New Biodiversity and Indigenous Protection Risks in Chile

Thematic Report
MSCI ESG Research LLC
New Biodiversity and

Indigenous Protection
Risks in Chile
This report assesses which companies face the most direct
exposure to regions where new operational risks may arise due
to biodiversity and indigenous protections in Chile.
Samuel Block, Gabriela de la Serna, Mark Jwaideh

November 2022
With Contributions by Drashti Shah
November 2022
NEW BIODIVERSITY AND INDIGENOUS PROTECTION RISKS IN CHILE | NOVEMBER
2022
Executive summary 3
Contents
Introduction 4
Industries exposed to change 5
Company controversies in Chile 7
Assets exposed to high conservation value (HCV) biodiversity in Chile 8
Assets exposed to indigenous lands in Chile 9
Company exposures to HCV biodiversity and indigenous areas and
performance in environmental management and community relations 100
Biodiversity impact risks 11
Community relations of mining companies in indigenous areas 12
Appendix A: Background 14
Biodiversity in Chile 14
The protests 14
The Chilean constitution 14
Indigenous populations in Chile 15
The constitutional draft rejected by Sept 4, 2022 vote 16
Environment: 16
Indigenous rights 166
Appendix B: Further company environmental performance in Chile 17
Minimizing disturbances reliant on environmental performance 17
Water performance 18
Appendix C: Assets in Chile 19
Appendix D: Risk-layer data sources 20
Biodiversity 20
Indigenous areas 21
Appendix E: Data used for this report 22
© 2022 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document. MSCI.COM | PAGE 2 OF 24
2022
Executive summary
At a time of political uncertainty, Chile has faced calls to offer better protections for
biodiversity and indigenous populations. This report aims to identify the companies
with the most direct exposure to biodiversity sensitive regions and indigenous lands
in Chile where new operational risks may arise.
We found that the utilities and materials sectors may face the highest risks from
added protections for biodiversity and indigenous populations, which could constrain
their licenses to operate. Both sectors tend to have significant impact intensities,
high exposure to high conservation value (HCV) biodiversity and areas of indigenous
interests, and a controversial history relative to these issues in the country.
Key findings
 Based on an analysis of assets in Chile owned by constituents of the MSCI ACWI
Investable Market Index (IMI), we found that 22% of the assets were in HCV
biodiversity and/or in indigenous areas.1
 Utilities and materials-sector represented 87% of the environmental or human
rights controversies in Chile among constituents of the MSCI ACWI IMI since
2012 (as of Aug. 17, 2022). The two sectors also had the most assets in HCV
biodiversity and indigenous areas, most of which were electric utilities or mines.
 The electric utilities sub-industry had the highest number of assets in HCV
biodiversity areas. The critical ecosystems where these assets were located had
on average a lower Mean Species Abundance (MSA) – a measure of intactness –
than the global average. These diminished but important HCV areas may be a
priority in conservation efforts.
 The ecology around mines tended to be highly intact but also often in the fragile,
arid north of the country. Conservation efforts also may target these pristine
areas, yet mining companies on average had lower environmental performance
than other industries in the country. 2
 Mining companies such as Antofagasta PLC, Albemarle, SQM, and Lundin may
be the most exposed to key HCV biodiversity and indigenous areas among
constituents of the MSCI ACWI IMI (as of Aug. 17, 2022). Among non-mining
companies, CMPC had one of the highest estimated exposures to indigenous
areas in Chile and lagged its peers in environmental performance among non-
mining Chilean domiciled companies (as of Aug. 17, 2022).
1
We termed as “High Conservation Value (HCV) Biodiversity Areas” those areas identified by: the 1) Global
Safety Net (GSN) or 2) Global Biodiversity Model for Policy Support (GLOBIO) Sharing the Planet (SP). We based
“indigenous areas” on CONADI indicators to identify: 1) indigenous designated zones, 2) disputed expansion
territories, 3) indigenous communities (plus a 1.5km buffer zone) and CEPAL 4) municipalities with more than
49% indigenous populations (See Exhibit 2 and Appendix D for more details).
2
Based on MSCI ESG Ratings Environmental Pillar Scores, as of Aug. 17, 2022
2022
Introduction
Chile, with more than 6,000 kilometers of coastline, high mountains, arid deserts and
lush pastures, is blessed with varied biodiversity and cultures. Its abundant natural
resources have made it the world’s largest producer of copper and second largest
producer of lithium — two key metals for clean technologies such as electric vehicles.3
However, widespread social protests in 2019 demonstrated frustrations among the
Chilean people (see Appendix A for background). Seizing the opportunity to push for
their rights, many indigenous peoples of Chile were involved in these protests to fight
against alleged long-term discrimination and exploitation of the natural resources
where they live such as environmental “sacrifice zones” and forestry operations that
have clashed with indigenous populations.4
Voters in Chile had overwhelmingly voted to rewrite their constitution in October
2020, but two years later rejected a proposed draft that would have offered vast new
protections to indigenous communities and nature .5 Nevertheless, future
developments to address social injustices against indigenous communities and
diminished ecosystems may be likely to continue.6 For instance, the law to create the
“Service of Biodiversity and Protected Areas" (Servicio de Biodiversidad y Areas
Protegidas or SBAP) has been approved albeit pending a formal ratification.7 Future
commitments that may come out of Chile’s participation in the UN Biodiversity
Conference (COP15) in December 2022 or the country’s commitment to the High
Ambition Coalition with a goal to protect 30% of land and ocean for conservation
may further strengthen the country’s stance on biodiversity protections.8 However,
new protections may also pose new operational risks to companies that create or
threaten to create negative impacts in regions with direct exposure to sensitive
regions.
3
Based on 2021 mine production. Chile produced 27% and 26% of world mined copper and lithium in 2021,
respectively. U.S. Geological Survey (USGS): National Minerals Information System. Aug. 8, 2022.
4
Thomson, E. “Amid fire and clashes, Chile’s Mapuche see road to reparations.” Bloomberg. Oct 15, 2020.
McGinn, M. “For years, Chile exploited its environment to grow. Now its trying to save it.” Popular Science. Sep
19, 2022
5
Buschschluter, V. “Chlie constitution: Voters overwhelmingly reject radical change.” BBC Sept 5, 2022. Surma,
K. “Chilean voters reject new constitution that would have provided groundbreaking protections for the rights of
nature.” Inside Climate News. Sept 4, 2022.
6
Around half of land-based species are considered Vulnerable (38.6%), Endangered (4.7%) or Critically
Endangered (6.3%). Biofin Chile – 2017”. United Nations Development Program. 2017
7
Carrasco, E., Benitez, R., Sas, A., Toresano, C. “Environmental Law 2021: Chile Trends and Developments.”
Chambers and Partners. Nov 30, 2021
8
High Ambition Coalition, as of Oct 25, 2022. “COP15: Countries call for support of 30x30 and leaders endorse
indigenous rights but finance commitments fall short.” Campaign for Nature. Oct 13, 2021
2022
Industries exposed to change

