Without Indigenous Rights It's Not Sustainable : Why Corporate Respect for Indigenous Rights is an Essential Component of Sustainable Finance

As climate change worsens and concern among corporations and investors grows about the need to protect the environment and biodiversity, the imperative to respect Indigenous rights will only increase, given the fundamental role that Indigenous peoples play in protecting the ecosystems around the world that are crucial to climate stability. Yet while some investors－ primarily socially responsible investors－are attempting to mainstream Indigenous rights respect into their practices, there has not been a widespread adoption of these norms as a core part of sustainable finance. To understand why, this paper reviews the international legal framework on Indigenous rights, the role of Indigenous peoples in climate change mitigation, and prevailing frameworks for corporate sustainability. This review demonstrates that current frameworks and practices do not provide investors a sufficient understanding of financial risks related to disrespect for Indigenous rights, nor the actual and potential adverse impacts on Indigenous peoples and their territories. This may represent under-examined financial risk, so this article then analyzes the types of financial risk firms may face from ignoring Indigenous rights, illustrated with case studies. Finally, noting the expansion of markets for energy transition minerals, the authors predict an increase in risks both to Indigenous peoples as well as to investors.As such, the authors argue that Indigenous rights is central to sustainable finance, meaning investors should establish policies of respect for these rights and governments should expand regulatory frameworks to guide disclosure and risk mitigation