Indigenous Peoples, Local Communities and FPIC in TNFD Reporting

Technical status. TNFD General Requirement 6 and Governance C address engagement and human-rights considerations. TNFD’s additional engagement guidance supports application of those disclosures and the LEAP approach; the Recommendations describe additional guidance as suggested rather than compulsory. The guidance points organisations to international rights frameworks, including the UN Declaration on the Rights of Indigenous Peoples and the UN Guiding Principles on Business and Human Rights.

Limitation. This article is educational and not legal or human-rights advice. Identification of Indigenous Peoples, FPIC applicability, confidentiality, cultural heritage, land rights, remedy and benefit sharing require context-specific assessment and, where appropriate, qualified independent expertise.

Nature-related decisions can affect land, water, food systems, livelihoods, cultural heritage, sacred places, community health and access to ecosystem services. Indigenous Peoples and Local Communities may also hold knowledge that is essential to understanding ecological condition, seasonal change, cumulative impacts and the effectiveness of proposed actions.

Treating engagement as a disclosure task at the end of the reporting cycle creates several risks:

material impacts and dependencies may be missed;

the organisation may misunderstand rights or customary use;

priority-location analysis may be technically incomplete;

alternatives may be considered too late;

community knowledge may be extracted or disclosed without permission;

grievances may reveal failures that the report ignores; and

consultation language may be misrepresented as consent.

A credible process begins during scoping and continues through assessment, alternatives, decisions, implementation, monitoring and remedy.

Stakeholders are people or organisations that can affect or be affected by a decision. Rights-holders possess recognised rights that create corresponding duties or responsibilities. Indigenous Peoples may hold collective rights connected to self-determination, lands, territories, resources, culture, decision-making and consent. Local Communities may have customary use, tenure, livelihood and participation rights under national or international frameworks.

The practical consequence is that an organisation should not rely only on a generic stakeholder matrix based on influence and interest. The process should ask:

who holds rights in or around the relevant location;

how those rights are recognised in law, custom or applicable standards;

which representative institutions are legitimate;

who may be differently affected within the community;

whether the activity could affect land, resources, cultural heritage or knowledge;

which engagement and consent standards apply; and

what remedy is available if adverse impacts occur.

TNFD Governance C asks an organisation to describe its human-rights policies and engagement activities, and oversight by the board and management, with respect to Indigenous Peoples, Local Communities, affected and other stakeholders in the assessment of and response to nature-related DIROs.

The TNFD engagement guidance indicates that disclosure should cover matters such as:

commitments and policies relating to responsible business and human rights;

processes for monitoring, managing and remediating adverse human-rights impacts;

the Indigenous Peoples, Local Communities and affected stakeholders engaged, how they were identified and how the description was agreed;

the purpose, timing and methods of engagement;

how FPIC and benefit-sharing processes are addressed where relevant;

results of engagement and how they influence materiality, decisions and responses; and

whether and how senior management and the board are informed.

The organisation should report enough to explain the process and decision influence without exposing confidential information, culturally sensitive knowledge or personal data.

Meaningful engagement is an ongoing, two-way process designed around the people affected. It is not demonstrated merely by the number of meetings held. The design should be appropriate to language, culture, decision-making structures, accessibility, geography and risk.

Core characteristics include:

early timing: before material alternatives are closed;

clear purpose: assessment, decision, monitoring, remedy or benefit-sharing is explicit;

appropriate representation: representative bodies and diverse community members are involved;

sufficient information: potential positive and negative effects, uncertainty and alternatives are explained accessibly;

sufficient time: community decision-making processes are respected;

freedom from coercion: participation is not manipulated through pressure, retaliation or conditional benefits;

two-way influence: the organisation records how views changed the assessment or decision;

continuity: engagement continues through implementation and monitoring; and

remedy: concerns and adverse impacts can be raised and addressed.

The process may require independent facilitators, translators, gender-sensitive methods, separate meetings for different groups, travel support or community-selected advisers. The organisation should not assume that a single public meeting reaches all affected people.

