Community Energy Plans: Technical analysis meets community vision

In many communities across the Canadian Arctic, there is a growing interest in reassessing current energy use and transitioning to more reliable, affordable, and cleaner fuel sources. Last week, we explored the broader strategies needed to address energy insecurity in remote communities. This week, we're focusing on the local-level considerations essential for developing a Community Energy Plan (CEP) tailored to support that transition within a specific community. While commonalities exist, it's vital to be as detailed as possible when planning at the community level.

A CEP is a plan that is navigated through a community-led process aimed at evaluating the feasibility of transitioning from diesel fuel, typically used, to renewable energy sources. To effectively chart this path, several key areas require involvement and investigation:

1. Community Vision: The CEP process is driven by community members who set their unique energy goals and priorities. This typically involves extensive community engagement and desktop research to understand the community’s energy baseline. Critical information includes community profiles, governance, environmental management, building efficiency, calculated energy use per household, and more. Beyond the data, it’s essential to contextualize it with community members' perceptions of their energy use, their vision for future use, and their views on important aspects of energy use, such as heating, appliance usage, and growing community infrastructure. Additionally, considering economic and population growth projections that will drive future energy needs is crucial.

2. Current Energy Use Analysis: Any transitional solution must begin with a thorough understanding of current energy use. Analyzing existing generation systems and their usage will ground the analysis and provide a baseline to build to the community's energy vision. This could include data on the nameplate capacities of current generators, their age, operating capacity, peak demand times, and historical and current electricity rates.

3. Technical Review: Transitioning to renewable resources requires a detailed technical review that accounts for multiple variables. These include the types of renewable energies available in the area (such as wind, solar, geothermal, hydropower, hydrokinetic, or bioenergy), technical assessments, and the feasibility of these options for the community. This involves evaluating whether the community has sufficient renewable resources to support their future energy vision, conducting economic analyses—considering both capital expenditures (capex) and operational expenditures (opex)—to determine competitiveness compared to diesel, and assessing limitations and benefits.

4. Ranking and Selecting Energy Options: The final step in a CEP is ranking the energy options to select the preferred transition solutions. This methodology combines community preferences (qualitative) with technical variables (quantitative). Key technical factors to consider include capital cost, levelized cost of energy, ability to meet the entire energy demand, resource availability and variability, job creation potential, environmental impact, construction risk, and overall project risk.

Developing a CEP will guide the decision-making process and help narrow the focus of subsequent efforts. Several organizations, such as Indigenous Clean Energy and Tarquti Energy, are actively supporting northern communities in localized energy transitions and community energy planning. For a comprehensive, community-first energy planning guide, refer to the Arctic Council’s Arctic Community Energy Planning and Implementation Toolkit.

Considerations to Overcome Energy Insecurity in Remote Communities

Energy insecurity in off-grid communities poses significant challenges in many countries, resulting in unaffordability, stunted economic growth, and adverse environmental and health impacts. In Canada, these challenges are particularly pronounced in northern and remote communities, which endure harsh winter conditions. These communities primarily rely on diesel fuel due to its portability and established infrastructure. However, diesel presents several problems, including high costs and intermittent energy supply.

One potential solution is the exploration of renewable energy as a base load power source. However, transitioning to renewables involves careful consideration of several factors:

1. Technical Considerations: For a successful transition, renewable energy sources must be abundant and accessible in the region. For example, solar energy requires consideration of seasonal variations, biomass depends on local availability, and wind energy must be compatible with the area's wind classifications. The chosen technologies must also be resilient to extreme environmental conditions, such as subarctic cold. Logistics are another critical factor, particularly in remote communities that lack all-season roads or coastal access, as construction and maintenance must be carefully planned. Additionally, the performance of the energy systems must be reliable enough to maintain grid stability despite seasonal changes, resource variability, and extreme weather. It's worth noting that diesel may still play a role, though reduced, due to the variability of renewable resources.

2. Independent Power Producers (IPPs) and Utility Support: Enabling a more affordable transition will likely involve provincial and territorial utilities allowing independent producers to generate and sell electricity back to the grid as Independent Power Producers (IPPs). This approach could attract private or community investment, reducing the need for government subsidies. While establishing IPPs has been challenging in some parts of Canada, there is a strong business case for them, especially in high-cost regions like Whale Cove, Nunavut, where energy prices reach $1.29/kWh. The Quilliq Energy Corporation (QEC) in Nunavut, Canada exemplifies how utilities can support renewable energy integration by working with municipal and Inuit-owned organizations to reduce diesel dependency, lower carbon emissions, and foster self-reliance.

3. Community Integration and Collaboration: The QEC’s criteria for private investment emphasize the importance of community involvement and long-term relationships throughout the project's lifecycle. There are various potential impacts to consider, including the effects on the supply chain (as reduced diesel transportation might negatively affect some residents' livelihoods), the need for upskilling to operate and maintain new equipment, and the potential requirement for equity ownership in IPP projects. Additionally, there could be opportunities for lowering rates in areas with high energy costs.

While renewable energy presents a promising alternative to diesel in remote Canadian communities, the transition requires thorough consideration of technical, economic, and social factors to ensure its success.

Quantifying the Price of Overlooking the “S” in ESG

There’s a more direct connection to the challenges related to environmental and governance underperformance and their associated project costs compared to those related to social issues. Social underperformance, which involves a company's (in)ability to manage relationships with communities, Indigenous groups, consumers, employees, suppliers, and more, is less understood and more ambiguous without an obvious direct line to cost.

It’s all ‘fluffy’ right? Wrong.

The late John Ruggie of Harvard University accurately identified "above-ground issues" – those of stakeholder resistance – as the primary cause of project delays and significant cost increases. In fact, 73 percent of all project schedule delays are caused by stakeholder versus technical issues (which technical often receives more attention as a project progresses). He noted that a one-week operational delay for a mature mining operation could cost up to $20-30 million depending on its size and the commodity involved, and that over the past decade, the time to bring oil and gas projects online have doubled.

Social challenges are starting to garner more attention with compounding project examples of delays, cancellations, community grievances, and protests. The best opportunity to address these risks lies at the very front-end conceptual design phase.

Here are some insights that will make any project manager think twice about adding ‘social risk, mitigation and implementation’ as a critical step in project delivery.

1. Social consciousness is making its way through the value chain: Previously, the connection to social consciousness and consumer behavior was tied to a customer’s decision to purchase a product based on an alignment to their values. That purchasing power is growing along the value chain. The genesis of materials for products are getting greater attention – including metals in electronics and vehicles, and plastics production. This is already being felt by raw material producers as their customers are heeding the advice from end-product users. This was evident in the Congolese case against Google, Tesla, and others for human rights infractions in child labour from their cobalt supplier.

