New Microsoft solar project shows climate, racial equity are connected
A Bronx rooftop with a view of Manhattan in the distance is covered in solar panels. As climate and racial justice are linked, ESG experts believe that more clean energy projects and jobs need to be created in neglected urban communities.
DON EMMERT | AFP | Getty Images
Climate crises across the country – record heatwaves, forest fires, and floods – have brought climate to the fore on corporate agendas. At the same time, companies are held accountable for their efforts to combat systemic racism at the community level. The two goals may seem different, but a new Microsoft renewable energy deal shows that environmental and social regulations shouldn’t stay in their silo as the ESG industry evolves. Environmental injustice and racial injustice have always been linked in the real world and should be in the realm of corporate ESG as well.
Microsoft announced a solar energy partnership with Volt Energy, a Black-owned solar energy development company, in mid-July to provide Microsoft with 250 megawatts of solar power. It’s just a small power purchase agreement in the tech giant’s pledge to use 100% renewable energy by 2025, but it’s not only characterized by being signed with a minority company, but also by being structured in that way is that part of the profits will be used to develop renewable energy sources in underserved communities in the United States.
The deal was Microsoft’s first contract to purchase utility solar power with an African-American solar energy development company.
Big Tech’s commitment to the climate
Microsoft is already a leader in environmental initiatives from waste disposal to CO2 removal and joins Big Tech colleagues Apple and Alphabet and, more recently, Amazon, who are all investing heavily in climate technology, be it to operate their own energy-intensive data centers or for the transport requirement. like on Amazon.
However, Microsoft’s overarching climate promise goes one step further than most companies, making the promise not only to become carbon neutral, but to remove all carbon from the environment by 2050 that the company emitted either directly or through electricity consumption since its inception in 1975 Has .
“This is yet another example of how they are pushing the boundaries of what corporate governance is all about,” said Alison Omens, chief strategy officer at JUST Capital, an ESG research specialist that will rank Microsoft No. 1 among the companies, a position it has repeatedly held in the rankings. “Microsoft is doing a good job thinking about the link between equity and environmental justice,” she said. “We cannot think about these things in silos.”
The introduction of climate technology in underserved communities is leading to high-paying green jobs, healthier air, and increased investment in these neighborhoods.
Tim Boyle | Getty Images News | Getty Images
“You’re not doing it for charity,” said Nathanael Greene, a senior renewable energy advocate for the National Resource Defense Council. “They are busy making money so this tells us that renewables are winning in the market.”
This marketplace must increasingly represent all of America, including the long-neglected rural and urban color communities.
“Community-based renewable energy projects and related initiatives take time to develop, and we focus on doing the work to ensure our success,” said Noelle Walsh, corporate vice president of Microsoft’s Cloud Operations and Innovation Group.
Racial Justice and Climate Justice
Following the death of George Floyd and the Black Lives Matter movement, discussions about racial inequalities sparked in companies across the country. The broader story, combining environmental justice and racial justice, draws a map of the pollution of the 20th ecological non-profit movement that grew in size and scope, but often did not lack diversity in its leadership ranks and mission statement.
Microsoft and Volt Energy executives declined to provide details on the projects developed as part of the partnership, but providing renewable energy sources to underserved communities is an important step in investing in the intersection environment to tackle racial inequalities.
In the late 1960s, during the heyday of the civil rights movement, growing concerns about the injustice of protecting the environment for colored communities surfaced in the U.S. Black, Native American, Latin American, and Asian American residents, according to the U.S. Environmental Protection Agency.
Racial inequalities such as these persisted into the 1990s when an executive order was signed by the Clinton administration in 1994 that provided federal funding to improve environmental and health conditions for minorities and low-income communities.
“It is critical that investments in clean energy infrastructure and economic development are made in underserved minorities and rural communities that are disproportionately affected by environmental injustices and lagging behind in the health and financial benefits of the thriving clean energy economy,” said Volt Energys Co -Founder and CEO Gilbert Campbell in a statement at the time the deal was announced. “It is equally important to provide access to the benefits of the clean energy movement for businesses and job creation.”