Figure 1. TNFD reporting should distinguish general engagement from context-specific FPIC duties and preserve evidence of process, rights and decision influence.

Free, Prior and Informed Consent is a rights-based process associated particularly with decisions affecting Indigenous Peoples. The UN Declaration on the Rights of Indigenous Peoples refers to FPIC in several contexts, including relocation, legislative or administrative measures and projects affecting lands, territories and resources. National law and other standards may define further triggers.

IFC Performance Standard 7 is one example of a project-finance standard with specified circumstances requiring FPIC, including certain impacts on traditionally owned or customarily used lands and resources, relocation, critical cultural heritage and commercial use of cultural heritage or knowledge. Other lenders, certification systems or company commitments may use different tests.

TNFD reporting does not create one universal FPIC duty. A defensible approach is therefore:

identify potentially affected Indigenous Peoples and rights;

determine the legal, financing, policy and standards basis;

assess whether an FPIC trigger is present;

agree the process with representative institutions and affected communities;

provide information early and in culturally appropriate form;

allow time for community decision-making;

document the agreed process and evidence of agreement or other outcome;

avoid treating absence of objection as consent; and

disclose the basis and limitations without exposing protected information.

FPIC is not simply an extra consultation meeting or a signed attendance sheet. Nor does it necessarily mean that every individual agrees. The process and evidence depend on the applicable framework and community context.

Local and traditional knowledge can improve understanding of species, seasonal water patterns, ecosystem services, cumulative impacts, sacred sites, customary use and historical change. It should not be treated as free data.

The organisation should establish:

who has authority to share the knowledge;

the purpose and permitted use;

whether information can be recorded, mapped or published;

intellectual-property and benefit-sharing considerations;

access controls and retention;

how uncertainty or different knowledge systems are represented; and

how the knowledge influences decisions.

Sensitive locations may need to be generalised or withheld from public reports. The disclosure can explain that protected information informed the assessment without revealing coordinates or details that could cause harm.

A public TNFD report should not identify complainants, reveal sacred or culturally sensitive information, expose vulnerable people, publish disputed land information as settled fact or disclose community knowledge without permission.

A useful confidentiality protocol separates:

public disclosure;

board and management information;

restricted technical evidence;

legally privileged material;

personal data; and

community-controlled information.

The report should be balanced. Confidentiality is not a reason to omit the existence of a material dispute, grievance or limitation. It is a reason to describe the issue at an appropriate level and explain the constraint.

A grievance mechanism is not evidence that engagement is effective. It is one channel for concerns and remedy. The organisation should assess whether it is legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of learning and based on engagement and dialogue.

Nature-related grievance evidence may reveal:

loss of access to land, water or resources;

pollution or health concerns;

cultural-heritage impacts;

livelihood disruption;

retaliation or exclusion from engagement;

failure of mitigation or restoration;

benefit-sharing disputes; or

disagreement about monitoring data.

The reporting process should connect grievances to the DIRO register, materiality decisions, risk management, mitigation actions, targets and board escalation. Remedy may include cessation, restoration, compensation, apology, rehabilitation, process change or other agreed measures. The organisation should not claim remedy merely because a complaint was closed administratively.

Figure 2. Rights, knowledge, engagement, grievance and remedy evidence should feed LEAP, materiality, management actions and governance rather than sit in a separate communications file.

Locate

Use rights, customary-use and community information when mapping business activities and sensitive locations. Avoid relying only on protected-area databases or formal land title.

Evaluate

Engagement can identify dependencies and impacts that operational data misses, including cultural ecosystem services, access, cumulative pressure and differentiated effects.

Assess

Rights and stakeholder evidence should inform severity, likelihood, risk transmission, opportunity design and prioritisation. Engagement does not replace professional ecological or financial assessment; it strengthens the evidence base.

Prepare

Management actions, targets and disclosures should show how engagement changed decisions, what remains unresolved and how monitoring and remedy continue.

