Mark Romanelli
March 19, 2024
Environmental justice for large scale projects
Environmental justice is an essential consideration for large scale projects seeking DOE funding. This article explores how incorporating environmental justice strategies promotes fair treatment and meaningful involvement of underserved communities, and how in doing so, businesses can secure funding, bolster their reputation, and contribute to societal progress.
In the United States (US), disadvantaged communities (DACs) disproportionately endure environmental injustices, grapple with the burden of historic toxic pollution, face insufficient investment in infrastructure and essential services, and experience an unequal share of climate change’s burdens. Environmental justice (EJ) is how we begin to address these inequities – ensuring the rising tide of sustainability lifts all boats, especially those that are most in need.
To support EJ, the Federal Government established the Justice40 (J40) Initiative. J40 creates a goal that “40 percent of the overall benefits of certain Federal investments flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution” (The White House, 2022). This goal empowers federal agencies to drive progress towards a more inclusive and sustainable future.
The Department of Energy (DOE) has taken a significant role in implementing J40. Propelled by the Inflation Reduction Act (IRA), the DOE offers substantial financial incentives, totaling billions, to support clean energy projects. One of these incentives’ conditions is alignment with J40. Organizations aiming to secure funding must articulate how their proposed projects will measurably benefit DACs.
In the US, EJ is commonly recognized to mean “the just treatment and meaningful involvement of all people, regardless of income, race, color, national origin, Tribal affiliation, or disability, in agency decision-making and other Federal activities that affect human health and the environment so that people:
- are fully protected from disproportionate and adverse human health and environmental effects (including risks) and hazards, including those related to climate change, the cumulative impacts of environmental and other burdens, and the legacy of racism or other structural or systemic barriers; and
- have equitable access to a healthy, sustainable, and resilient environment in which to live, play, work, learn, grow, worship, and engage in cultural and subsistence practices” (The White House, 2023).
EJ serves as a method to address and rectify discrimination (racial, economic or otherwise) stemming from the action or inaction of environmental regulators on a supervisory level and of organizations on an operational level.
Beyond a simple compliance activity, organizations can, and should, integrate EJ into their strategies. This integration represents a strategic shift towards a more ethical, responsible, and sustainable business model that aligns an organization’s objectives with the environmental and social impacts of its operations.
The Biden Administration has made EJ a priority, issuing multiple executive orders to support it. Notably, Executive Order (EO) 14008, titled “Tackling the Climate Crisis at Home and Abroad”, outlines a comprehensive approach to addressing climate change, promoting EJ, and advancing equitable economic opportunities (The White House, 2021). Similarly, EO 14096, titled “Revitalizing Our Nation’s Commitment to Environmental Justice for All”, emphasizes the government’s continued commitment to EJ (The White House, 2023).
These EO directives cascade to federal agencies, each of which are required to develop their own plans, policies, and programs for alignment. These agencies create programs to incorporate EJ principles, reduce carbon emissions, and ensure equitable access to federal investments’ benefits.
The administration’s focus on EJ culminated with the Bipartisan Infrastructure Law (BIL), enacted in November of 2021, and the IRA, enacted in August of 2022. Both laws dramatically increased the levels of federal investment promoting American industries while simultaneously furthering the goals of EJ. An important method both use to enact EJ is through funding opportunity announcements (FOAs). Funding is distributed through a combination of grants, loans, and tax incentives and is managed by various government agencies (The White House, 2023).
The DOE administers FOAs for energy and certain decarbonization projects. Organizations hoping to receive DOE funding must include a rigorous EJ assessment in their application in addition to more common business and technical assessments. One outcome from the EJ assessment must be the creation of a Community Benefits Plan (CBP). CBPs demonstrate how the benefits of the project will be widely shared. (Read our article on CBPs and their importance.)
Beyond a simple compliance activity, organizations can, and should, integrate EJ into their strategies. This integration represents a strategic shift towards a more ethical, responsible, and sustainable business model that aligns an organization’s objectives with the environmental and social impacts of its operations.
The DOE’s policy priorities make alignment between EJ objectives and project impacts particularly critical for large scale projects. The DOE’s focus on sustainable development, equitable access to resources, and minimizing environmental impact sets a high bar for corporate projects, demanding a comprehensive approach to EJ.
Organizations seeking financial support from the DOE must clearly outline how their proposed projects will provide measurable benefits to DACs. In many high-profile DOE grants, such as the Hydrogen Hub grant, the CBP scoring accounted for 20% of the total funding evaluation score (The U.S. Department of Energy, 2021). This is a considerable contribution in award success!
Funding is not the only point in the project development process when EJ is impactful. Many states have integrated EJ into their permitting processes. EJ is also increasingly becoming a priority for community organizations. By embedding EJ principles into strategy, organizations can navigate this landscape, not just with regulatory compliance in mind but with an eye towards long-term strategic advantage.
Organizations that employ a thoughtful EJ strategy to improve affected DACs’ wellbeing (and address past harms) can increase their DOE funding success, enhance their organization and asset reputation, and prevent considerable damage to their brand. Simply put, prioritizing EJ can determine whether a project succeeds or fails. So, when organizations start a project that may impact a DAC, EJ must be a key component to that process.
Figure 1 illustrates how J40 integration into CBPs must be specific, actionable, measurable, and timely (SMART) in showcasing how benefits will flow to DACs while connecting directly to expected project impacts. The CBP must clearly demonstrate this in order to receive a good proposal evaluation score and to increase chances for funding success.
Note: The DOE has provided detailed guidance for creating a CBP here.
For an EJ program to have any effect, the affected community, or communities, must support it. To earn support, the EJ program must be based on a deep understanding of those it aims to benefit. Two sources must be considered to develop this understanding: EJ data and community engagement. We start by examining project specifics in the light of those two sources. This examination considers questions such as:
- What is the area of impact surrounding this project?
- What DACs live in those areas?
- What concerns do those communities face and how are they affected by the project?
The answers to these questions will highlight needed actions and desired focus areas. By rooting the project in community understanding, we ensure that the community is impacted in a way that is significant to them. This strengthens ties between the project and the community and can help bolster local support for the project. Table 1 presents an example of how these questions can be operationalized.
EJ is more than just a buzzword; it is a comprehensive approach towards fair treatment and meaningful involvement of all individuals, regardless of race, color, national origin, or income. EJ is now a crucial factor in large scale project funding, development and permitting, capable of determining a project’s success or failure. EJ has also become an instrumental force to address disparities faced by DACs. Incorporating EJ well ensures DACs do not bear a disproportionate share of any negative environmental consequences.
While the impetus for its adoption was governmental action, EJ is a valuable consideration even outside its potential to improve funding opportunities. On the most altruistic level, EJ has the potential to meaningfully improve conditions in the most vulnerable communities (and its absence has the potential to harm those communities). More pragmatically, EJ can build community support for an organization’s projects through activities that are measurable, manageable, and, most importantly, impactful. This can reduce operational headwinds and lower barriers to startup.
Getting EJ right is a topic too broad to cover meaningfully in a single article, but there are two core considerations any EJ program must have. First, EJ must align to the J40 requirements for federal funding success. Second, EJ must be rooted in the communities impacted, so developing an understanding of those communities through data and engagement is essential for program success. If these are considered, the outcome can be a project aligned with the community’s specific needs, set on a clear, evidence-backed pathway to community impact, gaining improved credibility and fostering robust stakeholder engagement.
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Mark Romanelli
Manager