“Box-checking” vs. meaningful stakeholder engagement in the energy and extractives industry

by Hanna Sheridan, MBA ’26

This article was written in response to a class discussion in the EDGE Seminar class at Duke University’s Fuqua School of Business in Fall 2024. This article voices one student’s perspective and does not necessarily represent the views of Duke University.

Over the last decade, the energy and extractives industry has faced an increasingly complex external environment, driven by evolving policy and social risks. For companies, these risks manifest as social, political, and reputational issues that must be managed to preserve value. While these efforts are often framed as “future-proofing,” the reality, in my opinion, falls short. Many companies engage in box-checking exercises aimed at mitigating risk rather than driving meaningful change. An example we discussed in class, Rio Tinto’s destruction of sacred rock shelters in the Juukan Gorge in the Pilbara region of Western Australia, is one particularly notorious failure of a company to demonstrate sensitivity to stakeholder considerations. This case highlights the need for more substantive engagement with stakeholders and local communities, particularly Indigenous communities.

A long history of neglecting Indigenous concerns in development projects

Indigenous Peoples, who make up only about 6.2% of the world’s population[1], are responsible for stewarding roughly a quarter of the Earth’s terrestrial surface[2]. However, studies show that Indigenous communities are involved in at least 34% of documented environmental conflicts over extractive and industrial projects[3]. Indigenous communities often find themselves on the front lines of industrial-extractive expansion, defending their land and livelihoods from projects that prioritize corporate interests.

My own community, the Seneca Nation, has experienced the long-term impacts of infrastructure projects. In the 1960s, the U.S. government forcibly relocated hundreds of Seneca families to construct the Kinzua Dam, intended to prevent flooding in Pittsburgh. Despite multiple alternative sites being available and promises made by President Kennedy to the Seneca Nation, the “easier path” involved displacing a Native community, violating the Treaty of Canandaigua in the process. The project flooded over 10,000 acres of Seneca territory, devastating our land and culture. To this day, many elders recall the painful memories of homes burning, exhumed graves, and a future lost to the floodwaters. This story, as we commemorate the 60th anniversary of the dam’s construction, is my own powerful reminder of the complicated and often exploitative relationship between Native communities and industrial development.

Rio Tinto’s 2020 destruction of sacred sites in the Juukan Gorge serves as another example of a company engaging with Indigenous stakeholders without making meaningful decisions that reflect those consultations. Despite working with the Puutu Kunti Kurrama and Pinikura peoples, Rio Tinto ultimately prioritized short-term economic gain over the protection of sacred Indigenous sites. This was a decision that could have easily been avoided but underscores the broader issue of power imbalances between large corporations and marginalized communities.

In both the Kinzua Dam and Juukan Gorge cases, even if the right people were consulted, the outcomes would likely have been the same. The industry’s approach often lacks true accountability and genuine respect for the rights of Indigenous and marginalized communities. The current system tends to favor corporate interests, often leading to destructive and irreversible consequences for those most affected by these projects.

Companies must foster genuine collaboration with communities

As the energy industry progresses, it is critical that future leaders do more to understand the intersection of social, political, reputational, and environmental risks. To effectively tackle the challenges of the energy transition, companies must shift from box-checking compliance to creating real partnerships with Indigenous and marginalized communities. Engaging stakeholders as a mere formality is no longer enough. Companies must foster genuine collaboration where the voices of those impacted are not only heard but acted upon.

Co-developing projects with these communities, incorporating traditional knowledge into environmental impact assessments, and ensuring long-term benefits for local populations can make a significant difference. My former company, Seneca Environmental, embodied this approach. As a tribally owned renewable energy developer, our business model centered on working closely with local communities, offering them equity in projects, and ensuring they were not just stakeholders but beneficiaries. This model went beyond token consultation, helping build true economic resilience for Native communities impacted by energy projects.

The Clean Energy Buyers Association (CEBA) is also working toward a new set of standards that hold energy companies accountable for their community impacts. I had the privilege of serving on a steering committee within CEBA to advance this initiative. The focus is on creating more transparent, equitable, and sustainable practices. Accountability and transparency must be at the forefront of energy companies’ efforts. Issuing reports and conducting consultations are only the first steps. True progress occurs when companies follow through on their commitments, demonstrating tangible results that benefit all stakeholders, especially those whose land and livelihoods are most affected.

Despite these positive developments, much work remains. Companies are improving their ability to anticipate risks by calculating the value at stake early in a project’s lifecycle. By factoring potential social, environmental, and reputational risks into their project designs and resourcing plans, they are better positioned to make informed decisions and mitigate negative impacts before they materialize. This proactive approach to risk management represents a step toward more responsible project oversight in the energy and extractives industry. However, the gap between mitigating risk and achieving real change is still significant.

Examples like Rio Tinto’s failure in Juukan Gorge demonstrate that even when companies involve the right stakeholders, the outcomes often remain the same because the system prioritizes corporate interests over meaningful change. If the energy transition is to be just and sustainable for everyone, future leaders must go beyond managing risks. They must work to foster real, lasting partnerships with Indigenous and marginalized communities. Only then can we ensure that the benefits of the energy transition are shared equitably and that the mistakes of the past are not repeated.

[1] International Labour Organization (ILO), Implementing the ILO Indigenous and Tribal Peoples Convention No. 169: Towards an Inclusive, Sustainable and Just Future (International Labour Organization, 2019).

[2] S. T. Garnett, N. D. Burgess, J. E. Fa, Á. Fernández-Llamazares, Z. Molnár, C. J. Robinson, J. E. M. Watson, K. K. Zander, B. Austin, E. S. Brondizio, N. F. Collier, T. Duncan, E. Ellis, H. Geyle, M. V. Jackson, H. Jonas, P. Malmer, B. McGowan, A. Sivongxay, I. Leiper, A spatial overview of the global importance of Indigenous lands for conservation. Nat. Sustain. 1, 369–374 (2018).

[3] J. R. Owen, D. Kemp, J. Harris, A. M. Lechner, É. Lèbre, Fast track to failure? Energy transition minerals and the future of consultation and consent. Energy Res. Soc. Sci. 89, 102665 (2022).

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