INSIGHT by Emil Sirén Gualinga is Swedish-Ecuadorian and a member of the Kichwa People of Sarayaku, in Ecuador, and a sustainable finance consultant
As defined by the IPCC, a just transition means “A set of principles, processes and practices that aim to ensure that no people, workers, places, sectors, countries or regions are left behind in the transition from a high-carbon to a low-carbon economy”. However, low-carbon renewable energy projects are increasingly negatively affecting Indigenous Peoples.
Between 2015 and 2022, out of 883 documented attacks against Indigenous human rights defenders, at least 134 were related to renewable energy projects, including hydropower, wind, and solar. To ensure a just and sustainable transition for all, including Indigenous Peoples, it is imperative that investors and companies fully recognize and ensure respect for Indigenous Peoples’ rights.
| The Business Responsibility to Respect Indigenous Peoples’ Rights
International law provides Indigenous Peoples a robust network of instruments and jurisprudence aimed to protect their rights, particularly to their lands and territories. Where Indigenous Peoples may be affected, their free, prior, and informed consent (FPIC) should be obtained through good faith consultations, prior to the approval of a project.1 Nonetheless, where Indigenous Peoples are affected by the utilities/renewable energy sectors, too often, there is no consultation nor consent, or consultations are inadequate, fraudulent, or even violent.
| Sustainable investment frameworks and tools fail to capture Indigenous Rights
Despite the impacts on Indigenous Peoples’ rights in the utilities/renewable energy sector, sustainable investment frameworks and tools have failed to take those impacts into account. For example, Iberdrola, Vestas, EDP, and Enel all have received a “AAA” rating by MSCI ESG ratings.2 In their sustainability reports, they report that they are aligned with the EU Taxonomy Minimum Social Safeguards, which is a requirement for investments to classify as sustainable, or “taxonomy aligned”.3 Nonetheless, they have allegedly been involved in projects that failed to respect Indigenous Peoples’ rights, including in Mexico, Honduras, Brazil, Kenya, Norway, Colombia, Guatemala, USA, and Chile. Allegations towards the projects include but are not limited to failure to consult, lack of free, prior and informed consent, environmental damage, displacement, threats, and violence.4
Failure to respect Indigenous Peoples’ rights also creates financial risk, as demonstrated by EDF’s Guuna Sicarú project, in Mexico, which was suspended after several lawsuits. The Lake Turkana Wind Power Project in Kenya, in which Vestas was a joint venture partner, was found by a Kenyan Court to have acquired and leased land (occupied by Indigenous Peoples) illegally.
| Respect for Indigenous rights is necessary for meeting climate and biodiversity objectives
Many Indigenous Peoples are at the forefront of protecting nature, and a broad body of research finds that the recognition and protection of Indigenous Peoples’ rights is associated with better outcomes in nature protection.5 Research also finds that projects that fail to respect Indigenous Peoples’ rights and interests are associated with higher levels of environmental destruction.6 As such, the failure to respect Indigenous Peoples’ rights in “green energy” projects is not just contrary to international law, but also to climate and biodiversity objectives.
| The way forward
Rather than promoting a just transition for all, the industry’s current approach seems to promote a ‘lose-lose’ situation, where either Indigenous Peoples’ rights are not respected, or projects are halted due to legal or operational risks. To ensure a just transition, renewable energy projects must be fully aligned with Indigenous Peoples’ rights,7 which would in turn reduce legal and operational risk. Where Indigenous consent is given to projects, it should ensure their effective participation in decision-making, including in environmental,social, and human rights impact assessments and project design. In some parts of the world, Indigenous Peoples increasingly participate in renewable energy projects through equity co-ownership.8 On the other hand, where consent is not given, project developers must respect it, in order to avoid human rights impacts, and to reduce the risks to projects.
Investors, on their part, play an important role in preventing and mitigating human rights impacts. To this end, it is imperative that investors seek to verify the situation on the ground at the project level, as self-disclosure or ESG ratings do not adequately capture the risks or impacts. The recently published Respecting Indigenous Rights: An Actionable Due Diligence Toolkit for Institutional Investors provides investors with further guidance in this regard.
| about
Emil Sirén Gualinga is Swedish-Ecuadorian and a member of the Kichwa People of Sarayaku, in Ecuador, and a sustainable finance consultant. In addition to his consulting work, Emil engages in several projects focused on investments and Indigenous Peoples’ rights, and was the lead author of the Respecting Indigenous Rights: An Actionable Due Diligence Toolkit for Institutional Invesotors, published by Amazon Watch earlier this year.
[1] UN Declaration on the Rights of Indigenous Peoples (UNDRIP) Article 32
[2] As of July 2023
[3] Analysis based on their public sustainability reports for the year of 2022
[4] Analysis based on public sources such as the EJ Atlas; Business & Human Rights Resource Centre; Mapa de Conflitos Envolvendo Injustiça Ambiental e Saúde no Brasil; Observatorio Latinoamericano de Conflictos Ambientales
[5] See e.g., Sze, J. S., Childs, D. Z., Carrasco, L. R., & Edwards, D. P. (2022). Indigenous lands in protected areas have high forest integrity across the tropics. Current Biology, 32(22), 4949-4956.e3. https://doi.org/10.1016/j.cub.2022.09.040; see also Schuster, R., Germain, R. R., Bennett, J. R., Reo, N. J., & Arcese, P. (2019). Vertebrate biodiversity on indigenous-managed lands in Australia, Brazil, and Canada equals that in protected areas. Environmental Science &Amp; Policy, 101, 1–6. https://doi.org/10.1016/j.envsci.2019.07.002
[6] Ray, R., Gallagher, K., & Sanborn, C. (2018). Standardizing Sustainable Development?: Development Banks in the Andean Amazon. Boston University. https://www.bu.edu/gdp/files/2018/04/Development-Banks-in-the-Andean-Amazon.pdf
[7] As articulated in the UN Declaration on the Rights of Indigenous Peoples (UNDRIP)
[8] Hoicka, C. E., Savic, K., & Campney, A. (2021). Reconciliation through renewable energy? A survey of Indigenous communities, involvement, and peoples in Canada. Energy Research & Social Science, 74, 101897. https://www.sciencedirect.com/science/article/pii/S2214629620304722
| All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.
