On Friday, April 22, the United States and the rest of the world will recognize Earth Day 2022.  With “Invest in Our Planet” as its theme, Earth Day 2022 focuses additional attention on Environmental, Social, and Governance (ESG) as an important metric for evaluating activities that may impact human health or the environment. In this first article, we will look back at the more than 50-year history of Earth Day and the progress that has been made in addressing environmental issues in the United States. In the second article, we will discuss the birth of the ESG metric and the current status of various efforts to standardize the way ESG issues are measured. The final article will provide practical guidance on how to establish or refine an ESG program.

At the time of the first Earth Day in 1970, there was no Environmental Protection Agency (the EPA was established by executive order in December 1970) or Clean Air Act (also December 1970). In addition to the Clean Air Act, many of the environmental regulatory programs created by Congress and administered by EPA (and other federal agencies) today trace their origins back to the initial Earth Day and a growing awareness for environmental issues potentially impacting human health or the environment. The Clean Water Act, the Endangered Species Act, the Safe Drinking Water Act, the Toxic Substances Control Act (TSCA), the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund), and the Oil Pollution Act (OPA) are all “command and control” type programs that tried to solve environmental pollution issues by regulating or restricting activities or mandating specific actions. 

While none of these federal laws have achieved all of the goals that were set at the time of passage, each of these federal laws have worked to varying degrees to improve the environment, to prevent harm to human health or the environment, or to hold those responsible for pollution accountable for the clean or the costs of clean up. For example, one of the goals of the Clean Water Act was to make all waters fishable and swimmable. While this goal has yet to be achieved, the number of waters that do not support fishing or swimming continues to decline. Even if this goal is never met fully, the Clean Water Act has had a significant impact on the quality of most waterways in the U.S. and in the manner in which domestic and industrial wastewater is controlled in the United States.

Shortcomings with initial environmental programs often became apparent, and new programs and refinements of existing programs were developed. One of the more recent examples of this is found in the history of TSCA. At the time TSCA was passed in 1976, a decision was made to “grandfather” most existing chemicals from TSCA’s regulatory structure. In June 2016, the Frank R. Lautenberg Chemical Safety for the 21^st Century Act (Lautenberg Chemical Safety Act) significantly amended TSCA and provided a pathway to evaluate the chemicals that were previously grandfathered.

After some of the obvious environmental problems with air, water, and land pollution were addressed, EPA and other environmental agencies focused on pollution prevention programs – programs designed to eliminate or reduce pollution at the source. As opposed to permitting or restricting certain activities, EPA enacted various programs designed to eliminate certain practices (e.g., ocean dumping of wastes) or to eliminate certain sources of pollution (e.g., lead-based paints and motor fuels). The consideration of environmental justice issues in federal programs was another way in which environmental (and other) programs adapted to address issues that persisted even after certain practices were controlled or eliminated by other environmental laws and regulations.

As we will see next week, the progression, evolution and adaptation of environmental laws and regulations has fostered many of the metrics currently used to evaluate a company’s ESG performance.