Tougher environmental laws may challenge companies’ licenses to operate,
especially when it comes to assets in indigenous territories without the companies’
support or where they pose risks to biodiversity conservation goals.
Using the MSCI Asset Location Database (ALD) and vendor data, we identified 549
assets in Chile owned by 163 constituents of the MSCI ACWI IMI (as of July 26,
2022).9 To identify companies most at risk of stricter regulations, we looked at
company asset exposures to both biodiversity and/or indigenous peoples.
We found that 22% of these assets were found in areas flagged for biodiversity HCV
and/or in areas with potential future control by indigenous populations. A further
24% of assets were located within ecosystems above the global average of MSA, a
measure of intactness, and which therefore may also be targeted for protections.10
Together these areas represented that 46% of assets identified in the country could
face new hurdles in their licenses to operate, either for biodiversity and/or indigenous
community protection.
Exhibit 1. Proportion of Chilean assets in HCV biodiversity and indigenous areas
owned by constituents of MSCI ACWI IMI as of Aug. 17, 2022
Notes: HCV Biodiversity Areas we based on the areas identified by: the 1) Global Safety Net (GSN):
Regions needed to be protected to ensure biodiversity resilience from climate change or 2) Global
Biodiversity Model for Policy Support (GLOBIO) Sharing the Planet (SP): Regions where human
activities are reliant on ecosystem services.
Indigenous Areas we based on CONADI indicators to identify: 1) indigenous designated zones, 2)
disputed expansion territories, 3) indigenous communities (plus a 1.5km buffer zone)and CEPAL 4)
municipalities with more than 49% indigenous populations. 11 (See Appendix D for more details)
Source: MSCI ESG Research LLC, S&P Global Market Intelligence, GSN, GLOBIO, CEPAL, CONADI
9
This analysis excluded low impact assets such as offices, residential buildings, and healthcare facilities
10
MSA ranges from 0 (= no original species) to 1 (fully intact ecosystem). The global area-weighted mean for
2015 was 0.56 for the 2,850 constituents of MSCI ACWI Index as of April 12, 2022. Besides critical areas, intact
ecosystems may be targeted for protection.
11
Sistema Integrado de Información CONADI. n.d. “653274 - Mapa General” Accessed Aug. 20, 2022. NU.
CEPAL. “Los pueblos indígenas de América Latina – Abya Yala y la Agenda 2030 para el Desarrollo Sostenible”.
CEPAL, June 2020.
2022
Exhibit 2. Chilean assets exposed to HCV biodiversity and indigenous areas
Source: MSCI ESG Research, S&P Global Market Intelligence, GSN, GLOBIO, CEPAL, CONADI, as of
Aug. 17, 2022
2022
Company controversies in Chile

