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It\u2019s now clear that the national priorities of Net Zero and reconciliation with Indigenous Peoples are inextricably linked. In the same spirit, we expect RBC\u2019s reconciliation journey will increasingly intersect with our climate priorities.<\/p>\n
92 to Zero<\/em> highlights the incredible value that Indigenous capital, knowledge and decision-making can bring to a Net Zero transition. We\u2019ve recently launched a national initiative of \u201clistening circles\u201d led by former Assembly of First Nations national chief Phil Fontaine that this report will help inform and inspire\u2014and lead to more from us in the years ahead.<\/p>\nNow, each of us must act to break down the ongoing systematic barriers that prevent the full realization of Indigenous capital, supporting reconciliation and climate action. We hope this report will propel us further down that path.<\/p>\n
We acknowledge that RBC resides on the traditional and contemporary treaty, and unceded territories of Turtle Island (North America) that are home to many First Nations, Inuit, and M\u00e9tis peoples.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Key Findings<\/b><\/span><\/h3>\n <\/p>\n
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\nCanada\u2019s road to Net Zero will rely heavily on vital sources of capital held by Indigenous nations. RBC estimates Canada needs roughly $2 trillion in capital over the next 25 years, much of it from Indigenous sources\u2014or unlocked by Indigenous partnerships, including ownership.<\/li>\n An Indigenous-led approach to the climate transition, and economic opportunities toward Net Zero, will be essential to economic reconciliation.<\/li>\n Specifically, to achieve Net Zero and economic reconciliation, Canada needs to leverage four forms of Indigenous capital:<\/li>\n<\/ul>\n<\/div>\n\n
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Natural Capital:<\/b> Indigenous lands hold vast resources essential to green energy systems, and will be essential to the clean tech revolution. At least 56% of advanced critical mineral projects, 35% of top solar sites and 44% of the better wind sites involve Indigenous territory.<\/div>\n<\/div>\n\n
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Financial Capital:<\/b> The growing wealth of Indigenous communities includes an estimated $20 billion in trust assets and up to $100 billion in outstanding land and other claims. This capital will be critical to \u201ccrowding in\u201d billions of dollars in private and public clean energy investment for Net Zero initiatives.<\/div>\n<\/div>\n\n
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Intellectual Capital:<\/b> Incorporating Indigenous values and traditional knowledge in the transition will lead to more sustainable and profitable outcomes. It can establish Canada as a leader in regenerative techniques, the preservation of biodiversity, and nature based carbon solutions\u2014a powerful advantage as Canada competes with other countries for capital to finance the energy investment.<\/div>\n<\/div>\n\n
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Human Capital: <\/b> Emerging young Indigenous leaders and entrepreneurs will be critical generators of the innovative thinking needed to fuel the green transition. And as the fastest growing youth cohort, Indigenous Canadians can help power a Net Zero workforce that will include valuable jobs in skilled trades, advanced technology, business ventures and more.<\/div>\n<\/div>\n\n
What is 92?<\/b><\/font><\/h4>\n To redress the legacy of residential schools and advance the process of Canadian reconciliation, the 2015 Truth and Reconciliation Commission issued 94 calls to action. The 92nd dealt specifically with business and reconciliation.<\/p>\n
We acknowledge that RBC resides on the traditional and contemporary treaty, and unceded territories of Turtle Island (North America) that are home to many First Nations, Inuit, and M\u00e9tis peoples.<\/p>\n<\/div>\n
Indigenous communities can unlock green economic growth<\/b><\/span><\/h3>\n For many Indigenous Peoples in Canada, braiding is a sacred act. It brings together seemingly disparate sinews, with the goal of building a stronger, more unified whole. Strands of hair, breakable on their own, become more resilient when braided together. Blades of sweet grass are woven and burned with sage, cedar, and tobacco, the ceremony strengthening the community, which in turn cares for the plant.<\/p>\n
Similarly, to meet the generational challenge of climate change, Canada must weave together the critical strands of Indigenous capital to secure a durable Net Zero strategy.<\/p>\n
This new approach is about much more than money. It includes natural capital\u2014vast portions of critical mineral, solar and wind developments depend on access to Indigenous lands\u2014along with growing Indigenous wealth (financial capital), traditional Indigenous knowledge (intellectual capital) and powerful Indigenous entrepreneurship and talent (human capital). Each is required to strengthen the whole.<\/p>\n
To unleash this capital, Canada will need new tools for clean energy development. That means establishing stronger corporate commitments and incentives for Indigenous partnership, greater sharing of project benefits, and financeable models of Indigenous equity participation. It means developing investment criteria that incorporates Indigenous perspectives and more intentional development of Indigenous entrepreneurs and youth leadership.<\/p>\n