Across the four disclosure pillars:

Governance: policies, roles, oversight, information flows and engagement outcomes;

Strategy: effects on business model, value chain, transition plans, priority locations and resilience;

Risk and impact management: identification, assessment, mitigation, grievances and remedy; and

Metrics and targets: engagement coverage, action delivery, grievance outcomes and relevant nature indicators.

Map activities and locations. Include direct operations, value chains and potential cumulative impacts.

Identify rights-holders and affected groups. Use competent, context-sensitive methods and verify representation.

Determine the rights and standards basis. Record law, customary tenure, lender standards, company commitments and FPIC triggers.

Agree the engagement design. Define purpose, timing, methods, language, resources and safeguards.

Protect knowledge and confidentiality. Agree use, access, publication and retention before collecting sensitive information.

Conduct engagement early. Present alternatives, impacts, uncertainty and proposed mitigation before decisions are fixed.

Record decision influence. Trace concerns and knowledge to assessment, alternatives, actions, targets and approvals.

Maintain grievance and remedy channels. Track accessibility, outcomes, recurrence and corrective action.

Report proportionately and safely. Explain process, coverage, results, limitations and governance without causing harm.

Continue monitoring. Engagement is a relationship and management process, not an annual-report event.

A technology company identifies that a mineral used in batteries is sourced through traders from several regions. Its initial TNFD plan relies on supplier questionnaires and certification status. Civil-society information indicates possible impacts on water, customary land use and cultural sites in one sourcing area.

The company does not claim that it has consulted the affected communities directly. It maps the supply chain, commissions an independent rights and environmental assessment, works with suppliers and local experts to identify legitimate representatives, and defines how information and grievances can be shared safely. The company changes supplier requirements, finances traceability and remediation work, and sets a decision rule for continued sourcing.

Its disclosure explains the limitation of trader-level visibility, the engagement process and how findings changed procurement decisions. It does not describe certification as proof of consent or absence of impact. This is an illustrative scenario.

Weak: “We consulted local stakeholders.” Stronger: Identify the groups and rights considered, purpose, timing, methods and decision influence.

Weak: “FPIC was obtained.” Stronger: State the applicable basis, agreed process, representative institutions, evidence and limitations.

Weak: “Traditional knowledge informed our assessment.” Stronger: Explain permission, use, protection, benefit sharing where relevant and how it affected the decision.

Weak: “No significant grievances were received.” Stronger: Describe accessibility, coverage, themes, outcomes, remedy and known limitations.

Weak: “Sensitive information is confidential.” Stronger: Explain the nature of the limitation and governance without publishing protected details.

Calling every participant a stakeholder. Identify rights-holders and the rights basis separately.

Engaging only after the project or sourcing decision. Move engagement into scoping and alternatives.

Treating consultation as consent. Apply the correct FPIC test and evidence the agreed process where applicable.

Using attendance numbers as proof of quality. Assess representation, information, time, influence and safety.

Collecting local knowledge without agreed use. Establish authority, consent, access and benefit-sharing controls.

Publishing sensitive maps or cultural information. Apply community-agreed confidentiality and access restrictions.

Reporting a grievance mechanism without outcomes. Show accessibility, themes, remedy, recurrence and learning.

Using engagement to replace impact assessment. Combine rights-holder evidence with ecological, operational and financial analysis.

Assuming supplier certification covers FPIC. Verify scope, facts, standards and evidence.

Describing unresolved conflict as engagement success. Report disagreement, limitations and next steps honestly.

TNFD Recommendations v1.0

TNFD Guidance on engagement with Indigenous Peoples, Local Communities and affected stakeholders

United Nations Declaration on the Rights of Indigenous Peoples

UN Guiding Principles on Business and Human Rights

IFC Performance Standard 7 - Indigenous Peoples

OECD Guidelines for Multinational Enterprises on Responsible Business Conduct

Review this article if TNFD revises Governance C, General Requirement 6 or engagement guidance; a jurisdiction or lender changes applicable Indigenous Peoples or FPIC requirements; or international rights and due-diligence standards materially change.