While environmental justice (EJ) initiatives and policies have been around for decades, we have seen unprecedented levels of awareness and interest in EJ over the last year, as well as a significant uptick in legislative activities that aim to ensure equitable environmental protections and outcomes for disadvantaged and minority communities.

Environmental justice involves the “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income” when developing, implementing, and enforcing environmental laws and policies. The initial rise of EJ was an outgrowth of the civil rights movement in recognition of the fact that pollution sources have been disproportionately located in poor and minority communities. While various federal and state EJ initiatives have been developed throughout the years, these programs have not yielded widespread meaningful or measurable change.  But now it appears the time has come for an EJ renaissance.

An EJ Perfect Storm

The renewed focus on EJ stems from a perfect storm of events that have unfolded over the last year: COVID-19 impacts on disadvantaged communities, many of which lack access to basic sanitation and running water; heightened awareness of social and racial inequities; and the Biden administration’s aggressive social justice policy agenda that prioritizes addressing systemic inequities and curtailing negative climate and environmental impacts on underserved communities.

Even on the state level, sleepy EJ policies are beginning to give way to robust regulatory frameworks, and we are seeing a wave of new laws that will require specific agency actions.

In Sept. 2020, New Jersey enacted sweeping EJ legislation that requires the denial of permits when facilities have a “disproportionate impact” on “overburdened communities,” as further detailed below. Other states are following suit.

Looking at these developments collectively, all indications are that conditions are ripe for a regulatory overhaul of EJ policies nationwide, and businesses need to be paying attention to these new frameworks as they unfold. Environmental justice is quickly becoming a standard compliance consideration — along with air, water, and waste — that should not be ignored.

Original 1994 EO on EJ

The original Executive Order on environmental justice, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (EO 12898), issued in 1994 under the Clinton administration, directed federal agencies to identify and address “disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority and low-income populations.” While many of the policies that flowed from it were aspirational and administrative, rather than prescriptive or binding in any impactful way, momentum has shifted toward regulatory action.

“All Government Approach” on EJ

Upon taking office in January, President Joe Biden vowed to take an “all-of-government approach” to environmental justice issues, incorporating EJ policies across all federal agencies. The administration has been moving swiftly on these promises, as it has taken numerous actions signaling that environmental justice is one of its highest priorities. In fact, it has built EJ into all policy efforts and budget proposals connected to climate and infrastructure, viewing all three issues as interconnected.

If there was any doubt on this policy agenda, President Biden’s sweeping Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis  (EO 14008, Jan. 20, 2021) makes clear his administration’s intent to prioritize environmental justice and hold accountable polluters “who disproportionately harm communities of color and low-income communities.”

EPA Enforcement Priorities

On April 30, 2021, U.S. Environmental Protection Agency Administrator Michael H. Regan issued a memo stating  the agency’s  commitment to EJ through renewed enforcement efforts, highlighting three specific program goals:

• increasing the number of facility inspections in EJ communities,
• resolving violations in EJ communities and using remedies that provide tangible benefits to communities (including seeking “early and innovative relief, e.g., fence-line monitoring and transparency tools” as well as the use of supplemental environmental projects or SEPs), and
• improving community engagement on enforcement cases that most directly impact them.

A June 21, 2021 memo discusses steps EPA is taking to advance the administration’s environmental justice goals through criminal enforcement of federal environmental laws. These efforts include better screening of criminal investigations involving offenses that impact overburdened communities, improving outreach to crime victims, and enhancing the remedies sought in environmental crime cases. Additionally, EPA will strive for earlier identification of hazardous spills in overburdened communities and require expedited cleanup in those areas. Those efforts are further discussed in a July 1, 2021 memo on cleanup enforcement actions.

So, although there currently is no federal EJ law on the books, EPA is prioritizing the enforcement of existing laws where pollution is impacting frontline (communities of color and low-income communities that are hardest hit by climate change) and fenceline (neighborhoods immediately adjacent to a company that are directly affected by the company’s noise, odors, chemical emissions, traffic, parking, and operations) communities. Lawmakers have also introduced federal legislation that includes significant EJ climate provisions, such as the Environmental Justice for All Act and the CLEAN Future Act, but prospects of passage remain uncertain.