2. Multiple ways to assess social costs on projects: Although it may not seem obvious, there are several ways to assess social costs in projects. This is particularly important during project budget and planning phases. This can include projections on deteriorated investor confidence and stock price decline, increased operating costs, lost revenue from a missed production date, remobilization costs in the event of a halt, deviations from construction schedules, among others. In the example of the Dakota Access Pipeline, the outset cost of the project was $3.8B which escalated to $7.5B due mainly to the Stop DAPL protests associated with Standing Rock. This translated into $1.8B in additional operating costs, $.3B to settle protests, and $1.6B in lost market cap.

3. Social unrest escalates costs for taxpayers, too: When conducting our budget and planning cycles, we are often focused on the costs to the company. However, there are externalities to taxpayers for not taking social considerations seriously and mitigating present risks. In incidents of social unrest, taxpayers may cover the costs of additional regulatory stringency and oversight, clean-up, or defraying of protestors with police force.

Overlooking social considerations can lead to profound financial consequences. Thus, prioritizing social risk management is essential for the long-term viability and profitability of any project.

Driven by Community for Community: The new age of community planning

Community infrastructure and program planning is increasingly adopting a community-first approach, where members actively participate in decision-making to achieve the best outcomes. Communities are taking control of their futures, with strong engagement leading the process. Imagine a planning method where history, culture, health, language, well-being, and future aspirations are seamlessly integrated—this is Comprehensive Community Planning (CCP). While more commonly used by First Nations communities, CCP is a valuable tool for addressing key planning areas such as governance, land and resources, health, infrastructure development, culture, social issues, and the economy.

When considering an infrastructure project or a large-scale program, it's important to consider the CCP model, which incorporates these critical planning areas. High engagement in this process can lead to more sustainable outcomes.

1. Engagement is essential: Community input brings new ideas and drives actionable goals, particularly when there is broad ownership of both the process and outcomes. “Community” in this context includes not just leadership but a vertically integrated representation that ensures credibility and inclusivity. It's important to engage a diverse array of participants, including youth, community groups, elders, economic development entities, administration, and business owners. Additionally, communication methods should be tailored to meet the needs of vulnerable groups, ensuring their participation in the process. Methods to increase participation might include community meetings, surveys, newsletters, focus groups, and home visits.

2. The initial visioning process is invaluable: Working with community members to understand their vision for the future sets the foundation for the CCP. Key questions to explore include: “How do you see your community 50 years from now?” “How do you envision development on your land?” “What are the most cherished traditions you want to preserve?”

3. CCP promotes sustainable outcomes: Involving the community throughout the process fosters ownership and commitment to the outcomes, whether it’s an infrastructure project or program delivery. Through CCP, communities can shape their future, prioritize key areas, and create sustainable economic opportunities for their members during both the design and construction phases.

4. Four key phases in the CCP process: There are four key areas to consider when developing a CCP:

Pre-planning: In this phase, the community sets up an execution team, develops a work plan, and begins socializing the engagement process to boost participation.

Planning: This is the most community-focused phase, where the vision and plan are defined, including specific activities and projects along with an implementation strategy. The outcome is a comprehensive CCP.

Implementation: Here, projects are prioritized, and work plans, feasibility studies, environmental approvals, and other necessary steps are taken, leading to the execution of capital projects.

Monitoring and evaluation: It's crucial to revisit the original vision and assess whether the CCP and its associated capital projects are delivering the desired impacts. This phase might involve internal adjustments, such as regular community planning check-ins, continuous alignment of planning with community needs, and appointing a leader to ensure ongoing alignment.

There are many resources available to support a CCP process, including the Government of Canada’s CCP Handbook for First Nations in British Columbia, which provides several examples of successful implementation, and worksheets to deliver this process.

Project Closure: Factors that contribute to smooth(er) community transitions

The adage is true: all good things come to an end. This could include a once-prosperous project that stimulated a local economy, fostering community dependance. As with any resource, the presence of the commodity and the rate of extraction will determine the typical life of a project – ranging from as short as a few years to decades. Considering this, the impact to community can vary significantly but the preplanning for closure at the onset of a project with a lens on community wellbeing is vital. With closure planning often intertwined in the environmental assessment process early in project life, it has the possibility of being disconnected from the reality at the very end.

As your project reaches end-of-life, consider these best practice factors to ensure a well-thought-out community transition:

1. Develop an entire program approach: Closure planning can be particularly sensitive and making sure that one technical area of expertise doesn’t undermine the other will ensure proponents or communities aren’t blindsided or compromised throughout closure activities. In doing so, consider a one-program approach that interconnects six critical areas in closure: social, environmental, regulatory, reclamation, engineering and decommissioning, and legal

2. Consider risks to both project and community: There are two different types of risks to assess. Those to the project (reputation, costs, litigation, technical feasibility, schedule, etc.) and those to the community (loss of livelihood, energy security, community cohesion and physical displacement, etc.). Both need to be addressed and managed for their unique attributes.

3. A strong knowledge base supports strong decisions: When developing a closure strategy for your own budget and planning cycle or as part of a regulatory requirement, good strategy will always depend on the homework done to generate a strong baseline assessment. Prior to any site closure activities, it will be important to understand the socioeconomic baseline of community, regulatory requirements including impacts on Indigenous rights, land ownership, stakeholder identification, sustainable economies, among others.

4. Determining appropriate solutions: Options, options, options. In the closure planning phase, there are multiple community closure options that come with varying costs and levels of effort to implementation. These solutions will hinge on the risks that you’ve identified during your risk review process. Let your creativity flow – it could include sustainable economies for long term community viability after closure, community resettlement including compensation frameworks, or establishing a new socioeconomic engine connected to the activities of closure (waste, demolishing, etc.). Whatever the solution, co-develop it with community.

5. Do closure planning early: Many countries require closure planning as part of the environmental assessment (EA) process. The Impact Assessment Agency of Canada (IAAC), the Environmental Protection Agency in the United States, and the Department of Agriculture, Water and the Environment in Australia to name a few. Through an EA process, project proponents are required to scope key issues, conduct baseline studies with associated impacts and mitigations, develop a detailed closure plan, and engage directly with stakeholders on that plan.

Remember, while all good things come to an end, with thoughtful planning, the end can be just as rewarding as the beginning. So, let's ensure that when one door closes, another opportunity opens, benefiting community and leaving a positive legacy.

