More so than any other issue, environmental justice (EJ) remains a central pillar of the Biden Administration’s regulatory agenda. Below, we’ll answer three EJ-related questions that the regulated community may struggle with this fall.

EJ Background

The US Environmental Protection Agency (EPA) defines “environmental justice” as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation and enforcement of environmental laws, regulations and policies.” To no one’s surprise, US EPA’s FY2024-2027 National Enforcement and Compliance Initiatives lists protecting disadvantaged communities as among the agency’s main priorities. These initiatives address “urgent environmental and public health challenges that would be difficult for EPA and its state partners to tackle without additional resources and concentrated effort.” Even other initiatives like “mitigating climate change,” “protecting communities from coal ash contamination,” and “chemical risk reduction” specifically highlight EJ communities as a priority.

As befits a regulatory priority, EJ-related topics have accumulated throughout late spring and summer:

• New Biden Administration Executive Order Expands EJ Across Federal Government
• Differing state and local responses to federal EJ efforts
• Will the Supreme Court’s Affirmative Action Decision affect EJ issues?
• New Jersey Rolls Out State EJ Program
• Biden Administration Issues New Guidance Seeking to Broaden Public Participation and Community Engagement

For the run-down of issues we discussed earlier in 2023, check here. With these in the rearview mirror, below are issues we expect to drive the EJ headlines in the coming months.

1. Why So Much Drama?

EJ issues, which had percolated in academic and activist communities for decades, were pushed into the spotlight by the Biden Administration, which emphasized that it would tackle them with a “whole of government” approach. Some parts of this approach – increased community engagement, promoting accountability, and prioritizing enforcement in EJ communities where historic enforcement had been lax – were well within EPA’s statutory prerogatives. (For a good primer on the Biden Administration’s initial EJ plans, see here.)

Remedies to some EJ issues pose little concern from a governance perspective. As one example, the City of Houston and the US Department of Justice (DOJ) reached a settlement in June to address persistent issues with illegal dumping, which began with civil rights complaints. Under the settlement, Houston initiated the “One Clean Houston” plan, which provided increased funding for trash removal, additional support for police activities designed to prevent reoccurrence of dumping, and increased community engagement. While federal involvement in this space relied on civil rights authorities, both the subject matter (dumping) and settlement —under which a municipality doubled down on issues within traditional police powers — generally accorded with practices outside of the EJ space.

Permitting is where EJ can require a different perspective. Indeed, absent statutory reform, addressing some EJ issues requires a degree of cooperation from state or local governments. Here are three examples:

• Biden Administration efforts related to a Chicago metal recycling facility relocation to an EJ area have resulted in the facility operator building a facility it cannot legally operate. After Chicago officials pushed the relocation, Chicago’s future funding from the US Department of Housing and Urban Development (HUD) was put at issue. (See our discussion here.)
• In Louisiana, EPA EJ officials initially pushed for dramatic changes in state-level permitting. (See our discussion here.) In Louisiana, even though EPA dropped its environmental civil rights investigations, it remains enmeshed in litigation with Louisiana about its use of civil rights statutes.
• Finally, in a high-profile Michigan permitting dispute, state regulators entered into an informal agreement to address EPA civil rights concerns related to permitting at an asphalt facility, with the relief falling far short of what was sought by the civil rights groups that had pushed for EPA’s intervention. (See here.)  

We discuss how issues in Illinois and Louisiana were resolved in greater detail here. While Chicago, which has a Democratic mayor, eventually agreed to implement broad-based but local efforts to address EJ concerns, Louisiana took a different tack and sued the federal government, alleging violations of due process. Without statutory changes, addressing EJ issues, particularly related to so-called “cumulative impacts,” are challenging. We will keep an eye on this case; stay tuned for further developments.

2. Won’t EJ Just Go Away If We Have a Republican President?

Now that the genie is out of the metaphorical bottle related to EJ, it is likely that EJ issues will remain a priority regardless of which party controls EPA. While “red state versus blue state” dynamics play out in EJ — as is exemplified by Louisiana’s aggressive opposition, illustrated by its participation in a State Attorney General letter comments on Federal Plastic Strategy (available here) — EJ issues can cut across typical urban/rural divides, as they do in states like West Virginia (related to coal and natural gas) and North Carolina (where agricultural EJ issues predominate).

The Biden Administration has robust authorities to deploy to address EJ issues even if Title VI didn’t exist. Federal regulators affirmatively seek out noncompliance with environmental laws, and the trend of EPA focusing more efforts on communities with EJ concerns is likely to continue, particularly because these efforts can, in the future, rely on increased monitoring or new sensors installed now. Beyond this, EPA continues to build out EJ capabilities in the regions, and the existence of these offices will continue beyond the Biden Administration.

Finally, as with other environmental issues, other actors, including state and local governments, NGOs, and indeed businesses, are increasingly engaged with EJ issues. These efforts likely will not end with the next election.

3. How Can EJ Affect My Business?

Because EJ efforts will likely continue, a practical starting point for businesses is knowing whether their operations are in “environmentally overburdened” communities. When businesses operate in such communities, consistent community engagement is the first step in minimizing exposure. Additional steps include:

• Consistent Community Engagement. Maintaining consistent community engagement is a keystone to managing EJ issues. If community leaders are only in contact with a business when the business needs to report an environmental issue, tensions are likely to be higher, and community leaders may reach out to regulators as a first step to raise concerns instead of relying on pre-existing relationships with at the business. As EPA has stated that it intends to redouble efforts to engage in EJ communities and to use tools like increased monitoring to better assess and address community concerns in real time, having resilient relationships to begin with is a must.
• Preparing for Increased Regulatory Scrutiny. If your business operates in an EJ community, make sure your compliance house is in order. As we indicated above, in the coming years, EPA has prioritized site inspections and other enforcement in EJ communities.
• Ensure Consciousness of EJ-Associated Risks is Factored into the Corporation’s Governance Strategy and Overall Risk Profile. It is important to note that every business’s risk profile is different. For instance, energy-intensive businesses currently face a heightened risk of litigation in the environmental, social, and governance (ESG) space, whereas a software or marketing company might have no meaningful exposure in the EJ space. Recent litigation against Delta — an airline company sued over “green” claims even though it is a heavy user of fuel — illustrates this (see here.) With regard to EJ, businesses seeking to relocate or re-permit operations in EJ communities may need to be strategic about what EJ-related disclosures are made and when. Some of the “asks” EPA has recently made, such as asking a petrochemical company to relocate a school as a potential solution to resolve concerns related to facility expansion, can pose significant challenges in terms of ESG reporting.
• Clarity in EJ-Related Sustainability Disclosures or Corporate Reports. Businesses need to evaluate where and when EJ-related ESG disclosures are made in the context of prior disclosures. As we have discussed, EJ disclosures have both “environmental” and a “social” aspects and would be made in a context where the underlying law is rapidly evolving. As with other business disclosures, corporate ESG disclosures or sustainability reports in the EJ space need to rely on verifiable data and strike an appropriate balance between aspiration and reality. Broad disclosures like “the Company intends to comply with the letter and the spirit of all environmental laws” may not be appropriate given the underlying legal uncertainty.