Why Integrating Social Equity In Your Clean Energy Procurement Is A Feasible Imperative

By Phoebe Romero and Shane Lee

Energy customers and providers have a powerful role to play in advancing an equitable and just transition by leveraging the large scale of their clean energy procurement and market influence to advance co-benefits for historically marginalized communities. While concerns still exist about the perceived lack of feasibility and prohibitive cost premiums associated with advancing equity, access to tools, financial incentives, and lessons learned from market leaders illustrate that an equitable clean energy future is more feasible than ever.

Over two years ago, the Clean Energy Buyers Institute (CEBI) began its journey to embed diversity, equity, inclusion, and justice (DEIJ) across its programming and engagement through a partnership with Groundswell, a community-centered non-profit advancing equitable clean energy initiatives. Initial outcomes included a listening tour co-led by Groundswell, The Solutions Project, and Hummingbird that convened  corporates and communities to highlight the potential shared benefits from respecting and centering the values and lived experience of communities, and was followed by a Corporate and Community Engagement Primer providing guidance for meaningful community engagement. The Beyond the Megawatt initiative was launched shortly after and is building on this work by convening a growing group of diverse stakeholders to create tools and resources to build awareness and momentum for action on DEIJ. 

Here are some of our key findings:

Increased access to new data tools 

There’s an emergence of data tools that can help energy customers and providers identify communities historically impacted by environmental injustice and poised to benefit most from an equitable and just transition. For instance, the White House Climate and Economic Justice Screening Tool helps identify disadvantaged communities that have been underserved and overburdened. 

The Energy Equity Project (EEP) provides a framework for measuring equitable outcomes beyond job creation and air quality improvements, such as evaluating  Pursuing clean energy co-benefits that support healthy homes, community resilience, and alleviating financial stress from disproportionate energy burden and low-quality jobs can all lead to public health improvements in historically marginalized communities. 

BTM is creating a due diligence framework, including procurement guidance to facilitate accessibility and application of these tools and establish a clear framework for what data needs to be collected and evaluated to integrate equity in procurement processes. 

It’s good for business 

Embedding equity and justice in clean energy procurement isn’t just the right thing to do, it can also maximize access to economic incentives. The Inflation Reduction Act provides additional tax benefits for solar and wind projects developed in low-income, tribal, and environmental justice communities. There’s never been a better time to think about impactful siting of projects. 

Early and inclusive public engagement is essential to achieving a social license to operate in these communities. While deep engagement may appear more costly and time-consuming up-front it can help address costs from potential project delays and opposition in the long run.

Creating and supporting high-road jobs—those that promote practices like prevailing wage standards and equitable workforce development— can have significant quality-of-life impacts on workers and their families, while having a marginal cost increase on utility-scale clean energy development. A Princeton University study found that a 20% increase in installation and construction labor costs from improved standards would only increase the installed cost of solar PV and wind projects by 3% and 1%, respectively. 

More thoughtful clean energy procurement enhances your brand and strengthens your stakeholder relationships. A 2017 Cone Communications CSR study found that 87% of surveyed consumers make purchasing decisions based on values, 76% will boycott based on values, and 88% are more loyal to a company when it supports a social or environmental issue.

It’s already being done

The days of theoretical scenarios are over. This work is already being done by several market leaders.

  • Microsoft and Volt Energy Utility, a Black-led solar energy development firm, partnered to advance a groundbreaking Environmental Justice Power Purchase Agreement (EJPPA). A portion of the project’s revenue will be invested in community initiatives and equitable workforce development.
  • Sol Systems and Google have announced a first-of-its-kind tax equity investment that will provide capital investments to organizations serving communities of color and historically under-resourced communities to reduce energy burden and promote healthy homes through weatherization and home repair services.
  • Equity and justice can also be advanced through Renewable Energy Credits (RECs). Salesforce partnered with Powertrust to purchase 280,000MWh of Distributed Renewable Energy Certificates (D-RECs) that increase clean energy access in emerging markets that have been traditionally excluded from corporate procurement. 

You can be a leader too

A decarbonized grid for all means we can’t leave any communities behind. At BTM, we want to ensure that corporate energy customers and providers have the tools and information necessary to advance an equitable and just transition. Are you ready to join us? Learn more here

Want to join the amazing group of energy customers and providers helping to lead the way? Email Phoebe Romero at promero@cebuyers.org to join our equity working group or find other ways to get involved.