By Mary-Michelle Brown
As ESG ratings continue to gain importance to investors and the market, standards must constantly be reevaluated. Typically, ESG policies fail to incorporate Indigenous interests and perspectives — even though their inclusion is essential to addressing the systemic injustices faced by Indigenous people today. Blackrock, for instance, uses an ESG framework that does not mention Indigenous people. This is surprising considering projects often entail using indigenous land, which can negatively affect the community if not carried out appropriately and impact how a company is rated regarding social factors.
KPMG Canada is the most recent company to form a plan of action centred around Indigenous involvement and interests. Following the Truth and Reconciliation Commission of Canada’s call for businesses to operate according to the United Nations Declaration on the Rights of Indigenous Peoples, KPMG Canada has amended certain aspects of their business plan to incorporate these values. The declaration states the need to keep Indigenous interests in mind when conducting business activities and writing corporate policy. Namely, it emphasizes increasing collaboration and consultation with indigenous communities in the business world. To ensure the seamless implementation of these ideas into the company, KPMG has chosen to develop their own strategy, which has been named the “Truth and Reconciliation Action Plan.”
The main goal of the Truth and Reconciliation Action Plan is to advance relationships with Indigenous communities by providing resources to promote long-term economic growth and social benefits. Their plan has three main goals: to advance an inclusive culture, build allyship and empower Indigenous people. This includes everything from establishing a program to educate current employees on indigenous issues and Canada’s colonial history to increasing the hiring of indigenous people and improving the collaboration and dialogue between KPMG Canada and these communities. This plan was developed in collaboration with Indigenous-owned consulting firms, clients and communities to ensure the occurrence of reconciliation within an Indigenous framework.
Although ESG guidelines provide a thorough overview of a company, critics have argued that these standards make it hard to analyze aspects of a company that are not quantifiable, such as relationships. While it may be possible to quantify the number of Indigenous people hired at a particular company, evaluating a business’s relationship with a community is not easy. To ensure the successful implementation of its action plan, KPMG Canada has instituted “Key Performance Indicators” to measure the progress of each of its goals. They have also committed to publishing an annual report with updates to hold the company accountable. Since many of their ideas are centred around the relationship between Indigenous communities and businesses, it will be interesting to see how these indicators portray the relationship, as they are qualitative rather than quantitative in nature. In other words, it is not necessarily as easy to determine the success or failure of specific goals.
Either way, the purpose of these new policies implemented by KPMG (and hopefully soon other businesses) is clear. By putting reconciliation action plans into effect, companies are doing their part in helping Canada slowly recover from the lasting effects of colonialism. Consultation is essential and must be done effectively to prioritize indigenous interests and limit the negative impacts of new projects on Indigenous communities. Following the footsteps of KPMG Canada, Canadian companies have an opportunity to make a difference in indigenous reconciliation — and it is up to them to step up to the task. One thing is certain — it is well time for Canadian businesses to play their part by developing action plans that place Indigenous interests at the forefront of their goals.
Sources:
https://cassels.com/insights/regulatory-affairs-towards-an-indigenous-approach-to-esg-and-climate-change-action/
https://www.torys.com/Our%20Latest%20Thinking/Publications//2021/03/esg-and-indigenous-communities-the-need-to-focus-on-relationships/
https://esgnews.com/kpmg-in-canada-implements-truth-and-reconciliation-action-plan/