WHEREAS: The UN Declaration on the Rights of Indigenous Peoples and International Labour Organization Convention 169 concerning Indigenous and Tribal Peoples in Independent Countries are internationally-recognized standards for Indigenous Peoples’ rights.1 Violation of these rights presents risks for Wells Fargo that can adversely affect shareholder value, including reputational damage, project disruptions, litigation, and civil and criminal liability.2 Wells Fargo has a history of financing projects and companies that violate Indigenous rights, most notably as a lead financier of the Dakota Access pipeline in 2016, which resulted in two cities withdrawing $2 billion in assets from the bank.3 Several years later, Wells Fargo provided over $3.86 billion in financing to Enbridge, enabling the widely opposed Enbridge Line 3 and Line 5 tar sands pipeline reroutes.4
Enbridge Line 3’s construction and operation violates numerous Indigenous rights, including the rights to free, prior, and informed consent (FPIC); health; culture; religion; security; and assembly.5 Similarly, Indigenous leaders from the Great Lakes tribes have called Enbridge’s Line 5 project “an act of cultural genocide.”6 A 2022 ruling found that Line 5 was operating illegally on Bad River Band territory since 20137 Michigan Governor Whitmer canceled Enbridge’s certification in 2020, citing “Enbridge’s historic failures and current non-compliance” as jeopardizing the safety of Michigan residents and the environment.8 Significant material social risks have already materialized for Enbridge and its financiers through litigation, ongoing opposition led by Indigenous Peoples, allegations of civil rights abuses, investigations into treaty violations, and environmental damages.9
Investor expectations on this issue are increasing, as institutions develop screens against companies with a pattern of violating Indigenous rights.10 BlackRock’s 2021 Investment Stewardship Statement included an expectation for companies to respect FPIC in business decisions that impact Indigenous Peoples.11 Wells Fargo's Indigenous Peoples Statement is misaligned with international human rights standards for FPIC and is limited to project financing. Similarly, the Equator Principles Wells Fargo adheres to have been described by Indigenous experts as “critically weak” and limited in scope.12 Wells Fargo’s recent Native investment initiative13 does not shield the company from material risk connected to insufficient due diligence on Indigenous rights. Effective policies that protect Indigenous rights are critical to meeting Wells Fargo’s own commitments and mitigating material risk to shareholders.