Importantly, Biden’s EO directs the development of a data-driven Climate and Environmental Justice Screening Tool, building off EPA’s EJSCREEN, which identifies “communities threatened by the cumulative impacts of the multiple stresses of climate change, economic and racial inequality, and multi-source environmental pollution” and informs equitable decision-making across the federal government. It also established the White House Environmental Justice Advisory Council, which has convened and issued its interim final recommendations, providing action items on the development of the screening tool, proposed revisions to the 1994 EJ Executive Order (EO 12898), and a host of other far-reaching EJ initiatives.

Landmark Legislation in NJ – A Sign of Things to Come

As noted earlier, New Jersey signed landmark EJ legislation (N.J.S.A. 13:1D-157), into law Sept. 18, 2020.  With this groundbreaking law, New Jersey is the first state in the nation to require Environmental Justice Impact Statements (EJIS) to be performed as part of the permit application process for both new permits and permit renewals. The requirement applies to eight types of facilities if they are located in overburdened communities, as identified by the state based on socio-economic demographics.

Of critical importance, the new law requires the denial of permits for new facilities “where an analysis determines a facility will have a disproportionately negative impact on overburdened communities,” unless there is a “compelling public interest” in that community. In that instance, the NJ Department of Environmental Protection (DEP) may approve the permit with conditions. The law also allows DEP to impose conditions for permit renewals and permits for the expansion of existing facilities. This analysis will look at the facility’s overall “cumulative environmental or public health stressors in the overburdened community that are higher than those borne by other communities.” Significant public notice and participation requirements also will be an important part of the permitting process.

DEP concluded a series of stakeholder meetings as part of the rulemaking process. Draft regulations are anticipated by the end of 2021 with final regulations expected sometime in 2022, absent any major legal challenges. Although it is not yet known what specific factors and metrics will be used to make these impact determinations, it is without question that once adopted, these new provisions will be a game-changer for businesses with regulated facilities in NJ, with broader implications nationwide.

Viewed as a pilot or test case for EJ regulation, many other states are tracking the development and implementation of NJ’s law, and many are already enacting their own legislation. Some selected examples are below:

• California: Existing law requires local governments to consider EJ issues in zoning decisions, but it doesn’t mandate permit denials in cases where disadvantaged communities are negatively impacted. A proposed law would requires state permitting agencies to deny development applications that adversely contribute to cumulative environmental stressors in overburdened communities.
• Connecticut: A new law requires property developers to mitigate the environmental impact on the surrounding community.
• Rhode Island: The 2021 Act on Climate calls for the inclusion of environmental justice communities in its plans to reduce greenhouse gas emissions.
• Washington:The Healthy Environment for All (HEAL) Act requires state agencies to do more to protect residents in the state’s most-polluted areas. For example, agencies must develop a process by July 1, 2023, for conducting environmental justice assessments for “significant agency actions.”

Conclusion

With EJ issues front and center in the White House, at EPA, and in states across the country, it is critical for businesses to keep EJ in mind when considering operations, compliance obligations, and overall business strategies. How a company manages EJ issues and community outreach will become an increasingly important indicator of corporate performance as environmental, social, and governance (ESG) metrics and disclosure obligations garner increased attention and scrutiny from consumers, shareholders, and regulators.

EJ also will need to be examined as part of the due diligence process as parties identify how new legal requirements may impact future operations, permitting, and costs. Furthermore, it will need to be included as part of overall risk-management strategies for companies, lenders, and investors.

Montrose Environmental Group is here to help you navigate the rapidly evolving EJ landscape. With leading-edge technologies, data collection and analysis capabilities, and deep expertise in environmental impact assessments and EJ for more than 20 years, our team is eager to work with our clients to identify innovative, efficient, and integrated strategies to proactively manage these important issues.

This is the first blog in an ongoing business strategy-focused series that will concentrate on the impact of emerging environmental justice polices and regulations on decisionmakers, industry, and all of Montrose’s client sectors.