Renewable Energy, Indigenous Peoples, and Project Siting for Values-Aligned Investors
“The urgent need to bring online additional renewable energy capacity to meet growing demand need not be put in opposition to practices that respect the rights of Indigenous Peoples. [...] Investors can drive change away from business as usual and embrace models that respect Indigenous Peoples’ self-determination and mitigate material risks.” –Renewable Energy, Indigenous Peoples, and Project Siting for Values-Aligned Investors
A company’s decision about where to locate an energy project is a critical moment to implement due diligence for impacts to people and place. Too often the due diligence completed for project siting does not include Indigenous Peoples or scope for impacts to their lands, communities, or rights, including their right to free, prior and informed consent (FPIC).
“Lack of respect for Indigenous Peoples is a pervasive pattern in extractive industries and is now being compounded in the global push for renewable energy, sustainable development, and climate solutions,” says Kate R. Finn, Founder and Director of Tallgrass Institute. “Companies and investors must plan for the time and resources necessary to integrate Indigenous Peoples’ priorities and facilitate participation to meet their core sustainability thesis.”
Tallgrass Institute, with support from Trillium Asset Management, has released Renewable Energy, Indigenous Peoples, and Project Siting for Values-Aligned Investors to help investors vet projects that bring durable benefit to investors, companies, and Indigenous Peoples.
Accelerating expansion of the renewable energy industry has increased the use of relatively land-intensive power generation technologies and the need for land holdings. In the U.S. in 2024, renewable energy projects made up 90% of newly installed energy capacity, and renewables supplied nearly 25% of electricity. At the same time, electricity demand has increased for the first time in decades due to the proliferation of data centers, residential electrification, and other factors.
The increased demand for energy and land holdings also increases the risk of attendant rights violations: “At present, the renewable energy industry often fails to obtain FPIC, engages in illegal land grabs, violates land rights, and generally mirrors the violence of the fossil fuel industry with documented human rights abuses, attacks, and criminalization of Indigenous Peoples,” says the report.
Key Takeaways
Local challenges to siting are a major factor in project delays and failures; the moment of project siting thus becomes “an opportunity for companies to redesign engagement protocols and partnerships with Indigenous Peoples.”
Industry respect for Indigenous Peoples’ self-determination and FPIC is necessary for comprehensive risk management and successful long-term business operations.
Partnerships with Indigenous Peoples and collaborative approaches to renewable energy projects can “create significant financial, social, and infrastructure benefits for Indigenous Peoples, companies, investors, and energy customers.”
High-quality disclosures from companies help address information gaps and facilitate capital deployment to where it is most productive to build the energy transition–towards projects that have Indigenous Peoples’ consent and partnership.
Because project development is a multi-year process that spans administrations and public policy shifts, operationalizing respect for Indigenous Peoples’ rights at project siting de-risks projects despite political and geopolitical flux.
Companies must align policies, due diligence practices, and engagement protocols with the standards enumerated in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) in order to safeguard from opposition related to Indigenous Peoples’ rights violations.
In many countries leading energy development such as the U.S., legal and regulatory compliance alone is insufficient due to gaps between the UNDRIP and domestic laws; without integration of the UNDRIP, investors do not have assurances that a company or developer is respecting the rights of Indigenous Peoples.
The paper concludes with seven recommendations for companies:
Make strong policy commitments specific to Indigenous Peoples;
Implement robust due diligence at the earliest stage of project planning and throughout the project lifetime;
Obtain FPIC from all Indigenous Peoples who have relationships to the proposed project site;
Provide investors with substantive disclosures pertaining to relationships with, impacts on, and FPIC of Indigenous Peoples;
Devote necessary time and resources to building relationships with Indigenous Peoples;
Communicate directly with Indigenous Peoples to center their values and priorities in project siting/design/operations; and
Negotiate robust, legally enforceable benefit sharing agreements including benefits centered on the Indigenous Peoples’ goals.
For investors, the paper recommends to engage companies, regulatory agencies, standard-setting bodies, and their networks on Indigenous Peoples’ rights including FPIC; join Indigenous-led investor working groups to strengthen knowledge and synergize efforts; and support Indigenous leadership in the energy transition by directly funding Indigenous-owned and Indigenous-led projects. To the latter, the report notes that Indigenous Peoples’ consent and self-determination gives enhanced operational certainty and can provide innovative business models that integrate economic and environmental needs for long-term viability.
Investors who embrace models that respect Indigenous Peoples’ self-determination can better mitigate material risks and solidify best practices for renewable energy development. “The project siting phase determines whether tribal sovereignty is upheld and to what extent a project will drive long-term success operationally, financially, environmentally, and socially,” says the report. “At this pivotal juncture, Indigenous Peoples' role in decision-making critically informs project trajectory.”
Renewable Energy, Indigenous Peoples, and Project Siting for Values-Aligned Investors was produced by Tallgrass Institute in partnership with Trillium Asset Management, which provided fiscal sponsorship and support. The report was written by Kate R. Finn, AnnaMae Dziallo, Melanie Matteliano, and Hannah Goins, of Tallgrass Institute, with the collaboration of Trillium Asset Management. Editorial contributions were made by Jonas Kron, Sada Geuss, Olivia Luciani, and Hyewon Han, of Trillium Asset Management.
Through targeted research, training, investor networks, and corporate and international engagement, Tallgrass Institute cultivates collaboration to activate investor and economic ecosystems aligned with Indigenous Peoples’ rights and wellbeing. We lead with Indigenous Peoples’ self-determination to foster equitable partnerships and practice to redefine the private sector’s role as one that respects Indigenous Peoples’ rights, lands, and economic priorities. More at www.tallgrassinstitute.org.
Trillium Asset Management is a values and ESG-integrated asset management firm offering investment strategies and services that advance humankind towards a global sustainable economy, a just society, and a better world. For over 40 years, the firm has been at the forefront of ESG thought leadership and draws from decades of experience focused exclusively on sustainable and responsible investing (SRI). Trillium combines impactful investment solutions with active ownership, delivering public equity, fixed income, and alternative investment strategies to institutions, intermediaries, high net worth individuals, and other charitable and non-profit organizations. More at www.trilliuminvest.com.