A new report has found that none of Canada’s 11 largest pension managers have publicly disclosed investment policies that are fully aligned with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) or its foundational principle of free, prior, and informed consent (FPIC). The comprehensive assessment by Shift: Action for Pension Wealth and Planet Health, titled Indigenous Rights and Canadian Pension Funds, highlights significant gaps in how major Canadian pension funds integrate Indigenous rights into their investment strategies, despite the growing recognition of these principles as material financial risks.
The report, which analyzed reconciliation action plans, proxy voting guidelines, and investment policies as of July 31, 2026, revealed that every manager reviewed, including the Crown corporation Canada Pension Plan Investment Board (CPPIB), demonstrated shortcomings in their investment policies concerning FPIC. This lack of explicit integration exposes these financial institutions and the companies they invest in to a range of potential financial and reputational damages, including regulatory delays, costly court challenges, public and political opposition, and significant project cost overruns.
A Critical Gap in Responsible Investment
The findings underscore a significant disconnect between the stated commitments of many Canadian pension funds towards environmental, social, and governance (ESG) principles and their practical application when it comes to Indigenous rights. Grand Chief Stewart Phillip, president of the Union of British Columbia Indian Chiefs, emphasized the urgency of this issue, calling on the Canada Pension Plan Investment Board and other investors to unequivocally demonstrate that FPIC is fully embedded in their investment decision-making processes. "Respecting First Nations title and rights through free, prior, and informed consent is fundamental to responsible investment," Grand Chief Phillip stated in the release accompanying Shift’s report.
The report categorizes risks associated with the failure to respect Indigenous rights as material to investors with holdings in infrastructure, natural resources, real assets, and companies operating on lands historically and currently held by Indigenous peoples. These risks are not merely ethical considerations but are increasingly recognized as significant financial liabilities that can impact the long-term sustainability and profitability of investments.
Varying Degrees of Policy Alignment
While no fund achieved full alignment, the Shift report identified varying levels of engagement with FPIC principles among the reviewed pension managers. Only two entities, the OPSEU Pension Trust (OPTrust) and the University Pension Plan, were assessed as having publicly disclosed proxy voting guidelines that are aligned with FPIC. These guidelines are crucial mechanisms through which investors can influence corporate behavior and ensure adherence to their stated principles.
Other significant pension managers, including British Columbia Investment Management Corporation (BCI), the Ontario Municipal Employees Retirement System (OMERS), and PSP Investments, were noted to have existing guidelines. However, these were flagged as not being comprehensive enough in their scope or explicit in their commitment to FPIC. This suggests that while some awareness of Indigenous rights exists, the practical implementation and articulation of these principles within their investment frameworks remain insufficient.
Alberta Investment Management Corporation (AIMCo) was specifically highlighted for its omission of Indigenous rights from its 2024 and 2025 annual reports, current proxy voting guidelines, and other investment policies. This absence indicates a significant gap in AIMCo’s public disclosure and stated commitment to respecting Indigenous rights in its investment activities.
Infrastructure Investments and Indigenous Partnerships
The report also shed light on specific investment activities, noting that at least four major pension managers have entered into partnerships with First Nations groups on fossil fuel infrastructure projects. While these partnerships can be framed as forms of "economic reconciliation," the report cautions that Indigenous equity participation alone does not inherently signify that broader Indigenous rights issues have been adequately resolved.
Examples cited include AIMCo’s 85 percent stake in the Northern Courier Pipeline, which transports bitumen and diluent. This pipeline project involves a partnership where First Nations and Métis Nations, alongside Suncor, acquired a 15 percent equity interest through the Astisiy Limited Partnership in 2021. Similarly, CPPIB-owned Wolf Midstream divested a 43 percent interest in the Access NGL Pipeline System to five Alberta-based First Nations and Métis Settlements in 2023.
