ESG often disregards Indigenous needs, particularly when it comes to the energy sector
A report released today by the Frontier Centre for Public Policy, titled ESG and the New Eco-Colonialism – Choosing Indigenous Equity Ownership over Stakeholder Capitalism, raises concerns about the lack of Indigenous input in the implementation of ESG (Environment, Social, and Governance) investing standards, according to the report author Joseph Quesnel.
Joseph Quesnel
“ESG (Environmental, social, and governance) investing standards have gained significant traction globally, with major institutional investors and pension funds prioritizing adherence to these criteria,” Quesnel said. However, he highlights a troubling trend: Indigenous communities’ perspectives are being overlooked when developing and applying these standards.
One critical issue identified in the report is the absence of Indigenous consultation in establishing ESG standards and metrics. “Despite Indigenous communities showing interest in ESG investing, these standards have been implemented without their input or approval,” Quesnel said.
Furthermore, ESG’s stance on the energy sector, particularly its hostility towards fossil fuels due to climate change concerns, often clashes with the interests of Indigenous communities seeking to develop energy resources on their lands, according to Quesnel. This conflict has led to challenges for Indigenous groups, including divestment campaigns and a lack of investment in essential infrastructure.
In response to these challenges, the report suggests that Indigenous communities should prioritize direct engagement with resource companies to ensure their input is respected and full equity ownership is attained. “Rather than attempting to fix the flaws within ESG standards, the focus should be on empowering Indigenous communities in resource development projects,” Quesnel said.
The report’s findings have sparked discussions within Indigenous communities about the best approach to navigate ESG investing and ensure their interests are represented. Many Indigenous organizations are calling for greater inclusion and consultation in developing ESG standards to address these issues effectively.
As ESG investing continues to gain prominence, it is imperative that Indigenous voices, Quesnel said, are heard and their perspectives are taken into account to ensure equitable participation in the global economy.
To interview Joseph Quesnel, click here.
| Staff
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