A coalition of investors representing over $2.9 trillion (€2.6 trillion) is piling pressure on global banks to respect the rights of indigenous peoples and halt infrastructure projects that affect their way of life.
Led by Boston Common Asset Management, the group is pushing for a change to the Equator Principles – a risk management framework for financial institutions to determine the environmental and social risk in project finance.
The principles currently fall short of providing “an adequate mechanism” to avoid the kind of reputational, financial, and litigation risks brought to light by mass protests against the construction of the Dakota Access Pipeline in the US, according to the fund manager.
The pipeline now spans western North Dakota to southern Illinois, crossing land next to the Standing Rock Indian Reservation. It was completed in 2017, and first transported oil in May that year. The Standing Rock Sioux tribe is still fighting against its expansion.
Boston Common is coordinating with investors to maintain the relevance of the Equator Principles across the globe. They aim to uphold the rights of indigenous peoples whilst providing banks the necessary standards to avoid situations like the Dakota pipeline fallout in the future.
“Corporate projects can experience costly delays and disruptions when proper consultations with ndigenous communities have not been undertaken, and their valid consent has not been obtained,” the group of 50 investors, including state pension funds for New York and California, said.
The coalition maintains that indigenous peoples have the right to reject infrastructure projects that would affect them.
“Global banks face a critical decision: to strengthen the Equator Principles or otherwise fail to respect the rights of Indigenous Peoples, thereby increasing risks for banks and investors,” said Steven Heim, managing director at Boston Common.
“In line with the United Nations Declaration on the Rights of Indigenous Peoples, indigenous peoples have the right to withhold consent from projects.”
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