The intersection between the environment and racial justice is an issue on which leading ESG researchers and ESG investment activists are beginning to develop metrics. On Wednesday, the As You Sow shareholder group released its first environmental racism scorecard for S&P 500 companies (Microsoft was # 1). As You Sow sees the metric as important in holding companies accountable for environmental damage as they make progress – and promoting diversity efforts, such as in hiring. The Racial Justice Scorecard contains indicators that specifically focus on environmental racism by tracking corporate environmental violations, fines and penalties since 2015.
Assessment of environmental damage
Andy Behar, CEO of As You Sow, said the new ESG metric stood out for a bad reason: the number of companies that ended up receiving a negative rating when their progress on diversity was measured by their environmental damage.
“Environmental harm, money paid into super fund sites, toxins dumped in paint communities … 39 of the S&P 500 don’t make it to zero,” he said. “We have never had a scorecard on which we had to visualize negative numbers. It describes the situation on site. They do more damage than they can compensate for with positive attitudes and donations to color communities.”
Among those S&P 500 laggards are many oil and gas companies as well as Warren Buffett’s Berkshire Hathaway, which is under increased ESG scrutiny.
ExxonMobil was down 23%, finishing last. An example cited by As You Sow is the Beaumont, Texas neighborhood, where 95% of the population are African American and an ExxonMobil refinery releases at least 135 toxic chemicals.
Exxon Mobil Beaumont’s polyethylene plant stands after Tropical Storm Imelda in Beaumont, Texas, USA, on Friday, September 20, 2019, which caused flooding that threatened refinery operations.
Bloomberg | Bloomberg | Getty Images
“When we talk to a chevron, [Chevron was not in the bottom 10, ranking 350 out of 500 companies] or whoever, we are saying that not only are you failing on climate, but you are getting a negative rating on racial justice, and you can’t have climate justice without racial justice, and this data actually shows that and will become part of the shareholder next year its resolutions, “said Behar.
Various energy guides
“After George Floyd, many companies in Silicon Valley took a close look in the mirror and said they needed to invest in more diverse entrepreneurs and more diverse companies, but I haven’t seen much progress there,” said Donnel Baird, CEO and Founder of BlocPower. an air conditioning start-up based in Brooklyn, New York that focuses on energy efficiency retrofits for urban buildings.
BlocPower, ranked 47th on the CNBC Disruptor 50 list in 2021, has completed over 1,000 projects in the New York City area and is expanding its projects in 24 additional US cities. The Urban Green Council estimates a market of US $ 20 billion and well over 100,000 jobs that will be created by 2030 in the New York City area alone.
Baird’s firm has received a $ 50 million investment from Goldman Sachs, as well as investments from Salesforce Ventures and Andreessen Horowitz, all of whom came together in the midst of a pandemic to fund the company early on.
“I think it’s moral and ethical for business leaders to invest in green infrastructure,” said Baird, but added, “Goldman Sachs is investing $ 50 million in our company to invest in green buildings and low-income communities for that PR. They’re doing it because it’s a great story and they’re going to make money. “
Baird pays tribute to Microsoft for taking the lead in the United States by making substantial investments in communities that need environmental justice initiatives, but said all technology companies can go further. They can diversify their supply chains for sustainability, and as more companies invest in carbon offsetting to meet their ambitious carbon neutral goals in the coming years, companies on the streets of Chicago, Seattle and Low should invest in renewable energy loans -Income communities instead of in the Brazilian rainforests, where there is less corporate responsibility.
He recently told CNBC that the path for black founders in the energy sector is still marked by biases he experienced firsthand with fundraising, and George Floyd is not going to change fast enough.
“We spoke to 200 investment firms before the first yes. It was no to no for months,” said Baird. “The same people who invest before George Floyd are the ones who invest afterwards. I think the intentions are real, but deep down in their hearts they are just looking for the 19 year old Stanford or Harvard dropout who did programming. ” for 10 years. It’s pattern recognition. “