Potential restrictions introduced by new laws may be most severe for controversial
operations. The utilities and materials sectors have by far had the most
controversies in Chile since 2011, according to the MSCI ESG Controversies
database (see Exhibit 3). This is true overall and for environmental and human rights-
related controversies.
Many of these controversies related to the construction of hydroelectric dams, such
as the since-rejected HidroAysen megaproject by an Enel subsidiary and Colbun, as
well as impacts from mining operations such as alleged high water use in lithium
extraction by SQM and Albemarle.12 Most of these controversies have concluded,
according to MSCI ESG Controversies methodology, but may still cause longstanding
mistrust by locals.
Exhibit 3. Materials and utilities sectors were most exposed to controversies in Chile
over the past decade, including environmental (E) and human rights (HR)-related
controversies
Note: “Archived” controversies were those concluded since 2012. Both Archived and “Concluded”
controversies may contribute to legacy turmoil with local communities.
Source: MSCI ESG Research as of Aug. 17, 2022
12
Todd C. Frankel and Peter Whoriskey. “Tossed Aside in the ‘White Gold’ Rush.” The Washington Post, Dec 19,
2016.
2022
Assets exposed to HCV biodiversity in Chile

Utilities and materials sectors were the most exposed to places with important
ecosystem services (HCV biodiversity) in Chile (see Exhibit 2 and 4 and Appendix D).
The risk that conservation efforts may impact operations in Chile may be highest for
the electric utilities industry. Not only did it have the most assets in HCV biodiversity
areas, but the local ecosystems around these operations were highly diminished, as
indicated by their low MSA. MSAs below 0.56 were under the global average in 2015,
and conservation efforts may focus most on protecting the last vestiges of HCV
ecosystems. 13
Exhibit 4. Industry assets exposed to HCV biodiversity areas
Source: MSCI ESG Research, S&P Global Market Intelligence, GSN, GLOBIO, as of Aug. 17, 2022.
Exhibit 5. HCV biodiversity and MSA of Chile and company assets there
For presentation purposes, the map was turned from the traditional North-South orientation
Source: MSCI ESG Research, S&P Global Market Intelligence, GSN, GLOBIO, as of Aug. 17, 2022
13 MSCI ESG Research; Schipper, Aafke et al. “Projecting Terrestrial Biodiversity Intactness with GLOBIO 4.”
PBL, Nov. 3, 2019.
2022
Assets exposed to indigenous lands in Chile

