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ESG Not Just ESG – McMillan LLP

July 25, 2023

Although certainly not without controversy, environmental, social and governance (“ESG”) practices have become a priority for companies and stakeholders today.   As a set of considerations, ESG has come to encompass a wide variety of different subject matters including environmental, ethics, human rights, corporate social responsibility, diversity, equity and inclusion. Discussions around the explicit inclusion of Indigenous considerations (hence “ESGI”) have resulted in a vigorous debate as to whether existing ESG frameworks[1] fail to meaningfully incorporate Indigenous considerations[2] even in contexts where the well established constitutional duty to consult and, where appropriate, accommodate, Indigenous interests is in play.

The reality often is that existing ESG frameworks are not developed with Indigenous peoples’ input and fail to adequately consider the need for meaningful consultation or to fully take account of the broad spectrum of rights held by, and the potential for impacts on, Indigenous communities. For example, under the GRI’s standard, Indigenous issues are considered important for the disclosing company only when a court action or formal complaint is initiated by Indigenous people against the disclosing company[3]. At other times, such frameworks limit their sphere of action to those aspects of an entity’s activities that are subject to the duty to consult. To this extent, ensuring that ESG in appropriate contexts means in practice ESGI is to pay heed to both the political milieu of the country and the developing demands of stakeholders.

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