How corporations can support environmental justice | Opinion
Many businesses already have tools at their disposal to promote environmental justice.
Underserved communities in the U.S. have historically shouldered much of the health costs of pollution. On a state level, New Jersey Gov. Phil Murphy signed a law to protect overburdened communities from pollutants last September. And in February, President Joe Biden signed executive order 14008, which addresses historical environmental justice through real-time monitoring in areas of significant pollution. It also creates the Justice40 Initiative, directing federal investment in clean energy to 40% of disadvantaged communities, launching discussions about environmental justice (EJ) — which the EPA defines as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies.”
While this new executive order increased focus on environmental justice, it left many in business, industry, states, and community groups feeling challenged to figure out how best to comply.
Coming off Earth Day 2021, it is time to explore the ways that corporations can integrate environmental justice principles using existing environmental, social, and governance (ESG) criteria that many businesses already use to direct their contributions.
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With a genuine commitment by private businesses to ESG that serves to support environmental justice principles, we believe the nation really will “build back better,” as President Biden has promised.
ESG criteria are a set of standards used by socially conscious investors to screen potential investments. Environmental criteria consider how a company performs as a steward of nature; social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates; and governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
The Biden administration’s goals include identifying the needs of low-income, minority, and Indigenous populations disproportionately impacted by debilitating environmental conditions. Although recent executive orders invoke steps to achieve environmental justice, they are silent on who is responsible, and to whom. For this to succeed, the responsibility must be shared among stakeholders: local, state, tribal, and federal regulators, communities, and industry; creating opportunity for all to invest in the spaces where we live, work, go to school, and pray.
The most efficient way to advance these executive orders’ visions for environmental justice, then, are to plan action in a way that benefits businesses and communities alike. Existing ESG principles embraced and acted upon by businesses can complement and supplement activities that advance environmental justice goals.
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The ESG ecosystem encompasses more than a hundred organizations producing lists, rankings, ratings, and scorecards of companies vying to be ranked as “most sustainable.” Widely used ESG criteria based on a framework developed by Global Reporting Initiative (GRI) can be grouped into six categories. Working alongside companies, the GRI should address how these six categories might be used to address EJ as defined by the EPA, and ESG rankings should consider how corporations’ actions will meet EJ goals. Here’s what an environmental approach to the six categories might look like:
Environmental: Permits for generation of hazardous material should have robust, demonstrable waste minimization commitments.
Human rights: Ensuring freedom of association of whether to unionize, and ensuring workers a voice on the job.
Labor practices and “decent work”: Ensuring fair labor practices and adherence to Occupational Safety and Health Administration requirements, alongside promoting workforce education for career development.
Economic: Hiring from the zip code where a facility is located, which supports local sourcing of corporate needs.
Society: Creating a forum for fence line or economically depressed communities to share concerns about projects and offer corporate investment into improved local standards of living.
Product responsibility: Ensure that all permit limits are met, and industry standards are evaluated regularly for consistent implementation of state-of-the-art technology.
Additionally, EJ-related data could be overlaid with environmental, social impact, and governance scoring to promote transparency of tracking and reporting for all members of the community and to demonstrate the benefits gained.
This innovative concept of working within the existing ESG framework to integrate EJ principles will lead to a natural synergy and measurable momentum for partnerships among government and the private sector. If clearly delineated principles are incorporated within the ESG ecosystem, it would allow the realization by all stakeholders of the added value that environmental justice brings for long-term returns. Industry leaders that adopt ESG standards to promote environmental justice would educate others about the considerable national benefits gained by collaboration.
Kathy Beckett has over 30 years of experience practicing environmental, regulatory, and natural resources law. Samantha Phillips Beers is an environmental attorney with more than 30 years within the federal government.