Assets belonging to the materials and utilities sectors represented the majority (66%)
of assets in indigenous areas (see Exhibit 2 and 6 and Appendix D). Mining was the
most common type of these assets, but power-generating assets were also
common, including seven hydropower plants such as ENEL’s Ralco Hydroelectric
Dam, which has faced opposition by indigenous communities in the past.
Exhibit 6. Industry assets exposed to indigenous areas
Source: MSCI ESG Research, S&P Global Market Intelligence, CEPAL, CONADI, as of Aug. 17, 2022.
Exhibit 7. Indigenous areas of Chile and company assets there
For presentation purposes, the map was turned from the traditional North-South orientation
2022
Company exposures to HCV biodiversity and

indigenous areas and performance in environmental
management and community relations
As the potential for restrictions in these indigenous and biodiversity areas grows,
some companies may find that these restrictions could become a limiting factor to
the operations of certain assets. Based on a simple calculation of the proportion of
company asset value in Chile (from the 2021 geographic exposure data used in MSCI
ESG Ratings) and the proportion of each company’s Chilean assets in HCV
biodiversity and indigenous areas (see Exhibits 2 and 3), we found that Antofagasta
PLC, Albemarle, SQM and Lundin Mining may have some of the highest exposures to
these high-risk regions among all constituents of the MSCI ACWI IMI (see Exhibit
8).14
Exhibit 8. Estimated company assets in high-risk indigenous or biodiversity areas
Our estimate of company assets exposed to high-risk biodiversity and indigenous areas was based
on the proportion of company assets in Chile (from the 2021 geographic exposure data used in
MSCI ESG Ratings) and the proportion of each company’s Chilean assets in HCV biodiversity (GSN
and GLOBIO SP) and indigenous areas (CONADI and CEPAL), as defined in Exhibit 2 and Appendix
D.
Source: MSCI ESG Research, S&P Global Market Intelligence, GSN, GLOBIO, CEPAL, CONADI, as of
Aug. 17, 2022.
14
As of July 21, 2022.
2022
Biodiversity impact risks

Among the companies with assets in Chilean regions with an average MSA above the
global average of 0.56, 85% were mining companies. This is largely due to the nature
of mining companies, which often operate in remote, otherwise undeveloped regions.
The mining companies also tended to have lower environmental performance scores,
according to MSCI ESG Ratings assessments.15
Exhibit 9. Environmental performance and average MSA of companies in Chile
The size of the bubble is based on the number of assets a company has in Chile. Companies
highlighted in orange are Chilean domiciled companies. The red box in the lower right corner
represents those companies with weak environmental performance but high MSA exposure on
average in Chile.
The Environmental Performance Score reflects the assessment of companies’ overall
environmental pillar performance, not just their performance in Chile. The scores are based on the
particular combination of environmental key issues most likely to have potential financial impact by
company. The scores range from 0 (worst) to 10 (best). There are 13 potential environmental key
issues, with Carbon Emissions, Toxic Emissions & Waste, Opportunities in Clean Tech and Water
Stress being the most common across industries in 2022.
Source: MSCI ESG Research, S&P Global Market Intelligence, GSN, GLOBIO, as of Aug. 17, 2022.
15
Four key environmental issues are typically included in the environmental pillar performance score of mining
companies: Carbon Emissions, Water Stress, Toxic Emissions & Waste and Biodiversity & Land Use.
2022
Community relations of mining companies in indigenous areas

