Posted in GreenBiz
June 6, 2022

How corporations can create an environmental justice policy


Corporate America’s commitment to environmental justice has been tepid to non-existent.

Several factors explain this absence of commitment, including a fear of lawsuits from high community pollution levels, opposition to revising operating permits by regulatory agencies, potential citizen protests to plant site expansions, and corporations’ broader reluctance to discuss their economic and political power in communities populated by people of color and/or lower incomes. 

This reluctance and, at times, opposition to engage in the environmental justice conversation is part of a broader failure to recognize a more historic legacy that stems from the origins of the nation. In fact, the problem of environmental justice is but one manifestation of racial and social injustice that began with the introduction of slavery and has continued in post-slavery times, including our own. 

That’s a lot of history to digest for any company that seeks to develop a clearer and more credible declaration of its views on environmental justice. However, two factors are pushing corporations’ deliberations forward. First, employees, and the critical talent they represent for business success, are becoming even more influential in shaping senior management expectations on social issues, including environmental justice. Second, expanded transparency will continue to disrupt those companies that resist aligning their priorities and values on environmental justice and other issues with the needs of a changing society that bequeaths their license to operate.

Business remains the most resilient of all our major institutions. The path forward for those companies seeking to create an environmental justice policy embodies both pragmatism and aspiration. A five-step planning process can match business capabilities with societal needs. The components of such a process include:

1. Acknowledgement

Today’s companies did not exist at the time when slavery was introduced in America nor for most of the country’s history. However, companies obtain their right to exist and operate through their relationship to government and civil society, and they need to comply with its laws and reflect its norms. As society’s values evolve, leading companies seek to communicate their recognition and support for such priorities as women’s rights, immigration, environmental protection and civil rights. Environmental justice represents an increasingly prominent expression of contemporary values. Corporations should acknowledge its importance and the history that led up to it.

2. Science

Large segments of the private sector have invested in science as a foundation for innovation but also to better understand the impacts of pollution they emit upon populations and ecosystems. The emergence of newer scientific methods and tools from increasingly digitalized technologies has dramatically expanded the kind and amount of data available to understand pollution sources and health and environmental effects.

The greater ubiquity of low-cost sensors, community mapping tools, satellites and other technologies that continuously transmit data from decentralized and mobile platforms (including personal sensors) are transforming scientific knowledge of both the sources of pollution and their consequences. This is increasingly true of pollution emissions in communities of color where citizen science initiatives are being mobilized for data collection efforts. 

These and other forms of digitalized science are gaining rapid acceptance within the scientific community and will receive greater prominence in regulatory decision-making. Corporations should invest in these emerging areas of science and establish credible collaboration partners to better understand the implications for their own facility operations and the environmental justice consequences for nearby populations.

Business remains the most resilient of all our major institutions.

3. Multilayered diversity initiatives

A growing number of Fortune 500 companies including Dow, IBM and Unilever are beginning to achieve measurable progress in diversifying their organizations and making them more inclusive. This includes greater gender and racial diversity in board of directors and executive leadership team composition as well as a push to diversify the ranks of below C-suite management positions.

Advancing these beachheads should provide important momentum to developing a corporate environmental justice policy. Such a policy should aim to reduce the inequitable distribution of pollution exposures to people of color and lower-income populations that live within or near plant communities, shipping centers or other locations where business operations generate significant environmental releases. Leaders and staff from corporate diversity teams should be represented in the effort to create an environmental justice policy.

4. Governance with a difference

Like other major corporate governance initiatives, an environmental justice policy should be accompanied by goal setting and performance metrics. In this instance, such outcomes should reflect a governance process in which both internal and external stakeholders both have a leading voice in defining the expected results.

This “governance through stakeholder collaboration” becomes an important innovation to ensure expanded transparency and credibility of the various initiatives — capital expenditures, modifications in plant operations, community investments and philanthropy, employee volunteerism — necessary to advancing environmental justice.

One outcome of such collaboration can be the development of an “environmental justice plan” that identifies and prioritizes individual plant communities’ environmental justice commitments. The existence of this plan can itself become an important lever for a company and its local stakeholders to attract supplemental funding and participation from government and foundations to achieve worthy social goals beyond healthier air, land and water quality to include improved access to medical care, better nutrition, reduction of violence and adoption of community wellness programs.

5. Values-based political engagement

The polarized U.S. political situation holds increasing peril for corporations that make various sustainability commitments (on climate change, support for LGBTQ rights, voting rights), while directly (or indirectly through their trade associations) providing financial and other advocacy support for government officials that implacably oppose these positions.

Such behavior exposes companies to charges of hypocrisy by powerful factions of far left and far right political movements. As recently demonstrated by the contradictory positions of The Walt Disney Company in Florida, voracious politicians will seek to exploit and destroy a company’s brand and commercial success to advance an extremist agenda.

How, then, can corporations navigate these treacherous waters? There is only one viable approach — to stay true to the core values embedded in the company’s founding and subsequent success. The best barometer of these values remain the expectations of diverse and talented employees who themselves are representative of an increasingly diverse society. Given their ongoing right and obligation to participate in political democracy, senior leadership teams should modify the criteria by which corporations contribute and are involved in the political process so that their long-held values shape the positions they advocate.

Conclusion

The growing number of shareholder resolutions for racial and social equity verifies that companies are experiencing a moment of reckoning on their approach to these issues. Over the past year, BlackRock and JP Morgan Chase have agreed to conduct independent racial equity audits, while 54 percent of Apple’s shareholders approved such a resolution March 4. Last month, in the midst of decisively defeating resolutions for ambitious climate actions, 48 percent of Chevron’s shareholders approved a similar measure.

As the most powerful set of institutions in the U.S., corporations have both a unique opportunity and a responsibility to reset their and the nation’s course on social and environmental justice. By doing so, they solidify their own legitimacy and position themselves for future success.

June 6, 2022 at 03:15PM

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