Market Drivers: A solution that 'sticks' for social and environmental progress

The market incentivizes better business decisions regarding people and the planet, proving to be more effective than simply doing "the right thing." The reason? It sticks.

In Canada, terms like triple-bottom line, the trilemma, and multidimensional energy transition have become common when discussing company activities related to stakeholders and the environment, including carbon management, gender diversity, and Indigenous investing. While many of these issues are extensively discussed and often mandated by the government or driven by public pressure, there’s an opportunity to shift the narrative and the intent for the better.

Highlighting the market-driven positive business impacts could deepen accountability and firm-up better returns, providing a compelling reason for companies to adopt these practices. This approach would also help the public understand that businesses need to prioritize decisions that benefit their shareholders, with other “right thing to do” benefits often interconnected and flowing naturally.

Let’s explore three areas gaining increasing attention for natural resource companies and their market-driven connections: gender diversity, carbon management, and Indigenous investing.

1. Gender diversity: At the 24th World Petroleum Congress in Calgary last year, BCG published a report titled “Untapped Reserves 3.0: Advancing Diversity, Equity, and Inclusion in the Energy Industry” to assess progress made towards improved female representation within the oil and natural gas sector. Over the past three years, the sector has seen a modest increase in female representation, growing from 22% to 23%. While representation remained idle in the oil and natural gas sector, that same year the World Economic Forum found that companies from a variety of sectors with more diverse management teams experienced 19% higher revenues than those with less diverse management teams. The reason? Diverse management teams balance risk better, leading to stronger business decisions. This undoubtedly presents a strong business case to improve representation while simultaneously strengthening returns.

2. Carbon management: According to S&P Global, GHG intensity of the oil sands has dropped 23% since 2009 and the absolute emissions have stayed stable despite the increase of production since 2021. Why? It’s economically efficient to have lower emissions and drive production. Take for example a reservoir that uses steam-assisted gravity drainage (SAG-D) to extract oil from the reservoir. Over time, producers have improved their extraction processes using less steam (and therefore less natural gas = less cost and less emissions), developed mines without GHG intensity equipment (i.e., upgraders), and are increasing the production of less GHG intensive barrels that are also – for the most part – less capital intensive. The result? A better (less intensive) carbon molecule at a lower cost.

3. Indigenous investment: There are several Indigenous-focused loan guarantee programs in Canada – the program supported by the Alberta Indigenous Opportunities Corporation, the Ontario Aboriginal Loan Guarantee Program, and the more recent Federal Indigenous Loan Guarantee Program. The opportunity for Indigenous communities? A transition mechanism to get to true equity in a project through debt-backed loans. In doing so, the internal rate of return is critically important as communities cannot readily sell the asset and are mostly interested in long term growth and returns for their community. The benefit to a company interested in a partnership? Access to capital and lower cost money to fund capital projects. A win-win.

Focusing on market-driven positive business impacts, companies can foster accountability, improve returns, and achieve sustainable practices that benefit both shareholders and society at large.

Let’s make it stick.

Is Your ESG Materiality Assessment, Material?

“Materiality” has been relevant for the investment community for some time. Items that are ‘material’ are those that an investor may consider important when making an investment decision or those issues that may have an impact on the financial wellbeing of an organization. Over the past decade, sustainability issues have become more material and intertwined with business decisions, including those that are related to environmental, social, and governance (ESG). Conducting an ESG materiality assessment is a productive exercise that can be a simple or complex assessment. The objective of the assessment is to understand your priority issues and manage each accordingly to ensure there’s limited impact to an organization’s business outcomes.

As you are conducting your own materiality assessment (even if it’s a simple one), take note of a few of these pointers:

1. Cater the material issues to your project: There is a line list of items that can be assessed, and their importance will rank differently based on the project, proponent, and stakeholders. Some material outcomes for environmental issues can include GHG emissions, water use, noise, and contamination; for social they can include child labour and workforce rights, Indigenous rights, stakeholder relations, community affordability; and for governance they can include audit procedures, board composition, fraud, corruption, among others. Be thoughtful about the material issues that you assess (many issues may come from feedback provided by the representative samples chosen – see #3).

2. Rank your material issues with two lenses: As you examine all the ESG-related material issues, it will be critical to rank each in relevance to the corporation and relevance to stakeholders. In doing so, a ranking can be done in a spreadsheet with weightings to each or simply on a matrix with ‘importance to stakeholders’ on the Y axis, and ‘importance to business success’ on the X axis, with high, medium, and low rankings.

3. Representative samples are important: While conducting a materiality assessment, advice will be solicited from affected stakeholders (for relevance to stakeholders) and internal corporate representatives (for relevance to the corporation). Ensure that the sample being queried represents a broad swath of the population and the most knowledgeable corporate representatives. One of the most challenging issues facing materiality assessments is a limited internal understanding of the material business issues.

4. Document the assessment process: A materiality assessment is conducted at a point in time. But project impacts change and so do the stakeholders involved. To understand the outcomes of the assessment long term, it is wise to document who contributed, what engagement took place to collect the information, and the date it was undertaken.

5. Take note of double materiality: Sustainability issues have dual impact – those that affect the corporation and the effect of the corporations’ activities on people and the environment. This means that the materiality goes beyond the impact on financial strength and looks at the environmental and social externalities.

The concept of materiality has evolved, encompassing traditional financial considerations alongside sustainability issues. Whether simple or complex, it is crucial to identify and prioritize these issues to mitigate or limit potential impacts on an organization’s business.

A Recipe for Increased Workforce Inclusion

Community readiness for project integration is a critical issue in many respects – whether preparing for an influx of people and quelling challenges created such as housing affordability, childcare, traffic or even noise. Or more positively, getting prepared for opportunities that are part of the suite of benefits coming directly to community members because of a project being ‘next door’. It is common to see project proponents set a target of inclusion in the name of local participation – some as high as 80%. One of the major challenges is that community members aren’t always equipped with the necessary skills to undertake certain project roles. Just like a recipe, there are ingredients that project proponents can use to ensure local, Indigenous, and vulnerable community members are ready for upcoming opportunities at the project site (just as businesses prepare for contracts and procurement opportunities).

Here are a few ideas to bridge the gap and increase local employment from the onset:

1. Pre-employment support is the first step: Co-develop a local skills inventory with municipalities, economic development officers, or community liaisons to understand community interests in potential roles, current skills, and gaps that exist. With this information, the project proponent and community representatives can better co-match these criteria to upcoming roles and close gaps with individualized training plans to increase employability. Closing these gaps can be done with the support of local organizations (see #3 below). As an aside, this information is also valuable when setting inclusion targets that are fact-based and later quantifiable. These local targets are often integrated into community agreements.