Without local support, company assets’ licenses to operate may be at risk. In theory,
protection of HCV areas and human rights along with providing economic benefits to
local communities may help projects and investments succeed. However, this has
not always been the case.
To evaluate companies on community relations management, MSCI ESG Ratings
considers policies and practices by assessing three main actions:
1) Minimize damage: Companies can often best minimize negative impacts to
surrounding communities by avoiding sensitive or protected lands and ensuring
that the principle of Free, Prior and Informed Consent (FPIC) is met in spirit and
through official channels.
2) Protect human rights: Adverse impacts on local communities may lead to
confrontations and allegations of human rights violations.
3) Provide local benefit: Shared benefits such as local hiring and procurement or
the building of local schools or hospitals may counterbalance disruptive impacts,
to a certain extent.
Community relations performance differs widely among the mining companies with
assets in indigenous areas.
 Both Nittetsu and Southern Copper Corp. (SCC) have projects identified to
be in indigenous areas but appear weak overall relative to peers in
community relations management.
 Teck Resources has the most assets among the mining companies in
indigenous areas. Its Quebrada Blanca mine, as well as its developing
NuevaUnión (joint venture with Newmont), are in regions where indigenous
populations are the majority. Overall, we estimate that 25% of Teck’s
operational value (a calculation we based on both mineral reserves and
production) was located in Chile. The company has demonstrated best
practices in community relations management, but has faced a severe
controversy for alleged pollution that adversely affected Native Americans in
the U.S.
2022
Exhibit 10. Community relations performance of mining assets in indigenous areas
The Community Relations Key Issue is designed to evaluate companies on the risk of stakeholder
opposition. It assesses local community relations, policies on conflict and human rights and efforts
to distribute benefits to local communities. See the MSCI ESG Ratings Methodology document for
more details.
Only constituents of the MSCI ACWI IMI in metals and mining sub-GICS industries with assets
identified in Chile were included in the chart above.16
16
As of Aug. 17, 2022
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Appendix A: Background
Biodiversity in Chile
Surrounded by ocean and mountains, Chile has a varied climate and landscape. As a
land of hot deserts, cold steppes, temperate rainforests, valleys and mountains, it
has sprouted several distinct ecosystems. Chile possesses some 30,000 species of
fauna and flora. Around a quarter of all species found in the country are endemic and
around 65% of the amphibians, 63% of reptiles and 50% of vascular plants found in
the country are endemic to Chile.17
The northern part of the country houses the Atacama Desert, while the south-central
region is considered one of 34 global biodiversity hotspots, with rich but threatened
ecosystems — 60% of Chile’s vascular plants are located in central Chile. In total, 127
terrestrial ecosystems have been identified in Chile and a broader categorization of
30 terrestrial ecosystems has been identified in line with global conservation
targets.18
The protests
In October 2019, a proposed subway-fare increase of less than 4% led to social
unrest driven by high inequality and rising living costs in Chile.19 Many took to the
streets to demand a societal transformation. Other systemic issues, such as
historical injustices and growing recognition of environmental degradation, further
supported the movement, and nationwide protests launched the country toward
political change.20
The current Chilean constitution

In October 2020, about a year after the protests began, a national vote held on
whether to draft a new constitution received almost 80% support.21 Chile’s current
constitution was written in 1980 by people selected by then-military ruler, Augusto
Pinochet.22 The economic reforms instituted in the Pinochet era helped to reduce
poverty rates by over half in the country, but even as the nation became one of the
17
Finot, Victor L., Marticorena, Alicia, Rodríguez, Roberto and Muñoz, Romina G. 2017. “Endemic Species of the
Family Poaceae in Chile: Taxonomy, Distribution, and Conservation. Grasses Benefits, Diversities and Functional
Roles.” IntechOpen 63 - 86.
18
Pliscoff, Patricio, and Taryn Fuentes-Castillo. 2011. "Representativeness of Terrestrial Ecosystems in Chile's
Protected Area System." Environmental Conservation 38.3: 303-311. Martínez-Tilleria, Karina, Núñez-Ávila,
Mariela, León, Carolina A. et al. 2017. “A Framework for the Classification Chilean Terrestrial Ecosystems as a
Tool for Achieving Global Conservation Targets.” Biodivers Conserv 26, 2857 - 2876.
19
Bremmer, Ian. “Chile’s Protests Reflect our Unequal Times.” Time. Oct. 24, 2019; McGowan, Charis. “Chile
Protests: What Prompted the Unrest?” Al Jazeera. Oct. 30, 2019.
20
Wright, Robin. “The Story of 2019: Protests in Every Corner of the Globe.” The New Yorker. Dec. 30, 2019.
21
"Boric Says Chile Should Draft New Constitution If Current Proposal Fails." Reuters. July 15, 2022.
22
Sengupta, Somini. 2021. “Chile Writes a New Constitution, Confronting Climate Change Head On.” The New
York Times. Dec. 28, 2021.
2022
richest in South America, it became one of the most unequal among developed
markets.23
Indigenous populations in Chile