Above all else, it means establishing a new approach to partnership, one that reinforces the role of Indigenous rights, leadership, decision-making and consent.<\/p>\n
These concrete actions will pull growing sources of Indigenous capital toward Net Zero. They\u2019ll also mobilize critical private capital, by building a foundation of predictable development, better environmental outcomes, and expansive social impact.<\/p>\n
Meaningful partnerships can\u2019t be rushed. But the demands of the Net Zero transition are immediate\u2014and there\u2019s only one opportunity to get it right.<\/p>\n
The onus now is on everyone to move forward together.<\/p>\n
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Natural Capital: <\/b>The path to Net Zero winds through Indigenous land<\/span><\/h3>\n<\/div>\n<\/div>\n Canada comes to the global climate challenge with a unique set of advantages. Its landscape includes vast quantities of both conventional and renewable energy resources\u2014assets that, while enviable, bring challenges. Even as the country continues to rely on oil and gas, and works to more sustainably produce it, it\u2019ll need to begin harnessing the resources to power the clean economy of the future.<\/p>\n
And these resources are attached largely to Indigenous lands. RBC research shows at least 56% of advanced critical minerals projects involve Indigenous territory. Top opportunities for renewables development also overlap with Indigenous lands, including at least 35% of top solar sites and 44% of better wind sites. And Indigenous rights exist over many other territories that will require engagement.<\/p>\n
To include these assets in its Net Zero strategy, Canada will need a new model for Indigenous partnerships\u2014one that begins with meaningful engagement and consent.<\/p>\n
Indigenous land contains key resources<\/h4>\n\nAt least 56% of the $60 billion in new critical mineral advanced projects involve Indigenous lands, including 26% within 20 kilometres of Indigenous reserves, settlement lands, and other title-like areas, and another 30% on unceded territories where Indigenous rights are asserted.<\/li>\n At least 35% of the top sites for the required $30 billion in solar development are near title-like lands.<\/li>\n And at least 44% of the better sites for the needed $135 billion in wind development are near title-like lands.<\/li>\n<\/ul>\n<\/p>\n
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Indigenous communities have \u2018a say\u2019, but not decision-making power<\/h4>\n Greater legal and political recognition of land rights has empowered Indigenous voices at the negotiating table for development projects, particularly in unceded and modern treaty territories.<\/p>\n
These advancements follow decades of government policy that removed Indigenous Peoples from decision-making and deprived them of long-held land and treaty rights. This created a cycle of underinvestment, poverty, and trauma that persists in many communities today.<\/p>\n
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How Indigenous Peoples were isolated from decision-making<\/b><\/font><\/h4>\n Early cooperation between distinct and sovereign settler and Indigenous groups created mutually beneficial trade and strategic military alliances that aided European survival on the land. But over time, official government policies of land dispossession, paternalistic suppression, and cultural assimilation took hold. The government never fully honoured original agreements and it removed Indigenous Peoples from the decision-making table.<\/p>\n
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It\u2019s now clear that the national priorities of Net Zero and reconciliation with Indigenous Peoples are inextricably linked. In the same spirit, we expect RBC\u2019s reconciliation journey will increasingly intersect with our climate priorities.<\/p>\n
92 to Zero<\/em> highlights the incredible value that Indigenous capital, knowledge and decision-making can bring to a Net Zero transition. We\u2019ve recently launched a national initiative of \u201clistening circles\u201d led by former Assembly of First Nations national chief Phil Fontaine that this report will help inform and inspire\u2014and lead to more from us in the years ahead.<\/p>\nNow, each of us must act to break down the ongoing systematic barriers that prevent the full realization of Indigenous capital, supporting reconciliation and climate action. We hope this report will propel us further down that path.<\/p>\n
We acknowledge that RBC resides on the traditional and contemporary treaty, and unceded territories of Turtle Island (North America) that are home to many First Nations, Inuit, and M\u00e9tis peoples.<\/p>\n<\/div>\n<\/div>\n<\/div>\n
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As Indigenous communities regain rights and sovereignty, business methods are inching closer to the true spirit of initial cooperative agreements between Indigenous and settler societies, or<\/p>\n
Treaties, that guided the sharing of land and living together in parallel.<\/p>\n
