Closing the Gap in First Nations investing

Indigenous communities' needs must be prioritised in investment decisions, and trust must be built through representation.

Colonisation has had a profound impact on Indigenous peoples' identity and knowledge, panellists at the Responsible Investment Association of Australasia (RIAA) 2024 conference said.

Indigenous communities have largely been left behind when it comes to economic development in Australia, and excluded from wealth creation opportunities as well as infrastructure, education, and healthcare.

But the area is beginning to grow - with the Indigenous business sector accounting for roughly 0.4-0.6% of Australia's GDP, a contribution in the range of $8.5bn to $12bn, in 2021.

It is now time to centre Indigenous communities in investment decision-making - especially when it comes to decarbonisation projects, the panellist said.

Early movers in Indigenous investing require feasibility capital to facilitate the nation's transition to the clean economy.

Capital deployment is also critical in regions vulnerable to climate impacts including rural communities, Torres Strait Islander communities and the Pacific, Will Leak, Senior Sustainable Investment Analyst at Mercer said at the conference held in Sydney last week.

In order to build trust through representation, there is a need for more Indigenous practitioners in higher level management in the finance sector.

A mature investment ecosystem is necessary to support Indigenous-led initiatives, and embracing discomfort and taking action to address the lack of capital flowing to Indigenous communities is crucial.

"Investment finance professionals that are often stewards of capital, we see that capital put to good use," Brian Wyborn, managing partner at First Australians Capital said.

"We want to see that capital create solutions that derive a benefit and a return for our investors but also works towards getting us to adjust and equitable society."

Also at the conference was a session on First Nations cultural heritage laws and best practice for investors and corporations.