Indigenous peoples in Chile have a higher rate of living in poverty than the rest of the
population – the poorest region in the country, Araucanía, has a large concentration
of indigenous peoples.24 There are 10 different indigenous groups in Chile and
around 13% of the country’s population self-identifies as indigenous.25 The Mapuche,
the largest indigenous group with ancestral lands in Araucanía in the south-central
part of the country, had largely resisted conquests by Spanish conquistadors and
enjoyed relative independence until the 1880s, when the Chilean central government
took control of central and southern Chile.26
When Pinochet was in power, he instituted policies that allegedly pushed traditional
Mapuche lands into the hands of business elites, which inflamed tensions between
the indigenous populations and the Chilean central government.27 Violence had at
times boiled over. Allegedly, Mapuche-affiliated armed groups have attacked logging
operations, often contractors of the two major Chilean forestry companies,
Empresas CMPC and Arauco (a subsidiary of Empresas Copec).28
Some reforms have taken place, such as the country’s adoption of International
Labour Organization (ILO) Convention 169: Indigenous and Tribal Peoples
Convention in 2008; yet attacks and protests have continued.29 With the wave of
demonstrations in the country in 2019, many indigenous communities found an
opportunity to push for constitutional recognition of indigenous rights.30
23
"Chile." The World Factbook. Central Intelligence Agency. Retrieved Aug. 8, 2022. https://www.cia.gov/the-
world-factbook/countries/chile/Chile was rated as having the second-highest Gini coefficient among OECD
countries (and was the highest when protests began – before Costa Rica became an OECD member). The Gini
coefficient measures the inequality among values such as levels of income. OECD 2022, “Income Inequality.”
doi: 10.1787/459aa7f1-en (Accessed Aug. 23, 2022).
24
“Indigenous Peoples in Chile.” International Work Group for Indigenous Affairs (IWGIA) Retrieved Aug. 17,
2022.
25
Ibid.
26
“Araucanian Wars." Encyclopedia Britannica, May 17, 2017..
27
Chambers, Jane. “Chile’s Mapuche Indigenous Group Fights for Rights.” BBC, Nov. 26, 2020.
28
“Armed Men Destroy Two Dozen Logging Trucks in Chile Indigenous Dispute.” Reuters, Aug. 28, 2017.
29
“Indigenous Peoples in Chile.” IWGIA, Retrieved Aug. 17, 2022.; Gonzalez, Ana. “Understanding Indigenous
Conflict in Chile: January 2019 - Aug 2020.” ACLED. Sept. 16, 2020.
30
Ibid.
2022
The constitutional draft rejected in Sept 4, 2022 vote

The 388-article draft suggested major changes across a wide variety of topics that
would have affected governance of the country. In particular, the draft constitution
attempted to recognize sweeping new social and environmental rights.31 Although
this draft was rejected by voters, some aspects may influence future proposals.
Environment
 The draft specified that, "nature has rights" and that wildlife are "subjects of
special protection." The draft proposed that the state be responsible for
protecting native species.
 The draft constitution recognized access to water and sanitation as a human
right and called to create a National Water Agency to regulate water use (Articles
140-144). Distributed water-use rights (“derechos de aprovechamiento de
aguas”), which granted complete and commercial ownership of water resources,
would be canceled.32
 The state would have taken exclusive property rights to all mines and mineral
substances (except surface clay). The exploration and exploitation of these
substances would have been arranged on a finite and non-renewable basis and
subject to regulation that takes intergenerational public interest and
environmental protection into account per Article 145.33
 Wetlands and glaciers would be “excluded from any mining activity” per Article
146.34
Indigenous rights
 The state would have been required to guarantee self-determination of
indigenous groups and recognize indigenous communities as autonomous to
govern their territories.35
 Furthermore, indigenous communities and nations were offered the “right to be
consulted” before the adoption of any administrative or legislative measures that
might impact their rights.36
 Indigenous communities would have been recognized as autonomous to govern
their lands.37
31
Ramos Miranda, N.A. “Explainer: What’s in Chile’s Proposed New Constitution?” Reuters. July 29, 2022.
32
Ibid.
33
“Propuesta Constitución Política de la República de Chile.” Convención Constitucional, July 4, 2022.
34
Ibid.
35
Barry, Eloise. “Chile is Trying to Shed the Last Remnants of its Pinochet-Era Dictatorship.” Time, July 5, 2022.
36
Propuesta Constitución Política de la República de Chile”. Convención Constitucional, July 4, 2022.
37
Rodriguez Mega, E. “Chile’s indigenous peoples seek fairer partnerships with science.” Science. June 7, 2022
2022
Appendix B: Further company environmental

