Environmental justice: Rules of the road are changing fast

When the 15 agencies of the executive branch unite behind a core goal, it is time to take notice.

Few would expect agencies as different as the Department of Energy, Department of Justice and the Securities and Exchange Commission to reflect a same central priority, but they have. At every level of the federal government, the Biden administration has mobilized to address climate change as an existential threat and one that has disproportionately impacted low-income and communities of color for decades.

"It's a whole-of-government approach to put climate change at the center of our domestic, national security, and foreign policy," said President Joe Biden on his first day in office. Looking ahead to the next four years, increased environmental justice litigation and criminal enforcement will place a stamp on how this administration's environmental policy and regulatory changes will shape the legal landscape.

The challenge for the regulated community is to stay informed about the details for these environmental justice initiatives, and understand the tools used to identify operations and facilities that may draw enforcement attention. For example, EPA issued a guidance memorandum entitled "Strengthening Environmental Justice Through Cleanup Enforcement Actions" on June 1, consistent with the direction to "strengthen enforcement of violations of cornerstone environmental statutes" in communities overburdened by pollution. The memo discusses the use of community engagement, compliance reviews, expanded response actions, and unilateral administrative orders and other tools to compel potentially responsible parties to take early cleanup action at these sites.

In another June memo, the EPA Office of Criminal Enforcement, Forensics and Training unpacked steps to incorporate victim data and other relevant information into the data gleaned from EJSCREEN to identify and pursue environmental crimes. This move calls on companies to increase inspections, secure damages for environmental crime victims, and promote compliance data transparency.

These memos also referenced the tools used to identify those environmental justice communities. In May, the White House Environmental Justice Advisory Council submitted to the Council on Environmental Quality recommendations for creating a geospatial Climate and Economic Justice Screen Tool per President Biden's January 27 executive order creating the Justice40 Initiative. That plan will rely on climate datasets and mapping tools to identify impacted communities and work to reset the generational impacts of high pollution exposure, ongoing disinvestment, and harmful environmental, housing, and economic policies.

Justice40, for example, earmarks 40% of climate and clean energy investments for the vulnerable communities identified using climate screening data. From the legislative branch, Rep. Cori Bush (D-Mo.), Sen. Tammy Duckworth (D-Ill.), and Sen. Ed Markey (D-Ma.) have initiated similar efforts with their Environmental Justice Mapping and Data Collection Act of 2021. If passed, this legislation would inform how investments in target communities are directed according to the layered maps and datasets compiled to identify recipients.

In addition, since 2015, the EPA's Environment Justice Screening and Mapping Tool has been used to rank risks faced by environmental justice communities by comparing income, race, ethnicity, education level, language barriers, and age against environmental indicators for air, dust/lead paint, waste, and water quality.

Several states have also enacted their own environmental justice screening tools. The most notable is California's CalEnviroScreen, which is currently undergoing public comment for its newest revision. These tools are designed to provide a relative comparison between communities and rank them based on their environmental and demographic indicators. CalEnviroScreen expresses an area's overall burden with a final score and measures the cumulative impacts of multiple environmental factors -- both of which are improvements to EJSCREEN.

In the future, EJSCREEN may be replaced by the WHEJAC's geospatial climate screening platform. But for now, agencies continue to use the tool for permitting, siting, and compliance -- and the legal community has leveraged the database in environmental justice litigation. EJSCREEN was recently cited in a case against Formosa Plastics and its planned petrochemicals complex in St. James Parish, Louisiana, where plaintiffs urged the state Department of Environmental Quality to reexamine Formosa's project permit using EJSCREEN data to assess area's potential increased risk of cancer.

In another prong of this administration's environmental justice initiatives, the Securities and Exchange Commission is reviewing its disclosure requirements for companies, pointedly regarding their environmental, social and governance principles. The SEC has solicited public comment on climate disclosure mandates and established a Climate and ESG Task Force in its Division of Enforcement. Current guidelines only suggest that risks associated with climate change be disclosed in federal filings, but the Commission aims to tighten these regulations by requiring that they be more pointed and specific.

As these environmental justice initiatives unfold, firms guiding their clients through this fast-changing landscape need to employ both proactive and reactive measures to mitigate environmental liability and ensure compliance with environmental laws. Avoiding environmental justice complaints filed against chemical and energy manufacturers require elevated awareness of the social and public health implications of pollution, facility siting and the overall impact on communities. Some important considerations:

1. Due diligence is paramount.

Facility owners, developers, and new infrastructure projects must fully investigate and understand how their activities can be linked to adverse public health and environmental outcomes before breaking ground. Prudent siting protocols are already critical to industry successes, but the stakes are even higher to incorporate environmental justice considerations into the planning process.

2. Project development now calls for continuous community engagement.

Project developers will be pressured to prioritize stakeholder engagement, communicating with those living near proposed sites or facility. Early outreach and considering community perspectives can sometimes turn automatic opponents into potential collaborators -- or even third-party endorsers. Engagement tends to position the firm positively, often mitigates potential litigation, and even influences regulatory decision making as agencies can require "meaningful involvement" from stakeholders.

3. Impact assessment is more than environmental reports or just checking a box.

Rather than limiting impact assessments to the required federal environmental reports and the surface-level effects of operating near communities, organizations may consider how to examine their impact along their value chain. Identifying areas for impact reduction to mitigate public health and environmental consequences can also present opportunities for more good faith community engagement. Transparently weaving environmental principles into all business practices will give the client more credibility when dealing with public sentiment and regulators.

4. Know what kind of environmental screening data to use during development, as well as how to leverage it.

Understanding the methodology and limitations of the various environmental justice screening tools is important. EJSCREEN boasts an exhaustive range of data, but it is only a tool, not the final word on environmental justice impacts. Gaps in its framework can skew its applications. Its data inputs can be out of date and vary in accuracy if sourced from survey results instead of census results. State-based environmental justice assessment tools can offer more current and accurate data specific to subdivisions and census tracts. They may, however, exclude demographic indicators like race and ethnicity, and may offer holistic assessments (a final score) for environmental justice communities that can be misinterpreted.

5. Be up to date about fast-changing environmental enforcement regulations.

Regulated parties should review the environmental justice criteria set by key federal agencies for operating in their respective industries. EPA can file enforcement litigation or seek non-judicial enforcement by issuing violation notices or compliance/cleanup orders to noncompliant companies. Similarly, the SEC is developing enhanced disclosures tied to climate risk as part of a push for greater collaboration between government and the private sector on climate change mitigation.

Environmental justice presents both a challenge and an opportunity as the tools for its implementation undergo continuous improvement. 