Case study by SHARE & NATOA

In the spirit of showcasing leadership and raising standards of responsible investment among all our signatories, we are pleased to publish case studies of all the winning and shortlisted entries for the PRI Awards 2021.

Give a brief overview of your initiative, its objectives, and why you decided to undertake it.

The National Aboriginal Trust Officers Association (NATOA) and the Shareholder Association for Research and Education (SHARE) are partners in the Reconciliation and Responsible Investment Initiative (RRII) – an innovative project that is mobilising institutional investors as allies with Indigenous peoples in contributing to reconciliation and in building a vibrant Indigenous economy.

The initiative is grounded in the Canadian Truth and Reconciliation Commission’s Principles of Reconciliation and Call to Action 92, which urged businesses to adopt the UN Declaration on the Rights of Indigenous Peoples as a reconciliation framework and to apply its principles, norms and standards to corporate policy and core operational activities involving Indigenous peoples and their lands and resources – including equitable access to jobs, training and educational opportunities in the corporate sector.

Its vision is one where institutional investors, led by Indigenous investors and organisations (e.g. the growing number of Indigenous-owned investment trusts), use their capital and voices to promote positive economic outcomes for Indigenous peoples including through employment, support for and investment in Indigenous entrepreneurs, increased partnerships with Indigenous communities and respect for Indigenous rights and title.

The initiative mobilises investor engagement with investee companies to enhance diversity, equity and inclusion efforts focused on Indigenous peoples, targeted procurement opportunities, governance changes and policies that align with the UN Declaration on the Rights of Indigenous Peoples.

Most importantly, the initiative has sought to re-define the relationship of investors with Indigenous peoples from a risk management-focused approach (“this project requires better relations or may experience delays or regulatory problems”) to one that considers a more holistic set of opportunities that engages Indigenous worldviews, concepts of fiduciary duty and Indigenous leadership in order to fully include Indigenous people in economic decision-making and opportunities.

Describe how your initiative is aligned to Active Ownership 2.0, including:

  • The significance of the systemic, real-world outcomes it seeks.
  • How the initiative uses a variety or combination of stewardship tools/activities to achieve outcomes.
  • The theory of change for the initiative (making clear how the initiative intends to drive real world outcomes through use of the selected tools/activities).
  • The ambition, ingenuity and/or effort of the initiative.
  • How collaboration was used to drive outcomes.
  • Any challenges associated with the initiative and how these were overcome.

Addressing systemic racism and exclusion may ultimately benefit individual holdings but it is fundamentally focused on redressing deep flaws across the entire economy. It does not ask of institutions – whether investors or issuers – whether there is a positive net present value for Indigenous inclusion, but rather whether structures that systematically exclude Indigenous people from economic participation can ever be considered acceptable in a sustainable economy.

Indigenous populations in Canada are the fastest growing and youngest populations in the country, and their rate of entrepreneurial new business development is higher than the national average, and yet they are systematically under-represented in employment opportunities, investment and financing, corporate leadership and board seats.

Early research from SHARE found a profound lack of interest in or attention to Indigenous inclusion from both issuers and investors, except as a possible risk factor for major resource extraction projects. The purpose of RRII was to turn that on its head and re-define Indigenous inclusion as an opportunity.

The programme was designed not just to address investor risk, but to design actions that address the systemic problem at the root. Having benefited from a continuing public conversation on the means of addressing historic exclusion and dispossession, RRII has identified specific actions across the whole investment chain that different actors can take to participate in building an inclusive economy.

Further, RRII involves Indigenous leaders directly. RRII’s theory of change is built on the principle that addressing systemic racism has to start by empowering those who have traditionally been excluded from investment decision-making. The initiative is not a standard “human resources”-led approach to diversity, equity and inclusion, but a comprehensive anti-racist programme to mobilise capital market actors to address real-world outcomes that affect millions of Indigenous people on the ground.

The initiative’s work is centred on three pillars, which exemplify its theory:

  1. Awareness and leadership: To raise awareness and deepen leadership among Indigenous trusts and other Indigenous investment decision-makers in responsible investment implementation;

  2. Allyship: To deepen commitments from non-Indigenous investors, regulators and other capital market players in aligning policies and practices with the broader goals and principles of reconciliation, thus expanding their contribution to Indigenous economic opportunities and growth of the Indigenous economy; and

  3. Accountability: To support greater accountability from the investment community and corporate Canada on reconciliation including the adoption of policies and practices that align with Indigenous rights and title, the Truth and Reconciliation Commission’s Call to Action 92, and the United Nations Declaration on the Rights of Indigenous Peoples.

Activities to support this work include:

  • Ground-breaking research that collected and articulated Indigenous legal systems perspectives on fiduciary duty which deepen the very definition of responsible investment, and convening discussions with legal experts, Indigenous leaders and investors on the issue;

  • Regular workshops for Indigenous trustees across Canada on taking control of investment policies and practices and stewardship activities;

  • Guidebooks, tools, video resources and other materials for both Indigenous and non-Indigenous investors to incorporate reconciliation into investment decision-making, available at;

  • Regular investor conferences to bring together Indigenous leadership and business leaders with mainstream institutional investors;

  • Focused shareholder engagement campaigns to promote changes at the issuer level related to community relations, Indigenous employment targets, board and leadership diversity targets, and targets for procurement from Indigenous-owned businesses;

  • Successfully lobbying for changes to Canadian corporate law creating an obligation for issuers to report on Indigenous diversity policies and actual results at the board and executive level;

  • Promoting inclusion of Indigenous issues and presentations by Indigenous leaders at mainstream investor events across North America; and

  • Development and promotion of new proxy voting guidelines for institutional investors that include criteria on Indigenous rights and participation.

The initiative is grounded in a partnership between NATOA and SHARE, two non-profit associations created to support trustees in investor stewardship, and is enhanced through collaboration with a wide variety of Indigenous organisations.

The results achieved in the initiative to date, including evaluation of its success against the objectives; any adjustments to plans going forward; any insights learned from this project that can be applied more broadly?

To date, the initiative has succeeded in:

  • Involving hundreds of participants in Indigenous-focused educational and training activities, and bringing Indigenous leadership and issues to many hundreds more through conferences and panels for mainstream investors;

  • Creating awareness of both the opportunity and the scope of investor action on reconciliation to public attention through media outreach;

  • Creating investor-focused tools as discussed above that help Indigenous and non-Indigenous institutions incorporate the “I” into “ESG”;

  • Motivating policy and practice changes at investee companies through direct investor engagement, including new Indigenous rights due diligence and community engagement measures, and new corporate Indigenous employment, advancement and procurement goals;

  • Bringing Indigenous leadership into direct engagements with investee companies;

  • Engaging new partnerships between Indigenous organisations and key capital markets actors (such as the new relationship between the Toronto Stock Exchange and the Canadian Council for Aboriginal Business); and

  • Creating changes to corporate law in Canada requiring disclosure on Indigenous diversity policies and results.

While RRII has been focused on Indigenous inclusion as an imperative in the North American context, the model it has adopted can be effectively applied to other efforts to address systemic racism and economic exclusion through capital markets actions. Lessons learned include that:

  • Efforts needs to be grounded in the experience and leadership of the people that are affected by investor action or inaction;

  • Partnerships need to be built and fostered between investor organisations and leading organisations in the field; they cannot be outsourced to investment data providers; and

  • Work needs to encompass the whole investment chain and ecosystem: anti-racist actions must go beyond a human resources approach in the asset management industry, to be directed at producing anti-racist outcomes in the real economy.