performance in Chile
Minimizing disturbances reliant on environmental performance
Environmental failures or perceived environmental threats may increase the risk of
opposition from indigenous peoples. For instance, the Atacama Indigenous Council
(CPA) has led protests since 2019 against Sociedad Química y Minera de Chile
(SQM) to oppose the alleged adverse environmental impacts of the company’s
lithium mining.38
Exhibit 11. Environmental performance of companies with assets in Chilean

indigenous areas
38
Sherwood, Dave. “Indigenous Groups in Chile’s Atacama Push to Shut Down Top Lithium Miner SQM.”
Reuters, Aug. 14, 2020.
2022
Water performance
With the proposed cancellation of commercial water ownership rights and future
water rights to be distributed by a new water authority in Chile, the companies most
dependent on Chilean water may face new restrictions and possibly need to build
desalination plants or other water infrastructure. Chilean companies such as Vina
Concha y Toro and CMPC had some of the highest freshwater withdrawal intensities
among companies with assets in Chile.
Exhibit 12. Water withdrawal intensity and exposure to Chile
Source: MSCI ESG Research, company disclosure, as of Aug. 22, 2022
2022
Appendix C: Assets in Chile

Exhibit 13. Number of MSCI ACWI IMI constituent companies with assets in
Chile by sector
Source: MSCI ESG Research, S&P Global Market Intelligence
Exhibit 14. Asset count per sector used in report
Exhibit 15. Asset count per sub-GICs industry in Chile used in report
2022
Appendix D: Risk-layer data sources

Biodiversity
 Global Safety Net (GSN) was developed through the non-profit One Earth to
support the goal of protecting 30% of the Earth’s lands and waters by 2030 or
50% by 2050. The six layers that make up the GSN equal approximately 50% of
the Earth’s land and can act as a blueprint to address the twin crises of
biodiversity loss and climate change.23 For this analysis, we only used a select
set of layers, as some were not commercially available to us and others were
deemed to have insufficient support. The layers that were used were: 02
Distinct Species Assemblages, 03 Rare Phenomena, 04 Intactness, Tier 1
Climate Stabilization Areas and Tier 2 Climate Stabilization Areas.
 Mean Species Abundance (MSA): This is an indicator used to express local

biodiversity intactness. It ranges from 0 (= no original species) to 1 (fully intact
ecosystem). The global area weighted mean for 2015 was 0.56. MSA was
developed as part of the Global Biodiversity Model for Policy Support (GLOBIO).
 Global Biodiversity Model for Policy Support (GLOBIO): The GLOBIO model is a
calculation of local terrestrial biodiversity intactness through a pressure-impact
relationship assessing six anthropogenic pressures on the environment: “land
use, road disturbance, fragmentation, hunting, atmospheric nitrogen deposition
and climate change.” The GLOBIO model was developed by a group of scientists
at the PBL Netherlands Environmental Assessment Agency.
 GLOBIO Sharing the Planet (SP): GLOBIO SP prioritizes the multifunctionality of

a landscape and the delivery of multi-benefits through ecosystem services.
Impacts of SP conservation strategies on biodiversity and food security are in
scenarios where global warming is limited to 2.1°C and thus additional
sustainability measures in the food and agricultural system are applied.
Scenarios were evaluated against, the “Middle of the Road” approach of the
Shared Socio-economic Pathways (SSP2). SSP2 describes a world in which
social, economic and technological trends do not shift markedly from historical
patterns.39
39
Kok, Marcel T.J., Meijer, Johan R., van Zeist, Willem-Jan, Hilbers, Jelle P., Immovilli, Marco, Janse, Jan H.,
Stehfest, Elke, Bakkenes, Michel, Tabeau, Andrzej, Schipper, Aafke M., and Alkemade, Rob. 2020. “Assessing
Ambitious Nature Conservation Strategies Within a 2 Degree Warmer and Food-Secure World.” PBL Netherlands
Environmental Assessment Agency.
2022
Indigenous Areas
 Territorial designation
o Areas de Desarrollo Indigena: territorial designation that stems from the Ley
Indigena 19.253 (Indigenous Law). It identifies territories for the state to
focus its policy efforts to try to improve the quality of life of indigenous
communities living there.40
o Titulos de Merced: Legal documents given to the Mapuche communities
that were displaced between 1884-1929. Through the “titulos de merced,”
the state formally recognized that these territories legitimately belonged to
the Mapuche communities.
 Disputed/expanding territory:
o Compras Tierras Art 20A: The Indigenous Law created the "Land and Water
Fund," managed by the CONADI (National Corporation for Indigenous
Development). Art 20A creates subsidies for the acquisition of land by
members of indigenous communities — when the surface occupied by the
community is considered insufficient.
o Compras Tierras Art 20B: Established the creation of financial mechanisms
aimed at dispute resolution involving indigenous land recognized as such by
the state.
 Indigenous communities
o Asociaciones Indigenas Tarapaca: Refers to the “indigenous associations”
in Tarapaca (northern region of Chile). An indigenous association is a group
of at least 25 indigenous members who have joined voluntarily and who
work toward a common goal, for instance, the development of educational,
cultural, professional or economic activities that benefit community
members.
o Comunidades Indigenes Act. Julio 2022: Under the new Indigenous Law, an
indigenous community is defined as a group of people from the same
ethnicity that meets at least one of the following criteria: 1) belong to the
same family, 2) have an indigenous traditional leadership model, 3) possess
or have possessed shared indigenous land, or 4) come from the same
“ancient settlement.”
Source: MSCI ESG Research, CONADI, CEPAL
40
“653274 - Mapa General.” Sistema Integrado de Información CONADI. n.d. Aug. 20, 2022.
2022
Appendix E: Data used for this report

