- Diane-Laure Arjaliès & Matthew Lynch
- Nov 1, 2021
The investment industry is under increasing pressure to respond meaningfully to major societal issues like diversity and reconciliation with Indigenous Peoples. In 2018, SHARE (Shareholder Association for Research and Education) and NATOA (National Aboriginal Trust Officers Association) joined forces to create the Reconciliation and Responsible Investment Initiative (RRII), which has been spearheading efforts to integrate reconciliation and responsible investment. Despite this important initiative, few Canadian institutional investors yet make direct reference to Indigenous Peoples in their responsible investment policies or reports.
To better understand the industry’s practices, Dr. Diane-Laure Arjaliès, Julie Bernard and Bhanu Putumbaka, a research team at the Ivey Business School, has studied the practices of the industry for one year through interviews with stakeholders, observation of industry conferences, and documentary evidence. Their results are available in a new report Indigenous Peoples and Responsible Investment in Canada that 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.
In the following Q&A, Mark Sevestre and Katherine Wheatley from the RRII reflect on why this topic mattered for both Indigenous peoples and investors, and what role business schools could play in this process of economic reconciliation.
Mark Sevestre is Haudenosaunee Mohawk and resides in the Six Nations of the Grand River First Nation Territory in Ontario. Mark is currently leading the Reconciliation and Responsible Investment Initiative (RRII) in partnership with SHARE Canada which is linking Indigenous Values to Indigenous Investing as well as helping Non-Indigenous Investors utilize their portfolios to achieve the goals of Reconciliation in Canada. Since 1999, Mark has served as the General Manager of the Mississaugas of the Credit First Nation Community Trust, and in 2006, was one of three founding members of the National Aboriginal Trust Officers Association (NATOA).
Katherine Wheatley is the Program Manager for the RRII program. Prior to joining SHARE in 2019, Katherine worked in intergovernmental affairs with various First Nations to protect their Aboriginal rights and title and enhance environmental conservation through government relations, negotiation with industry, and international advocacy. She has previously worked to advance social development and reconciliation through conducting research and furthering grassroots community initiatives at several non-profit organizations, a private family foundation, and a municipal government in Eastern Canada.
QUESTION: Why should the Responsible Investment (RI) industry focus on the topic of reconciliation with Indigenous Peoples?
Katherine Wheatley (KW): In the Canadian context, reconciliation is a central societal issue of our time. For centuries after European arrival and colonization in North America, Indigenous peoples in Canada have faced dispossession, assimilation, and cultural genocide. It is critical that all Canadians support redress and advance the process of reconciliation – including within capital markets and the economy. There is also a lack of recognition of the degree to which Indigenous rights and interests overlap with the investment context. But respect for Indigenous rights is material to investment success.
Mark Sevestre (MS): The corporate community and non-Indigenous peoples have a responsibility to make things right with Indigenous peoples, in recognition of the harm caused and the benefit derived for Canadians at the expense of Indigenous peoples. It is important to take away systemic barriers and create opportunities to ensure everyone can participate in our economic system. It’s the responsibility of non-Indigenous investors to incorporate reconciliation into their investment portfolios.
Reconciliation requires a reorganization of our political, economic, and social systems. 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.
KW: As the truth-telling process of the Truth and Reconciliation Commission of Canada (TRC) concluded in 2015, its Commissioners called upon all individuals, communities, and institutions in Canada to take up the Calls to Action published by the TRC. In particular, TRC Call to Action 92, directed at corporate Canada, provides a roadmap for the advancement of reconciliation in capital markets, and should be taken up by RI industry actors across Canada.
QUESTION: For those institutional investors looking to start their journey of integrating reconciliation goals, what would you recommend as a first step?
KW: In 2019, we published Advancing Reconciliation: A Guide for Investors, a practical, action-oriented guide that maps out five steps through which investors can support reconciliation and Indigenous rights across their investment policies and practices. The steps mapped out are not sequential – there are many ways investors can start contributing to reconciliation. Some steps, like advancing awareness of Indigenous rights, culture, and history, are ongoing processes. Education is a powerful precursor to action, so this might be the right place for some investors. Others may wish to start by incorporating Indigenous rights into their proxy voting guidelines, to ensure that when votes on respecting Indigenous rights arise on investee company ballots, they’re standing in support of reconciliation. Many asset managers use proxy voting guidelines that don’t yet explicitly incorporate Indigenous rights, so it is important for asset owners to raise the matter and ensure the guidelines that are used to execute their voting rights do uphold Indigenous rights.