2. Examine your corporate culture for inclusion (and the ability to retain): Recruitment is one piece of the puzzle, but most of the important (often forgotten) piece is to create a culture that retains employees. There are several ways to support a more inclusive culture, which include: employee support groups for vulnerable employees, mandatory cultural awareness training for all employees, employee advisory groups, grievance mechanisms, an openness to organize, and mentorship programs, to name a few.

3. Partnership collaborations can multiply your effect: You can’t do it all – and that’s why it’s worthwhile to partner with organizations that specialize in training, education, and government funding to support upskilling the workforce. There are several government-funded programs in Canada that are intended to support local and Indigenous transitions, organize job fairs, and fund continuing education. Teaming with these organizations to formally develop upskilling programs unique to the project site is a win-win!

4. Developing social impact programs that meet community needs: Outcomes from your pre-employment homework will give some indication to the formal social impact programs that will have the greatest return on investment for the project proponent and for interested community members (programs that better suit their needs). These can include preferred hiring, apprenticeship and internship programs, workplace readiness, among others. Remember, hiring local resources can be more cost effective and stable – a win for the bottom line and the community.

Enhancing community employability contributes to the overall success and sustainability of a project, creating a mutually beneficial relationship for community members and project proponents.

Let’s start with the right ingredients and bake a cake that both parties can enjoy.

Community Grievance Mechanisms: The critical release valve

We’d all like to imagine a world where a project will go smoothly, and no stakeholder problems will arise. But that’s hardly the case. Whether a concern about dust, noise, transient workforce – or worse, harassment and violence – a grievance procedure to evaluate and respond to issues will be the critical release value that your project needs. A grievance mechanism is a process that facilitates the management of stakeholders’ concerns, questions and complaints by providing accessible avenues for submission and discussion. It enables issues to be addressed in a consistent, timely, documented, and equitable manner.

Here are a few tips to get an effective grievance mechanism underway:

• Incorporated into international best practice: Grievance mechanisms are required throughout impact assessment international standard processes. For example, Equator Principle 6 is dedicated to effective grievance mechanisms. EP6 indicates that the “mechanisms must be scaled to the risks and impacts of the project and be resolved in a culturally appropriate way, at no cost complainant, and without retribution. The project proponent must inform affected communities about the mechanism and how to access it.”

• Complaints and concerns are different, but both are important: 1) A concern is an issue raised by affected community member, where it has not yet occurred, but has the potential to escalate into a complaint. 2) A complaint is a notification made to the project proponent (or their contractors) about an alleged impact on a stakeholder arising from project activity. These complaints can be environmental, social, or safety related.

• Process is critical: It is common to see a flow diagram that describes the steps that a project proponent will undertake when they receive a complaint or a concern from an affected community member. As you consider your own grievance mechanism, consider these questions:

a) How is the grievance mechanism being advertised to stakeholders and local community members? How can the team ensure that the local community and stakeholders are aware of the mechanism and how to access it?

b) How will questions, concerns and feedback raised during engagements from one-on-one meetings, open houses, newsletters, emails, and other verbal communications be recorded and responded to?

c) How can someone remain anonymous while submitting questions or concerns about the project?

d) How will project proponents relay feedback once a grievance is rectified and closed

• Recording and closing out your grievance is essential: Once a grievance is received through accessible means (feedback forms, online database, emails, toll free number), the project team must log and resolve the grievance. Consider these three questions when closing out the grievance:

a) Do corrective actions need to be undertaken to rectify the complaint or concern?

b) Does a new action plan need to be developed (and perhaps repeated) until a concern and complaint is closed out?

c) Is the issue and remedy recorded in the grievance register?

For additional best practice resources on developing grievance mechanisms aligned with the United Nations Guiding Principles on Business and Human Rights, download ICMM’s report here.

Vulnerable Groups Experience Project Impacts Differently: Are you considering these unique needs?

As projects, programs, or initiatives are created throughout the project lifecycle, particular attention should be given to the assessment of vulnerable groups and the impacts they may experience. Why? The premise is that vulnerable people are more likely to experience project impacts differently – or more severely – than the broader community assessed.

This means that your assessment also needs to be conducted with a unique lens that asks unique questions. In assessing vulnerable groups with an equitable lens, the potential impacts, mitigations, and therefore residual impacts will be fit-for-purpose instead of a pan-community approach that may have unintended consequences for a group that may be uniquely exposed to certain risks. At current time, the (social impact) assessment process considers vulnerable groups in multiple regulatory frameworks and guidance documents including Canada’s Impact Assessment Act and World Bank Standards.

Here are a few tips to ground our thinking in assessing vulnerable populations and making sure their unique needs are considered in project development:

1. Understanding the indicators: There are certain aspects that all project teams should consider when conducting their social impact assessments and defining who vulnerable peoples are and why they are considered vulnerable. People can experience vulnerabilities (and the intersectionality across multiple vulnerabilities) related to poverty; age; race, ethnicity, and religion; sex and gender; physical and mental disabilities; remoteness; and many more.

2. Before assuming, engage on the solution: Throughout the project assessment phase, vulnerable groups may be identified through contextual analysis or demographic data. However, it is critical to engage the identified vulnerable groups (or groups representing their interests) to further understand their needs and develop a fit-for-purpose remedy or mitigation that addresses the issue. Let’s use a simple example: a project is being developed and communication is digital only. However, the primary community in the region is remote, and consultation on the project cannot be done effectively as 60% of the population has no access to internet or it’s of poor quality. All consultation documentation needs to be developed with a lens to equity and distributed in a form that is accessible for the entire community. A simple fix: door-to-door newsletter drops. While assessing vulnerable groups, there are many more complex issues including labour remedies to improve localization benefits, impacts of site closure on reliant communities, and addressing human rights of marginalized groups, to name a few.

3. Integration is a step-by-step process: There are five considerations that support integrated project solutions for vulnerable groups, which include: 1) Collect the information from a broad range of resources. 2) Engage the vulnerable group directly to verify your assumptions. This is often done with a representative group or an NGO. 3) Plan to remove the barriers that persist to ensure the project is being developed equitably. 4) Create the elements that support the integration of vulnerable group remedies into the project design. 5) Monitor and improve on these fit-for-purpose project remedies

4. Monitor, monitor, monitor, and act if needed: It is likely that your project will measure the indicators and progress of vulnerable groups. In some World Bank funded projects, project proponents have hired non-governmental organizations with previous experience working with identified vulnerable groups to develop and assess the mitigation activities, support the grievance mechanisms, and report back to the project proponents on what is working, what is not, and support changes in the initial remedies. The reason: these third-party experts understand these sensitive issues more intimately than a project proponent.

