Tribal Nations and Equity Metrics
The rights of Tribal Nations can materially impact asset valuation but are often forgotten from equity metrics.
The fact is: most entities engaged in the identification and evaluation of equity frameworks are grossly uniformed when it comes to the rights of Tribal Nations. Tribal Nations are place-based sovereigns recognized by federal law. As sovereigns, they maintain rights to land, water, and resources both within and outside of reservation boundaries. Impacts to these rights are a quantifiable and material factors for asset valuation. However, most equity metrics and financial evaluations of environmental and social impact exclude this from analysis. The result is inaccurate measurements of risk and opportunity to investors and asset holders.
Issues such as treaty rights are increasingly important to understand for project developers, investors, and operators. Treaty rights are valid, continuing legal obligations to Tribal Nations that apply to geographic areas of right and jurisdiction. These rights are often missed by developers because they frequently do not show up on land departments’ GIS maps. Importantly, that is a defect of the map, not the right. And recent Supreme Court cases enforcing these rights have identified the significant financial risk associated with failing to appropriately recognize and uphold treaty obligations in project development and operation.
The current equity framework fails as a valuation tool where it does not assess risks and opportunities associated with Tribal Nations.
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The "I" in ESG
Environmental, Social, and Governance (ESG) investment criteria are non-financial factors of asset valuation and risk. While Indigenous issues and the rights of Tribal Nations are material to these valuations and risk assessments, they are largely absent from the analysis.
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The Limits of EJ
Environmental Justice undoubtably includes Native American communities, who have been on the receiving end of environmental injustice for the entire history of the US. But it is important to note that EJ cannot encompass all Tribal rights and issues. Tribal Nations are sovereigns and the solutions offered by EJ are only effective for Tribal Nations in as much as they uphold that sovereignty and support (not diminish) the federal government’s trust and treaty obligations.
