited to comment on a plan or commitment that is already drafted. These organisations can then claim they have consulted with Indigenous Peoples, but they haven’t really had a say in the decisions made.”
It’s vital that investors and companies develop more inclusive engagement toolkits, guidance and roadmaps, he adds.
“Engaging with local communities is not everyday practice in mainstream finance,” acknowledges WBA’s Muusse.
“Through the WBA 350+ multi-stakeholder alliance, we hope to foster unlikely connections between financial actors and groups that represent or are linked to local communities.”
Zabielski adds that most standards and guidance on social or environmental matters used by investors “rarely address Indigenous rights in sufficient depth”.
Tomasz Sawicki, Associate Director of Forests and Land Use at CDP, says the environmental disclosure platform also aims to incentivise organisations to better protect the rights and livelihoods of IPLCs by encouraging the incorporation of collective landscape partnerships, known as Landscape and Jurisdictional approaches (LA/JA).
He says these are “innovative multi-stakeholder solutions” that can help agrifood companies and investors meet their net zero, biodiversity, and no-deforestation commitments through means such as data and knowledge-sharing.
NGO Amazon Watch has also developed the ‘Respecting Indigenous Rights: An Actionable Toolkit for Institutional Investors’, which aims to provide investors with the tools to learn about and incorporate Indigenous rights into their due diligence and stewardship activities. It includes contributions and input from Indigenous human rights specialists and builds on international human rights and environmental law standards.
It’s hoped that the establishment of Nature Action 100 (NA100) will help to facilitate more widespread and robust engagements with Indigenous Peoples – and therefore increased understanding of their more sustainable relationship with the natural world.
“While there has been significant progress in monitoring and recording nature-related impacts, investors remain at risk of having blind spots over this information in relation to relevant companies in which they are invested – this is one of the reasons Indigenous Peoples were specifically highlighted in the NA100 investor expectations for companies,” says Norah Berk, Senior Programme Manager on Nature at the Institutional Investors Group on Climate Change (IIGCC), and the network’s day-to-day lead on NA100.
The NA100’s investor expectations state that companies must prioritise rights-based approaches that are developed in collaboration with IPLCs when they are affected.
“However, to meaningfully participate in developing such plans, many communities may require support to strengthen their understanding of the issues, challenges, and opportunities that will be discussed,” says Berk.
She says companies can partner with local organisations that work closely with IPLCs to develop the guidance, while addressing gaps in communication and facilitating robust and mutually beneficial discussion.
“Testimonies from communities located in areas where agrifood companies source their raw materials are crucial to bring to life the impact of operations on the ground,” Berk says, adding that the very same communities also “hold the knowledge of practices that companies can scale to underpin sustainable livelihoods and resilient ecosystems”.
Such organisations include the Rights and Resources Initiative and FERN.
Integrating Indigenous knowledge
Investors and companies can only do so much – policymakers must lead the way and weave Indigenous Peoples’ rights and knowledge into climate, nature and biodiversity-related policies.
However, beyond some issue-specific legislation requiring due diligence and/or disclosure on human rights, such as Section 1502 in the US Dodd-Frank Act on conflict materials or the UK Modern Slavery Act, most of these requirements are voluntary, which Drury from Chronos Sustainability says is “a barrier to progress”.
Further, as noted by the World Economic Forum (WEF), both the UN Sustainable Development Goals 2030 Agenda and the Paris Agreement mention Indigenous Peoples throughout, but with no formal commitment that can serve as an anchor for global development action in Indigenous knowledge, rights and representation.
“There is a need to better integrate all human rights into initiatives [and policies] seeking to deliver net zero and nature positive, ensuring that linkages and potential trade-offs are fully understood, and contributing to a just transition,” says Drury.
It is hoped that this is set to change. In September, the UN Special Rapporteur on the Rights of Indigenous Peoples will be presenting a thematic report to the Human Rights Council, outlining the role of Indigenous Peoples’ rights and the potential impacts of international climate finance mechanisms, as well as carbon and biodiversity credit markets, international conservation organisations, investors, international financial institutions, and UN agencies financing green energy, sustainable development projects.
If climate, biodiversity and nature targets are to be met across the agrifood sector and other carbon-intensive and environmentally damaging industries, companies, investors and policymakers can no longer see themselves as “the main players” in Indigenous territories, says Sirén.
“They are guests in these territories,” he tells ESG Investor.
“To understand the perspective of Indigenous Peoples, they cannot be treated as data points. They [investors, companies and policymakers] need to meet with Indigenous Peoples in their lands to fully understand their connection to the natural world, their desire to protect it, and how their knowledge can lead to solutions.”