5. Check out public resources to learn more: The Government of Canada’s GBA+ (Gender-based Analysis Plus) analytical tool is a great resource for practitioners interested in learning more about supporting inclusive project and program development. Of note, this tool has been developed for Government of Canada employees, but its application is multifunctional.

When developing a project remember to assess the project for all, not just the majority.

Community Skills Inventory: The beginning of a successful road to inclusive project employment

Project proponents are often required to comply with localization targets set by governments, regulators, or regional precedents. These targets often include employment, training, and procurement goals, defined either as a percentage of revenue, an absolute value, or a broader visionary objective. A critical flaw in many projects is setting these localization metrics without understanding the skills available in community. A community skills inventory can address this issue by supporting realistic and achievable goals, while also laying the groundwork for meeting employment targets, closing gaps, and understanding community socioeconomic aspirations.

Here area few best practice tips to get you started:

1. Establish a baseline: Understanding the community’s socio-economic baseline and interests is crucial. This foundation helps identify tangible opportunities for community participation. Direct community engagement is the most effective method for collecting data, although some information can also be gathered from federal census data (see point 3 for associated challenges). This data will highlight potential gaps, allowing targeted training and capacity-building programs that meet both project and community needs and future goals.

2. There are important variables to understand: When conducting a community skills inventory, several key data sets are essential which include a) Identify economic development officers and in-community training and human resources representatives to ensure that your data is supported by community intelligence, and remains current and accurate. b) understand overall skill baseline and availability including work-appropriate age, education, trades, and experience. c) Understand the challenges or barriers to skills development that may already exist.

3. Common challenges: Establishing a skills inventory can have challenges, including a) Indigenous historical mistrust of government data collection that often excluded Indigenous Peoples. This is compounded by data inconsistences from community-to-community and emphasizes a need for individualized approaches instead of a pan-community approach. b) Historical mistrust also impacts data ownership. Some communities may freely share data, while others prefer confidentiality. Respecting these preferences is crucial.

4. Establish individual worker plans: The collected data is only valuable if applied effectively. Developing individual worker plans can address workforce gaps and meet jurisdictional or corporate targets. These plans, often funded by project proponents or community socioeconomic programs, cater to each interested community member. They typically include baseline information on education and experience, career aspirations, skills gaps, necessary training, and milestone achievements with key timelines

Conducting a thorough community skills inventory is essential for setting realistic and inclusive localization targets for project employment. By establishing a comprehensive baseline, analyzing key data variables, addressing common challenges, and developing individual worker plans, project proponents pave the way for successful and inclusive project employment.

A Dependable Social Risk Framework? These international standards have you covered

When considering social best practices, we often look to in-country regulations to understand what is required with respect to Indigenous recognition and engagement, human rights, livelihood assessment, cultural heritage, among others. That is still a critical step in the process but there is often a gap between socially focused regulatory requirements and standard business practice – and in some jurisdictions the regulatory requirements are too ‘light touch’ to give investors and multinationals the confidence that pertinent risks are considered and managed. Without guidance and direction, it can be challenging to know what variables to consider ensuring all angles are covered.

Financial risk management tools such as the Equator Principles (EPs), International Finance Corporation Performance Standards (IFC PS), World Bank Group EHS Guidelines (EHS), and World Bank Environmental and Social Standards (ESS) are strong frameworks to assess and manage social and environmental project risk – especially if you’re looking for a roadmap. The standards have a purpose: to give financial institutions confidence that projects in which they are investing are being conscious of social and environmental risks throughout project life. These standards examine both the lender’s and borrower’s responsibilities. Absent of a financial requirement, the documents still provide strong guidance for proponents if they are wondering “where do I start and what social (and environmental) risks should I consider?”

These standards have slight similarities and differences:

1. Categorization and risk management: The IFC PS and ESS similarly categorize risks using a mitigation hierarchy. They both identify and evaluate social risks as “beneficial” and “adverse”, and adopt a mitigation hierarchy to avoid, minimize, compensate or offset for the project-developed risk to people and environments. The EP's identify projects as Category A, B, and C based on the magnitude of impact. Category A projects are those that create irreversible impacts, Category B have limited impact and are reversible, and Category C has no adverse impacts. Under the EP's, projects located in industrialized countries (Designated Countries) require compliance with host country regulatory requirements as these are assumed to be more stringent, whereas projects located in non-industrialized countries (Non-Designated Countries) require compliance with IFC PS and EHS guidelines in addition to host country regulatory requirements.

2. The variables assessed are similar: The standards examine similar social (and environmental) variables. Particular to the social variables, these include labour and working conditions; community health, safety, and security; land acquisition and involuntary resettlement; stakeholder engagement; Indigenous Peoples; cultural heritage; and reporting and monitoring for stakeholder engagement and disclosure. The current EP (EP4) requires demonstration of Free, Prior and Informed Consent with Indigenous Peoples, as well as assessment of human rights impacts and climate change risks. Of the three standards, the IFC and ESS standards have the most robust evaluation methodology – especially when developed with a sound Environmental and Social Management System.

3. Check for updates and guidance notes: The standards evolve with risk management expectations from financiers and investors and updates to the standards do occur. In addition, guidance notes are often prepared to support the practitioner’s evaluation of social risks throughout the steps of the required process – these explain the requirements in greater detail. The EP's have been updated more frequently in the past two decades with EP4 released in 2020; the IFC PS are still those published in 2012 but the next iteration of IFC PS are understood to be under development.

For practitioners looking to manage their social risks effectively, these frameworks and guidance documents provide a well-established roadmap that is globally used and built on project fundamentals. This is guidance that you can use with confidence.

Back to Basics: Considerations for a comprehensive Stakeholder Engagement Plan

A Stakeholder Engagement Plan (SEP) is an essential document in project planning. It directs your project team on identifying key stakeholders, recognizing areas of risk and opportunity, implementing mitigations, adhering to regulatory and legal requirements, using communication tools, and scheduling engagements. Here are the critical considerations when developing your own comprehensive stakeholder engagement plan:

1. Connection to the Social Risk Assessment (SRA) mitigations: Developing a SEP without conducting an SRA is like navigating without a compass. A detailed and purpose-driven SEP must be developed with a thorough understanding of stakeholder risks and opportunities. Essentially, the SEP serves as the "how-to" guide to minimize risks and enhance opportunities with your stakeholders.

