Indigenous Peoples are increasingly on the frontline of the climate crisis, and in recent years we have seen major flashpoints erupt between extractives companies and local communities. For example, Rio Tinto’s destruction of Aboriginal heritage sites at Juukan Gorge damaged the company’s social licence to operate while North American oil and gas pipelines have faced community opposition, resulting in construction delays.
When companies do not obtain free, prior and informed consent from Indigenous Peoples impacted by their business operations, they increase their likelihood of causing adverse human rights impacts. These impacts can lead to operational, reputational, and regulatory risks for companies and their shareholders. It is estimated that for a typical, large mining project with US$3bn-$5bn capex, delays caused by community opposition can cost roughly $20m-$30m per week. And in September 2018, estimated costs incurred by the Dakota Access Pipeline, which faced resistance from Indigenous Peoples along its route, amounted to at least $7.5bn.
Given the importance of protecting Indigenous Peoples’ rights for long-term shareholder value and better environmental and social outcomes, EOS prioritises engagement with companies on how they can most appropriately respect these rights and retain their social licence to operate.
EOS has over 30 active engagements related to Indigenous Peoples’ rights and is an active member of the steering committee of the Investors and Indigenous Peoples Working Group (IIPWG). This group holds monthly calls to bring together Indigenous and non-Indigenous communities on issues related to sustainable and responsible investing.
Read the full article in our Q3 2023 Public Engagement Report.