But conflicts continue to erupt, including public demonstrations against development companies. While the courts have signaled a growing willingness to set precedent for consultation, they\u2019ve also established that Indigenous rights are not absolute.<\/p>\n
Government often navigates difficult decisions in the overall national interest. But this maxim has led to problematic policy and flawed corporate approaches to Indigenous engagement. Too often, Indigenous Peoples have been given only checkbox approval on planned projects that don\u2019t respect their community values, governance, timelines, or consensus-building processes.<\/p>\n
Resulting clashes have led to cancelled projects, runaway costs and timelines, and rushed planning phases that fail to leverage extensive Indigenous knowledge of land stewardship.<\/p>\n
An oppositional approach is one way to pursue energy development. But it\u2019s not the optimal one. Resulting court challenges, broken social trust, delays, and investment uncertainty pose a sizeable threat to Canada\u2019s climate ambitions.<\/p>\n
Striking true partnership<\/h4>\n Some Indigenous leaders have told Canada\u2019s business community they\u2019re thinking about this in the wrong way. Rather than represent a project risk, Indigenous Peoples could bring something unique to the table. They can potentially improve certainty and returns, offer deep location-specific knowledge and better environmental and social outcomes. And as the rights of Indigenous<\/p>\n
Peoples continue to draw international attention, their reintegration into clean energy development could emerge as a competitive strength.<\/p>\n
\u201cI think a lot of proponents are going to have to shift their mindset from thinking of Indigenous people as a risk to a possible source of capital and an enhancement to their project.\u201d<\/em><\/h4>\n<\/p>\nMark Podlasly
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To realize it, Indigenous communities must be engaged as true partners. That means including their voices, values, knowledge and decision-making from the earliest stages of a project. Sufficient time needs to be allotted for this process, similar to the months or years afforded for Western development work.<\/p>\n
Meaningful engagement and consent is an ongoing exercise of building trust, sharing information, and acting to realign the terms of the partnership based on evolving priorities. It also includes the possibility of saying no\u2014some projects will not align with community values, and they may have to be rerouted or in some cases abandoned.<\/p>\n
The power of Indigenous equity<\/h4>\n Indigenous equity ownership of new energy projects is rising. Equity improves the risk profile of projects, both through ongoing information sharing and the ability of both parties to shape their direction.<\/p>\n
Equity participation can build intergenerational wealth and guide land stewardship. This aligns with the long-term sustainable world view of many nations and in particular, the Haudenosaunee (Iroquois) Seventh Generation Principle, where decisions are partly determined by the impact they\u2019ll have on the next seven generations.<\/p>\n
By contrast, near-term commitments in many of today\u2019s impact benefit agreements (around Indigenous procurement, employment, community investment or royalties) are increasingly out of sync with the priorities of Indigenous communities, especially in light of the valuable sources of capital they control.<\/p>\n
Equity is not a universal solution. Some communities may not have the risk appetite or expertise to manage equity investment. Infrastructure development is complicated and risky, and project finance lenders may be wary of significant partners that lack major construction or operational experience. Certain projects that focus on transition fuels or non-dominant abatement technologies\u2014like oil, natural gas, or carbon capture, utilization, and storage\u2014could carry long-term risks.<\/p>\n
And equity isn\u2019t always an option for the Indigenous communities that want it. Even communities that have revenue-generating activities may find a portion of the equity contribution is unfinanceable by private lenders. For communities that lack any revenue-generating activities, the equity option is even further out of reach. Project proponents, financial institutions, and governments need to eliminate this equity financing gap. Greater capacity building and advisory services are then needed to support communities in making informed choices between different partnership arrangements, and negotiating the best terms.<\/p>\n
\u201cOur nation is not new to industrial development [\u2026] essentially we\u2019ve sat on the sidelines and witnessed the destruction of our territory, our environment, and our cultural resources to being active partners within a process where we had a seat at the table.\u201d<\/em><\/h4>\n<\/p>\nChief Crystal Smith
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Financial Capital: <\/b>Indigenous leadership will help fuel the $2 trillion transition<\/span><\/h3>\n<\/div>\n<\/div>\n Large Canadian firms with $8 trillion in global assets have committed to Net Zero, yet annual spending on green projects is still far short of the $80 billion per year required. Indigenous financial wealth isn\u2019t at the scale needed to lead financing of the $2 trillion Net Zero transition. But with more than $20 billion in trust assets and up to $100 billion in outstanding land and other claims, it can nevertheless make a significant impact.<\/p>\n