BCI’s role as a lead investor in 2025 supporting 38 First Nations in acquiring a 12.5 percent equity stake in a gas pipeline system through the Stonlasec8 Indigenous Alliance Limited Partnership’s $736 million bond issuance was also detailed. Furthermore, OPTrust’s portfolio company, Kineticor, co-owns the Cascade gas plant with six First Nations and a consortium of infrastructure investors.
These instances highlight a trend where pension funds are engaging in infrastructure projects that involve Indigenous communities. However, the Shift report critically examines whether these economic arrangements are being pursued in a manner that fully respects and upholds the rights of Indigenous peoples, particularly the principle of FPIC.
The Nuance of "Economic Reconciliation" vs. FPIC
The report argues that while economic participation can be a component of reconciliation, it is not a substitute for the rigorous application of FPIC. Proposed large-scale projects, such as LNG Canada Phase 2 and a potential West Coast oil pipeline, are identified as potentially incorporating elements of "economic reconciliation" without necessarily securing FPIC from all impacted Indigenous nations. This distinction is crucial, as true reconciliation requires the recognition and upholding of inherent rights, not just the distribution of economic benefits.
Shift further contends that investments framed as "reconciliation-aligned" are not automatically climate-aligned. The report advocates for a dual-pronged due diligence approach, urging pension funds to assess their holdings from both a rights-based and a climate-centred perspective. This holistic approach is essential to ensure that investments contribute to genuine sustainable development and respect for all stakeholders.
Beneficiary Concerns and Fund Responses
The report also points to direct engagement from beneficiaries of pension funds, indicating a growing awareness and demand for accountability. At OPTrust’s April 2026 annual meeting, a beneficiary questioned whether the fund would exclusively invest in companies that respect FPIC. The response from president and chief executive officer Jo Taylor revealed a degree of reluctance, with Taylor describing a commitment to any single set of criteria as "a significant restriction" on the fund’s broader investment activities. This response suggests a tension between adhering to a potentially restrictive but rights-aligned investment mandate and maintaining the flexibility for diverse investment opportunities.
Similarly, at OMERS’ April 2026 meeting, Michael Kelly, the fund’s chief legal and sustainability officer, addressed concerns regarding potential investments in the Ring of Fire development. He stated the fund’s intention to ensure that "free, prior and informed consent is more than just that exercise, and that it’s real and meaningful." While acknowledging the importance of FPIC, the language used suggests a focus on ensuring the meaningfulness of the process, rather than a strict adherence to obtaining explicit consent before proceeding with investments.
International Benchmarks for FPIC
Shift highlights international examples of institutional investors that have publicly embraced FPIC principles. The report points to Sweden’s Andra AP-fonden (AP2) and the UK’s Scottish Widows as investors that explicitly name FPIC in their published expectations for investee companies. AP2’s expectations encompass the right to land and to free, prior, and informed consent, demonstrating a direct integration of these rights into their investment framework. Scottish Widows’ stewardship policy mandates that investee companies eliminate human rights abuses, including the absence of FPIC, from their operations and supply chains. These international precedents offer clear models for Canadian pension funds seeking to enhance their commitment to Indigenous rights.
Recommendations for Future Investment Practices
The Indigenous Rights and Canadian Pension Funds report concludes with a strong recommendation: pension funds should refuse to back projects that cannot demonstrate the free, prior, and informed consent of all impacted Indigenous communities. This call to action underscores the critical need for a paradigm shift in how Canadian pension funds approach investments that intersect with Indigenous territories and rights. By adopting such a policy, these powerful financial institutions can move beyond theoretical commitments to concrete actions that foster genuine reconciliation and responsible stewardship of resources. The implications of these findings extend beyond financial institutions, impacting regulatory bodies, corporate boards, and the broader discourse on reconciliation in Canada. The continued failure to embed FPIC into investment policies risks perpetuating colonial practices and undermining efforts to build a more equitable and sustainable future for all Canadians.