2. SEP Objectives: Drawing from the IAP2’s Spectrum of Public Participation, the overall objective of the SEP must be clear—whether to inform, consult, involve, collaborate, or empower. Each objective involves different levels of stakeholder participation and varying degrees of effort from project proponents.

3. Understanding applicable laws and regulations: Typically identified in the SRA, it’s crucial that all engagements comply with relevant jurisdictional regulations, laws, and standards. This could include legislative requirements for consultation, alignment with guidelines for project financing such as the International Finance Corporation (IFC) performance standards, or organizational directives aligned with global initiatives such as the United Nations Sustainable Development Goals.

4. Clear understanding of stakeholders and rights-holders: A thorough understanding of both stakeholders and rights-holders is essential, considering two variables: those interested in the project and those impacted by it. By categorizing these groups based on their nature and associated risks, a justified engagement approach can be developed that is catered to each.

5. Tools and methods: Tools and engagement methods should be considered after defining the intended outcomes of the SEP. It’s tempting to jump into tactics, but a well-informed SEP first outlines the objectives and then determines how to achieve them. Tools can include communication mediums, key messages, monitoring mechanisms, grievance procedures, roles and responsibilities, and continuous monitoring.

6. Iterative process: The SEP should be dynamic to accommodate changes in circumstances or project phases. Stakeholders and rights-holders may change, and so may their risk and opportunity ratings. Implementing a regular self-audit—quarterly, biannually, or annually—ensures the SEP remains relevant and effective.

7. Organizational and cultural alignment: The SEP should align with your company culture, protocols, ethics, and procedures. Also, consideration should be given to the time and resources required to deliver and whether your organization has the appetite to take on a 'full-tilt' SEP. There is nothing that stops a SEP faster in its tracks than company misalignment.

By incorporating these elements, a SEP can help to navigate stakeholder risks and leverage opportunities throughout the project lifecycle.

Transitioning from Social Risk to Value: Quantifying the Mindshift

Changing our perspective from "social risk" to "social value” requires more than a change in language; it requires a shift towards recognizing the potential opportunities a project can bring, rather than solely addressing challenges as they arise. Adopting this mindset requires long-term planning spanning decades. While the term "social value" is used across various contexts, my understanding centers on the benefits a project can have on communities when it is developed with broader societal impact in mind.

To effectively harness social value, consider the following four-step approach:

• Community Information Gathering: Begin by understanding the perspectives and needs of the communities you serve. This involves gathering insights on perceptions of the project, economic aspirations, anticipated benefits, and ongoing opportunities and challenges.

• Develop a Social Value Baseline: Before embarking on any project, establish a baseline to gauge your starting point. This quantitative assessment provides the foundation to evaluate the impact of the project’s social value initiatives. Factors such as community demographics, employment levels, skills inventory, health metrics, crime rates, gender equity, Indigenous inclusion, and business capacity assessments are essential considerations.

• Assess Social Value Impact and Outcomes: Use quantitative models to measure the social value generated by various project scenarios. This analysis, often expressed in monetary terms, examines the project's lifecycle, and identifies social value opportunities that the project will bring about. For instance, during construction, emphasis may be placed on using local materials, fostering skills development, and minimizing disruptions such as noise or dust. In operational phases, considerations may include promoting community health, contributing to the local economy, and enhancing productivity in-community. All to be extrapolated into monetary terms for evaluation. While this isn’t always easy, it creates symbiotic language among project teammates focused on cost and schedule.

• Enhance Scenarios to Meet Social Value Objectives: Armed with data, refine project scenarios to align with corporate social value objectives. Project proponents often set targets for social value – some of these include procurement, equity, and workforce inclusion. Use these as your north star to modify the scenarios where needed. This involves going beyond the barebone requirements and creating meaningful, direct, and positive impacts on people and communities.

Embracing social value exceeds traditional project management frameworks. It demands a commitment to understanding and addressing the multifaceted needs of communities, with an unwavering focus on creating lasting societal benefits.

The Carrot: Cumulative effects management through participative, community-led engagement

Picture this: a community sits amid a valuable resource deposit attracting mining companies. Over time, multiple mines and related infrastructure like roads, rails, and power lines emerge, while forestry, agriculture, and other operations are already underway. While each project is evaluated for its individual environmental impact, there's a growing need to consider the bigger picture – the cumulative effects.

Cumulative effects are an outcome of multiple activities taking place where the accumulation of their actions will have a greater impact together than the singular action. In the case of this fictional example, multiple mines with associated infrastructure. Standards and processes to manage cumulative impacts are underway at different levels of attention across international jurisdictions. The International Finance Corporation has a six step Cumulative Impacts Assessment approach, Canada integrates cumulative effects assessment into their Federal Impact Assessment process, and in other regions – like Western Australia – they are not legally required.

While managing the cumulative effects of multiple projects poses several challenges, such as dealing with incomplete pre-project data, navigating uncertainties about future developments, and lack of government cumulative effects management regimes, one critical aspect remains: involving the community in decision-making processes aimed at mitigating these effects. Here are some key considerations to ensure a participatory approach in managing cumulative effects:

1. Shift in Mindset: Transition from assessing individual projects in isolation to viewing them as part of a broader set of activities (past, present, and future) that could compound cumulative impacts in the region. This proactive shift can better prepare project teams for potential cumulative effects assessments, project concerns identified by communities, and regional assessments, or strategic evaluations, thereby instilling more rigor and stability into the process.

2. Identify Valued Ecosystem Components (VECs): Understand the significance of VECs that hold importance to the communities involved. Establishing a baseline for these components within the project area is crucial for assessing their potential impacts and devising appropriate mitigation strategies, from the perspective of communities.

3. Develop a Mindset for Offset Plans in Partnership with Community: Proactively consider developing offset plans that prioritize community-oriented solutions and desired outcomes, moving beyond standard mitigation approaches. These plans could be integrated into the assessment process to ensure that the concerns and priorities of the community are addressed effectively.

4. Open Dialogue on Acceptable Changes: Engage in proactive and two-way discussions with the community to understand and address their concerns regarding cumulative impacts. Establishing an open dialogue allows for the exploration of acceptable changes (i.e., land use planning) and adjustments that can be made to mitigate adverse effects while aligning with community needs and expectations.

Let’s examine two different approaches to articulate the impact of community engagement – be it a stick and a carrot.

First, the stick. In Canada, the 2021 Blueberry River First Nation case serves as a poignant example of the significance of a robust community-participatory process in managing cumulative effects. The case underscored the importance of protecting Indigenous rights amid industrial development, leading to a 6-month suspension of development activities and subsequent renegotiation of regulatory regimes to ensure the preservation of Indigenous rights within the context of cumulative effects.

