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Roadmap for reconciliation for the Canadian Responsible Investment industry

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  • Nov 1, 2021
Roadmap for reconciliation for the Canadian Responsible Investment industry

LONDON, Ontario, November 1, 2021 - Indigenous Peoples and their economic, social and environmental well-being are relatively absent from the conversations in the Canadian Responsible Investment (RI) industry. Despite recent initiatives, few Canadian RI policies or reports of institutional investors make references to Indigenous Peoples. These are key findings from a research team at the Ivey Business School at Western University, having studied the practices of the investment industry for one-year through interviews with stakeholders, observation of industry conferences, and documentary evidence.

Their report “Indigenous Peoples and Responsible Investment in Canada” sheds light on the significant differences in the level of awareness of, and action on, Indigenous rights and reconciliation among the Canadian investment management firms.

For a Q&A on key issues raised by the report with Mark Sevestre and Katherine Wheatley from the Reconciliation and Responsible Investment Initiative, please see this companion article.

 

“Economic actors must address social inequalities and systemic racism to contribute to inclusive growth that creates opportunities for all,” said research team leader, Dr. Diane-Laure Arjaliès, Associate Professor at the Ivey Business School, Western University. “Including Indigenous Peoples in the allocation, distribution, and valuation of capital is an essential step towards this endeavour. In addition, inclusive companies that manage ESG risks and improve outcomes for Indigenous Peoples are also better investments.”

To contribute to progress on the path of reconciliation, the investment industry should include Indigenous perspectives across the investment chain. To achieve this, the report authors Arjaliès, Julie Bernard and Bhanu Putumbaka investigated how the Canadian RI industry specifically embraces six sub-themes deemed key to the process of economic reconciliation:

  • Recognition of Indigenous rights;
  • Diversity and inclusion (of Indigenous Peoples);
  • Building a thriving Indigenous economy through partnership;
  • Fiduciary duty and Indigenous Peoples;
  • Building an inclusive and just transition to a low-carbon economy through partnership; and
  • Indigenous environmental stewardship.

The research team systematically analyzed the inclusion of these themes in each step of the investment chain making recommendations applying to asset owners, asset managers to investee companies, and service providers.

“Reconciliation requires a reorganization of our political, economic, and social systems,” said Mark Sevestre, Lead, Reconciliation and Responsible Investment Initiative (RRII) in partnership with SHARE Canada.The sustainability of the economy is assured when it is just, inclusive, and productive. This necessitates that all members of the populace are afforded equitable economic opportunities. The RI industry necessarily must afford attention and focus to reconciliation, in light of the divergent outcomes between Indigenous and non-Indigenous peoples in Canada.”

The research team systematically analyzed the inclusion of these themes in each step of the investment chain making recommendations applying to asset owners, asset managers to investee companies, and service providers. 

The report co-sponsored by Ivey’s Centre for Building Sustainable Value and the Ian O. Ihnatowycz Institute for Leadership aims to create dialogue and pathways to engage the Canadian responsible investment industry in the process of truth and reconciliation. This report is also an example of the current Canadian business schools’ efforts to respond to Call to Action 92, which offers a roadmap for the business community to think about and practice reconciliation.