QUESTION: What are some of the initiatives led by the Shareholder Association for Research and Education (SHARE), National Aboriginal Trust Officers Association (NATOA), and the Reconciliation and Responsible Investment Initiative (RRII) to promote responsible investment policies and practices that include Indigenous perspectives and reconciliation goals?
MS: Together through RRII, SHARE and NATOA collaborate with Indigenous and non-Indigenous investors to advance reconciliation and Indigenous rights. We pursue this aim through a variety of means, including the following initiatives:
- Values in Action program: A platform for Indigenous trustees and investors to obtain a first experience in shareholder engagement, enabling them to leverage their power as asset owners alongside our technical team.
- Corporate shareholder engagement: Leveraging SHARE’s network of investors, representing over $90 billion in assets under management, we engage with Canadian and international companies to foster greater respect for Indigenous rights, improved disclosures on corporate actions and policies that align with Call to Action #92, and more.
- Direct support to investment decision-makers: We support Indigenous investors in embedding community values and aspirations in their investment oversight. We support other asset owners, such as foundation investment committee members and pension trustees, in incorporating Indigenous rights and reconciliation principles into their investment policies and practices.
- Development of educational resources and tools and events: We regularly release relevant research of relevance to reconciliation and investment, provide open-access tools and supports to mobilize further progress among investors, and hold educational events to share knowledge and build collective energy among asset owners and the investment community more broadly.
QUESTION: More and more shareholder proposals on Indigenous rights and issues are being submitted and voted (with higher support). What are your recommendations to keep this momentum going and to even push it further?
KW: It’s important that investors and asset managers pursue dialogues with companies on Indigenous rights, particularly where due diligence on Indigenous rights – such as meaningful consultation and the seeking and obtaining of Free, Prior, and Informed Consent (FPIC) – is highly material to company outcomes and success, such as in financial services, materials, and mining sectors. More disclosure is needed from companies on how they are upholding Indigenous rights – failure to respect the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) can compromise the viability of proposed projects and companies at large. If investors or their managers are concerned after having these conversations with portfolio companies, they can consider filing proposals to raise the issue and seek greater disclosure from these companies.
This question also takes us back to the need for proxy voting guidelines that expressly incorporate Indigenous rights and matters. Investors should talk to their managers to ensure Indigenous rights are being upheld through investment stewardship. We also recommend that investors ask their managers about how previous votes have been cast when proposals on Indigenous rights are tabled at company AGMs – did they hold shares in TC Energy (then TransCanada) in 2019 when a proposal was filed asking for the disclosure of information on the company’s policies, practices, and performance on Indigenous rights and relations? If so, how were those votes cast? What about recent proposals at Enbridge, the Bank of Nova Scotia, Origin Energy, First Quantum, and other companies? Investors can also ask about how their managers are obtaining data on Indigenous rights and relations at their portfolio companies, and how they incorporate such data into asset oversight (e.g., company valuation and the assessment of future financial performance).
MS: We need investors, service and data providers, researchers, and others connected to the investment community to continue to explore and highlight the financial and business benefits of inclusion and Indigenous rights respect, rather than just the traditional moral and ethical reasons. We’re not just doing this because it’s a nice and moral thing to do; we’re doing it because it also mitigates potential risks and expenses. We also should highlight the successes of investor action at companies like TMX Group this spring, which shows that progress is possible across capital markets, and also demonstrates how widespread interest is in seeing companies act on reconciliation and respectful relations with communities.
QUESTION: How can we decolonize business schools and foster the integration of Indigenous knowledge into university (including, but not limited to business schools) curriculum?
MS: We should be Indigenizing curriculum to teach the true history of Indigenous peoples in Canada and across the world. We should look for innovative ways to rectify past inequities and imbalances of power moving forward. We need to address systemic barriers that have kept Indigenous peoples out of the mainstream economy and its success. There are strategic benefits of partnerships with Indigenous communities and businesses, and these should be highlighted within business schools. We need to ensure diverse voices are informing and facilitating the delivery of curriculum.
KW: It is critical that universities, including business schools, recognize and honour the validity and importance of Indigenous epistemologies and ontologies. For too long, we have privileged certain voices and perspectives, and our institutions have served to maintain the status quo rather than build a more inclusive, productive future that prioritizes the wellbeing and success of all people.
Indigenous perspectives should be incorporated across the academy, including into how we look at commerce. Indigenous values and ways of knowing are informative and need to be embedded into how we structure the economy – business schools are well positioned to help ensure this by exposing future business leaders to a broad diversity of perspectives and thought leadership.
View the report: Indigenous Peoples & Responsible Investment in Canada