And, the carrot. In 2019, Indigenous groups, government, and industry worked together to protect 162,000 hectares and establish the Kitaskino Nuwenëné Wildland Provincial Park. This was made possible through significant consultation in 2018-2019 that ultimately led to oilsands mining leases being voluntary relinquished to support this planning effort. Of significant note, almost 98 per cent of the park’s expansion overlaps with caribou habitat and the Ronald Lake Bison herd range – both culturally significant species to Indigenous communities in the area.

This highlights the pivotal role of community engagement in safeguarding the well-being and interests of affected communities in the face of cumulative impacts while supporting project stability and schedule through often uncertain processes.

Community Resettlement: A complex challenge requiring careful navigation

Community resettlement often emerges as a complex challenge that requires careful navigation. Whether it's the expansion of transportation networks, the extraction of natural resources, or the construction of vital utilities like water reservoirs, the need to clear inhabited land may be required. Local regulations and international best practices prioritize the welfare of affected populations to mitigate the adverse socioeconomic impacts that resettlement may entail. Consider these six actions as you approach resettlement:

1. Understand the regulatory and institutional requirements: Navigating community resettlement begins with a deep dive into the legal and institutional frameworks governing such actions. Local regulations, like the Expropriations Act in Canada, provide a foundation, while international standards, notably the International Finance Corporation (IFC) Performance Standard on Environmental and Social Sustainability (PS5), offer comprehensive guidance. These standards not only serve as a benchmark for best practices but also instill confidence in investors regarding the project's commitment to social sustainability.

2. Assess the socioeconomic baseline: Central to any resettlement is the understanding of the socioeconomic baseline of the affected communities. This involves understanding demographic profiles, migration patterns (if applicable), cultural nuances, livelihoods, and access to essential services like healthcare and education. Identifying vulnerable groups and assessing their needs is crucial to develop tailored interventions.

3. Investigate displacement impacts: Resettlement disrupts established livelihoods and social networks. Loss of housing, disruption of access to natural resources (i.e., agriculture, forestry), and the dismantling of community infrastructure (i.e., community cohesion, civil infrastructure – healthcare, water treatment, education) can profoundly affect community life. Acknowledging these impacts and developing strategies to mitigate (or limit) and compensate them is an essential requirement of resettlement regulations and guidance.

4. Determine eligibility for resettlement compensation: A determination of eligible and impacted community members will be required – particularly when discussing compensation and mitigation measures. Some considerations include groups that will be subject to the impacts from displacement, valuation criteria as determined by regulatory and international standards, deadlines for assessing losses, and an evaluation of losses that are project-induced. It will be important to pay attention to the possibility of in-migration.

5. Develop the implementation plan: A robust implementation plan will be the backbone to your resettlement (and compensation) actions. This will include overall process to execute the plan, direct engagement with those affected, and the team to deliver it, to name a few.

6. Continuous improvement through a monitoring protocol: Careful navigation is synonymous with continuous monitoring. Throughout this process, the project proponent will need to track progress and address emerging challenges proactively. Examples of internal mechanisms include regular reporting, delegated accountability, and transparency within project teams. External oversight examples include independent reviews and audits, and grievance mechanisms.

In times that community resettlement is necessary for project development, a careful and thorough approach must be undertaken – requiring a balance between prospective development and social responsibility.

Whose problem is community readiness anyways? It’s a collective issue needing collective action – and housing tops the list!

Community readiness refers to a community being prepared for a proposed project within its jurisdiction. Picture this scenario: a 600-person community, well-equipped for its current residents with transportation, childcare, housing, and a plan for emergency services, offering affordable living and a peaceful, productive environment. However, the landscape is poised for significant change with the arrival of a mega-project adjacent to the community, boasting an influx of employees that will double the community's size at peak operations.

Such large-scale projects offer advantages like job creation, economic growth, increased tax revenue, and often infrastructure enhancements. Yet, they also bring challenges such as strain on local services, housing, affordability, transportation, community infrastructure, and impacts to childcare.

The question arises: Should the project proponent bear some responsibility in alleviating these pressures? The short answer: At least a portion – and usually in collaboration with other project proponents, government, municipalities, and other stakeholders.

Among the list of community readiness challenges, the lack of adequate housing emerges as a prominent concern. This issue can encompass various factors, including high demands for new rental properties, an increased need for affordable housing options, inadequate infrastructure leading to substandard construction and overcrowded dwellings, and the spiraling cost of living caused by escalating home prices, and insufficient city infrastructure (water treatment, wastewater, power, roads) to support expanded housing needs.

Amidst these challenges are opportunities for innovative solutions – ones that project proponents can play a part. Strategies to address the housing crisis can range from closely monitoring local trends to providing rental assistance or covering the costs (guarantee) of unoccupied rentals to support developers access to capital. Additionally, offering low-interest mortgage rates to employees to incentivize home purchases, forging partnerships with multiple communities to distribute the burden of housing demands equitably, and establishing social purpose real estate investment funds to finance not-for-profit housing initiatives are viable avenues to explore.

Other elements that project proponents must consider for community readiness are efficient transportation services, adequate childcare, labour shortages or labour drains on local businesses caused by project employment, health care, and emergency and city services.

It takes a village – and in the case of community readiness, a project proponent and a village.

Local participation: More than a moral imperative, it’s a strategic necessity

In today’s landscape of project execution, fostering opportunities for local and Indigenous business entities is not just a moral imperative but a strategic necessity. A well-crafted Local and Indigenous Contracting and Procurement Plan (LICPP) serves as the cornerstone for maximizing these opportunities, ensuring their leverage, and ultimately, contributing significantly to the successful execution of any project.

At its core, the LICPP is a comprehensive strategy that identifies the necessary approaches and tools to be implemented throughout the project’s lifecycle. Its objectives are clear and ambitious:

1.      Maximizing Opportunities: The LICPP aims to maximize contracting and procurement opportunities with local and Indigenous businesses, vendors, and suppliers. By doing so, it not only bolsters the local economy but also promotes diversity and inclusivity within the project’s supply chain.

2.      Community Alignment: Understanding and aligning local and Indigenous community capacities to labour, materials, equipment, and services are vital aspects of the LICPP. This alignment ensures that the project integrates seamlessly into the fabric of the communities it serves, fostering mutual benefit and cooperation.

3.      Collaborative Partnership: Working collaboratively with communities to identify business and partnership interests is essential for building trust and fostering long-term relationships. These partnerships not only contribute to project success but also enrich the social and economic fabric of the communities involved.

