Partnering with Indigenous Peoples to protect biodiversity
While Indigenous Peoples represent about 5 percent of humanity, their traditional territories encompass 80 percent of the earth’s biodiversity, and their livelihoods are often highly dependent on nature. Not surprisingly, they have proven to be effective stewards of biodiversity conservation — over 90 percent of their lands are in good or fair ecological condition.
Research shows that land managed by Indigenous communities has significantly lower deforestation rates than land managed by other forest users. This has big implications not only from a biodiversity perspective but also from a climate-change perspective.
Healthy forests act as carbon sinks, while degraded and deforested areas are a carbon source. In the Amazon, for example, forested areas traditionally owned, managed, used, or occupied by Indigenous Peoples acted as carbon sinks from 2001 to 2021, whereas forests outside these areas acted as a carbon source due to high rates of deforestation and forest degradation (see Figure 1).
Figure 1: Carbon removals compared to carbon emissions in forests inside and outside of Indigenous territory.
Source: World Resources Institute (January 2023)
Custodians of biodiversity
Indigenous lands are viewed as critical to achieving international goals for biodiversity and forest conservation, underscoring the need for conservation efforts that support Indigenous Peoples’ rights and that recognize their contributions. This is reflected in the recently adopted UN Global Biodiversity Framework (GBF), which acknowledges Indigenous Peoples as “custodians of biodiversity and partners in the conservation and restoration” and calls for respect of their rights, ways of life, and traditional knowledge and practices.
The contributions of Indigenous communities to biodiversity conservation should be acknowledged by financial institutions, especially when investing in nature — a field where the financial sector is seen as “critical” to achieving the GBF’s biodiversity goals. The GBF includes a target to scale global funding for nature to USD 200 billion per year by the end of the decade, and financial institutions are expected to play a significant role in facilitating such investments.
However, for the financial sector, investing in nature comes with several challenges, including the unpredictable and complex outcomes of conservation and restoration projects. This issue has led to long-term effects of biodiversity projects being overlooked, potentially undermining their effectiveness. A sobering example can be found in accusations that over 90 percent of rainforest-related carbon offsets verified by Verra, the world’s leading carbon standard for the voluntary offsets market, are “worthless” and “do not represent genuine carbon reductions.”
Partnerships with Indigenous Peoples are one way of overcoming this challenge. Indigenous people across the globe have engaged in “patient, observational science and practice” for tens of thousands of years, providing them with knowledge that has the potential to inform investments in nature. Indigenous knowledge is grounded in lived experience with unpredictability and complexity.
Partnerships build resiliency
Partnering with Indigenous Peoples can help build conservation projects with positive long-term impacts. However, investments in nature or nature-based solutions on Indigenous lands are often characterized by limited involvement of Indigenous communities or even a violation of their rights.
To avoid this, financial institutions can take a “do-no-harm” approach, for example, by requiring their clients to show alignment with the International Finance Corporation’s Performance Standard 7 on Indigenous Peoples and sometimes requiring free, prior, and informed consent (FPIC) (see Figure 2).
Figure 2: Financial institutions’ policies often have specific sections on considerations related to Indigenous Peoples.
Source: Policy analyzed in ECOFACT’s Monitoring Peer Policies.
For investments in nature that build on Indigenous knowledge, it is, however, necessary to go beyond avoiding harm and to establish long-term partnerships, focusing on the opportunities such partnerships can provide.
Good intentions are not enough. Partnering with Indigenous Peoples requires financial institutions to respect the deep cultural differences and address challenges that can arise from these. Helena Gualinga, co-founder of the Indigenous Youth Collective of Amazon Defenders, explains that for partnerships with Indigenous Peoples to work, their structures of governance and decision-making need to be considered.
“We have our own structures of governance, we have our own structures of decision-making. And that needs to be taken into account when these projects want to collaborate with Indigenous people. We need to make sure that Indigenous people are at the centre of decision-making and are not being consulted once the decisions have already been made.”
– Helena Gualinga, Co-Founder of the Indigenous Youth Collective of Amazon Defenders.
A recent report by the World Economic Forum provides investors with insight and perspectives from Indigenous communities on embedding their knowledge in the conservation and restoration of landscapes. While it only intends to serve as introduction to “the richness and complexity of Indigenous peoples’ relationship to nature and the role they can play in maximizing our shared interest in nature-based investments in conservation and restoration,” the report offers valuable background and recommendations on how to build meaningful and successful partnerships with Indigenous Peoples. It identifies key complexities that investors should understand when seeking partnerships with Indigenous communities and calls on investors to make sure their projects respect the rights and responsibilities of Indigenous Peoples.
ECOFACT understands stakeholder expectations
Financial institutions need to acknowledge that positive biodiversity outcomes are intertwined with respecting the rights of Indigenous Peoples — and in many cases this requires going beyond minimum expectations when establishing mutually beneficial partnerships.
At ECOFACT, we closely monitor ESG developments. We can help you understand and align with evolving stakeholder expectations. If you need support in adjusting your company’s approach to Indigenous Peoples, do not hesitate to reach out.