ESG factor name in Short name Exhibits
ESG Manager
CONTROVERSY_CASE_ Controversy Case Type 3
TYPE
CONTROVERSY_CASE_ Controversy Case Status 3

STATUS
GEO_EXP_SEGMENT_A Geographic Segment Asset Percentage 8

SSET_PCT (%)
ENVIRONMENTAL_PILL Environmental Pillar Score 9, 11

AR_SCORE
COMM_REL_SCORE Community Relations Key Issue Score 10
HUMAN_RIGHTS_LOCA Human Rights – Impact on Local 11

L_COMM_FLAG Communities Flag
WATER_FRESH_WD_IN Freshwater Withdrawal Intensity 12

TEN_RECENT (m3/USDm)
Thematic Report
MSCI ESG Research LLC
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New Biodiversity and Indigenous Protection Risks in Chile

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Thematic Report

MSCI ESG Research LLC

New Biodiversity and

Samuel Block, Gabriela de la Serna, Mark Jwaideh

Industries exposed to change

Exhibit 2. Chilean assets exposed to HCV biodiversity and indigenous areas

Company controversies in Chile

Assets exposed to HCV biodiversity in Chile

Assets exposed to indigenous lands in Chile

Exhibit 7. Indigenous areas of Chile and company assets there

Company exposures to HCV biodiversity and

Biodiversity impact risks

Community relations of mining companies in indigenous areas

Exhibit 10. Community relations performance of mining assets in indigenous areas

The current Chilean constitution

Indigenous populations in Chile

The constitutional draft rejected in Sept 4, 2022 vote

Appendix B: Further company environmental

Exhibit 11. Environmental performance of companies with assets in Chilean

Exhibit 12. Water withdrawal intensity and exposure to Chile

Source: MSCI ESG Research, company disclosure, as of Aug. 22, 2022

Appendix C: Assets in Chile

Source: MSCI ESG Research, S&P Global Market Intelligence

Exhibit 14. Asset count per sector used in report

Source: MSCI ESG Research, S&P Global Market Intelligence

Source: MSCI ESG Research, S&P Global Market Intelligence

Appendix D: Risk-layer data sources

 Mean Species Abundance (MSA): This is an indicator used to express local

 GLOBIO Sharing the Planet (SP): GLOBIO SP prioritizes the multifunctionality of

Source: MSCI ESG Research, CONADI, CEPAL

Appendix E: Data used for this report

CONTROVERSY_CASE_ Controversy Case Status 3

GEO_EXP_SEGMENT_A Geographic Segment Asset Percentage 8

ENVIRONMENTAL_PILL Environmental Pillar Score 9, 11

COMM_REL_SCORE Community Relations Key Issue Score 10

HUMAN_RIGHTS_LOCA Human Rights – Impact on Local 11

WATER_FRESH_WD_IN Freshwater Withdrawal Intensity 12

AMERICAS About MSCI

Sydney + 61 2 9033 9333

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