4.      Sustainable Development: Contributing to the sustainable development of host communities is a key pillar of the LICPP. By prioritizing sustainability, projects can leave a positive legacy that extends far beyond their completion, benefiting generations to come.

5.      Meeting Commitments: Fulfilling public and legal contract and procurement commitments with Indigenous and non-Indigenous communities is paramount. The LICPP ensures that opportunities are identified and honored throughout the project’s lifecycle, maintaining transparency and accountability.

6.      Goal-Oriented Commitments: Developing contracting and procurement commitments that are goal-oriented ensures that projects remain focused on achieving tangible outcomes. These commitments serve as benchmarks for success, guiding decision-making and resource allocation.

7.      Community Participation: Increasing the participation of local communities in contract and procurement opportunities is a key priority. By empowering local businesses and entrepreneurs, the LICPP creates a more inclusive and resilient economy.

The implementation of an LICPP involves three crucial phases of support:

1.      Pre-Bid Support: This phase assists local and Indigenous businesses in overcoming barriers before bids are extended to contractors or vendors. By identifying and removing obstacles early on, projects can increase participation and build strong relationships with the surrounding community. Pre-bid support often yields the greatest contribution and return on investment.

2.      Bid Support: Providing assistance to local and Indigenous businesses during the bid evaluation process ensures fairness and transparency without compromising ethical boundaries. This support helps level the playing field, allowing smaller enterprises to compete effectively for contracts and procurement opportunities.

3.      Work Execution Support: After the work has been awarded, local and Indigenous businesses may require support to execute their work effectively. Work execution support typically involves providing on-site assistance and designating a contact person to support these businesses directly, ensuring smooth project delivery and stakeholder satisfaction.

A robust LICPP is not just a blueprint for inclusive procurement practices but a testament to the transformative power of collaboration and partnership. By prioritizing the empowerment of local and Indigenous businesses, projects can unlock untapped potential, drive sustainable growth, and leave a lasting legacy of prosperity for all involved.

Unleashing the power of an effective pre-bid process to amplify local benefits

In the realm of contracting and procurement for local and Indigenous businesses, the pre-bid phase stands as the cornerstone of success. This pivotal stage not only lays the groundwork for smooth project execution but also fosters inclusivity, removes barriers, and strengthens relationships between the project and the surrounding area.

Here are some key considerations to support a successful pre-bid process:

1.       Community and Indigenous Liaisons (CILs): These liaisons play a vital role in building bridges between the project team and local businesses, Chambers of Commerce, and economic development officers. By facilitating ongoing communication, CILs ensure that local and Indigenous businesses are aware of workforce and business opportunities far ahead of the bid phase.

2.       Partnership Models for Small Businesses: Small businesses often face challenges in participating in major projects due to various factors such as resources needed to complete the task, liability insurance, safety statistics, and human resources to name a few. Project proponents can promote a variety of partnership models that level the playing field, making it easier for small businesses to participate and compete effectively – more on this next week.

3.       Opportunity Planning: Outlining upcoming contracts and services early is crucial to ensure that Indigenous and local communities are well-prepared for upcoming opportunities. These opportunities are often categorized in advance based on probability of a local business delivering the contract. The probability assessment varies based on partnerships that may already be underway, current businesses that can support the work, or community interest to incubate a business that delivers the required service. Engaging directly with communities and outlining these opportunities can maximize local involvement and allow for adequate and focused preparation – whether partnerships, ramping up, or incubation.

4.       Local Business Database: Maintained by entities like Chambers of Commerce or economic development officers, a local business database serves as a valuable resource showcasing the capabilities of businesses in the project vicinity. This information helps match project needs with local expertise.

5.       Local and Indigenous Procurement and Contracts Committee: Comprising community members and project team representatives, this committee identifies bid opportunities early on and provides local businesses with the necessary preparation time.

6.       Capability Assessments: Conducted in collaboration Chambers of Commerce or economic development officers, capability assessments help gauge the skills and resources available within the community. This insight aids in identifying participation opportunities and addressing any gaps early.

7.       Community-Friendly Opportunities Website: Traditional company websites can be overwhelming to navigate. Developing a user-friendly website specifically tailored to local businesses provides easy access to up-to-date contract and procurement information, streamlining the process for potential bidders.

By implementing these considerations during the pre-bid process, project proponents can effectively remove barriers and pave the way for mutually beneficial arrangements between projects and the communities they serve.

Partnering for equitable development

When speaking about big projects, the narrative often revolves around big players—the large contractors with extensive resources. Yet, amidst the giants, smaller local and Indigenous businesses frequently find themselves facing challenges to meaningful participation. From project size to competitive processes and resource limitations, the barriers can seem insurmountable. However, the tide is turning, and project proponents can level the playing field, ushering in an era of inclusivity and empowerment.

Here are a few strategies to support and uplift local and Indigenous businesses, enabling them to not just participate but thrive in major projects:

1. Small Business Loans: Establishing a structure for small business loans can be a game-changer. These loans would provide much-needed financial support to local entrepreneurs, whether it’s for launching a new venture or expanding an existing one. By offering low-interest or non-recourse loans, project proponents can mitigate the financial barriers that often deter small businesses from engaging in major projects.

2. Contract Guarantees: Setting procurement expectations of larger contractors through contracting agreements and language is another avenue for driving inclusivity. By mandating conditions that prioritize Indigenous and local businesses, such as mandatory set-asides or pre-qualification requirements, project proponents can ensure a fair and equitable selection process.

3. Equity Arrangements: Equity partnerships offer a mutually beneficial path towards collaboration. By establishing ownership models that involve Indigenous and local communities in project delivery, such as fixed pay or revenue sharing, minority partner (1-49% ownership by community), or majority partner (51%+ ownership by community), stakeholders can foster a sense of ownership and shared responsibility.

4. Capacity Funding Frameworks: Financial support at the early stages of contract and procurement planning relieves the burden of an administratively heavy bidding process. Project proponents can cover expenses related to business meetings, legal fees, and document review, easing the burden on smaller businesses and enabling them to fully participate in the often-strenuous contracting and procurement process.

5. Joint Ventures: Collaboration between small and medium-to-large businesses is key to building capacity and fostering mentorship. Joint ventures provide an avenue for sharing expertise and resources, paving the way for inclusive project delivery and workforce development.

Empowering local and Indigenous businesses isn’t just about meeting diversity quotas—it’s about fostering a more resilient and inclusive economy. By implementing these ideas, project proponents can harness the untapped potential of smaller enterprises, driving innovation, and positive social impact.