The bigger opportunity rests in the power of Indigenous financial capital and consent to crowd in the larger private funding needed for Net Zero\u2014by derisking projects, boosting returns, improving environmental outcomes, and increasing social acceptance. Mobilizing investors to support Indigenous-aligned responsible investment will accelerate this process while also enhancing economic reconciliation.<\/p>\n
Indigenous assets cycle back into communities<\/h4>\n Greater recognition and application of Indigenous land rights have added to the financial wealth of Indigenous communities. These additions stem partly from land claim settlements or compensation for past violations of treaty or other rights. With over 250 specific claims awaiting negotiation and over 160 currently under review, as well as ongoing litigation and land claims, further increases in these assets can be anticipated.<\/p>\n
Distinct from individual wealth, these assets are for the benefit of the community, supporting spending on physical, social or cultural infrastructure, economic development, or disbursements to members. They are increasingly being used to decarbonize local communities, including Net Zero projects in the built environment, renewable energy developments or transmission lines that bring cleaner electricity to diesel-reliant remote communities, or equity stakes in sustainable projects such as transition fuel facilities or wind and solar farms.<\/p>\n
The Sen\u00e1kw project on Squamish Nation reserve land in Vancouver\u2014a 12-tower, mixed-use development\u2014is the largest First Nations economic development project in Canadian history and Canada\u2019s first large-scale net zero housing development . To be developed in partnership with a private developer, the Nation is contributing the land. Costing $3 billion to construct, it could generate $8-12 billion in revenue for the Nation over the leasehold life<\/em><\/h4>\nWhile growing, Indigenous financial assets remain undersized, a result of the historic non-recognition of Indigenous rights and suppression of the Indigenous economy. There\u2019s also significant variation in the financial wealth held by communities based on treaty status (unceded, modern, or historic), location (urban or remote) and proximity to major resource projects. For example, the Squamish, Musqueam, and Tsleil-Waututh nations have major developments on their traditional unceded territories around and within modern day Vancouver. By contrast, a limited sample of 500 First Nations from 2015 to 2016 showed 50% had revenues below $3 million, whereas the top nation earned almost $100 million.<\/p>\n
Formally recognizing the value of Indigenous partnership<\/h4>\n Indigenous leaders can provide the greatest long-term certainty around infrastructure development. And Western developers and scientists are starting to recognize the value of Indigenous knowledge in project design.<\/p>\n
Governments and leading project sponsors need to financially recognize the value Indigenous partners bring to the table. Fair compensation will lead to a growing Indigenous financial asset base that can be invested back into community wellbeing and position nations for Net Zero investment. That means finding new valuation models that go beyond lands leased or rights-of-way. Right now, communities that seek an equity share after the risky construction phase often purchase a stake in a more valuable project\u2014but at a higher cost. This is despite their active participation in helping to de-risk it from the beginning. In terms of traditional knowledge, communities are often reimbursed for their time or monetary outlays, but not necessarily for their intellectual property as \u2018consultants on the land\u2019. Appropriately classifying these features as accretive to project returns may lead to their monetization, helping to close the Indigenous financial asset and equity financing gap.<\/p>\n
Indigenous-aligned responsible investment<\/h4>\n Successful Indigenous communities are investing in financial products consistent with their cultural values and using activist strategies to push companies to do better. They\u2019re scaling their impact and building capacity through partnerships with like-minded investors. The National Aboriginal Trust Officers Association (NATOA), a resource and training organization, and Share, a responsible investment organization, have created the Reconciliation and Responsible Investment Initiative. It seeks to mobilize Canadian investors to \u201c\u2026 use their voices and their capital to promote positive economic outcomes for Indigenous peoples including through employment, support for Indigenous entrepreneurs, increased partnerships with Indigenous communities and respect for Indigenous rights and title\u201d10.<\/p>\n
There\u2019s a growing understanding that Indigenous entrepreneurs and communities could be a valuable focus for impact investing approaches. Also, that Indigenous factors, like Indigenous project co-development or Indigenous say in corporate governance, may be important to the overall performance of companies and projects. But while intentions are on the rise, the tools and regulatory framework to mobilize finance remain in the early stages.<\/p>\n
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