Within the United States, Indigenous Peoples are among the most underserved populations as they continue to deal with poverty, poor health care, and lack of access to capital. The largest population of Indigenous Peoples are the American Indian and Alaska Native peoples, who number 9.7 million and comprise 2.9 percent of the U.S. population. Before the arrival of Europeans in North America, hundreds of distinct Indigenous nations thrived, yet by 1900, their population had declined from an estimated several million to under one million by 1900.

Today, American Indians and Alaska Natives face disproportionately higher rates of social and economic hardships than other ethnic groups. They have a shorter life expectancy by up to six years, according to the Indian Health Service. Limited access to health care puts them at heightened risk for an early death from diseases such as diabetes, liver failure, and heart disease.  The suicide rate for youth is 2.5 times that of the national average and the highest among all ethnicities in the U.S. Native Americans and Alaska Natives also are 2.5 times more likely to experience violent crimes than other Americans and twice as likely to experience rape or sexual assault, according to the Association on American Indian Affairs.

In addition, the rate of poverty for U.S. Indigenous Peoples was approximately 27 percent as of 2017, compared with the 15 percent national average, with homeownership rates below 1 percent in 2017, compared with 64 percent among the overall population. Lastly, only 16.8 percent of Native Americans and Alaska Natives over the age of 25 had a bachelor’s or higher degree, compared with 60 percent of the overall population.

Impact investing

Mission-driven investors can support Indigenous Peoples and their communities with impact investing, an intentional investment in securities that seek to make a measurable positive impact on the environment and society, all while aiming to deliver competitive financial returns for investors. Impact investing is distinct from Environmental, Social and Governance (ESG) investing—the integration of material environmental, social, and governance factors into an investment process—in that instead of avoiding harm, it seeks to make a positive impact on society, the environment, or both. These investments could be in agriculture, education, energy efficiency, health care, housing, community development, or other areas in need of advancement such as the United Nations Sustainable Development Goals.

Here are three important reasons why it is so important to support Indigenous Peoples with impact investing in 2024.

1. Renewable energy resources

Within the U.S. there are approximately 326 reservations (land held in trust by the federal government for U.S. Indigenous Peoples), totaling 56 million acres. It is estimated that those lands contain 5 percent of all renewable energy resources, with the potential projects to develop electricity generation from solar, wind, or hydropower resources. According to the National Renewable Energy Lab, the solar energy potential on Indian lands was 17,600 billion Kilowatthours per year in 2004, approximately 4.5 times total U.S. electric generation that year. Harnessing the power of these renewable energy resources not only would be progress toward the global goal of reducing greenhouse gas emissions but also could benefit Indigenous communities economically.

2. Climate concerns

Climate change continues to be one of the greatest ESG concerns for institutional investors. However, the effects of climate change are often disproportionately felt by the most disadvantaged groups, including the very poor among Indigenous Peoples. Those who live on reservations can face climate-related issues such as water contamination and pollution, wildfires, floods, and drought. While in some locations, Native American and Alaska Native communities are responsible for governing their own territories, lack of funding and limited legal and political resources often stand in the way of developing improved preventive measures. Impact investing could provide the funding needed to mitigate climate impacts.

3. Health care

Within many Indigenous cultures, health care may be delivered by a tribal elder, and Western medical providers may be met with skepticism and fear. A recent Harvard University study revealed that Indigenous Peoples have a deep distrust for the mainstream healthcare system—due to previous experiences of discrimination. An unwillingness to seek medical care, particularly for mental health issues, may be a contributor to the higher-than-average rates of depression and suicide within this population, according to research published in the journal Cultural Diversity and Ethnic Minority Psychology. Bringing certified medical care to those communities would greatly increase the quality and length of life for many.

The investments outlined above are a small sampling of how impact investing can support U.S. Indigenous Peoples and stimulate changes that would benefit their communities. By making targeted investments that aim to reduce racial inequities and employing impact investing to generate positive social outcomes, impact investors can support Indigenous Peoples and benefit the country as a whole.

Mindy Frye is institutional portfolio manager, impact investing, at RBC Global Asset Management.