EBA Journal: Winter 2022 Edition by Envirobank

EBA JOURNAL Winter 2022 | Volume 7, Issue 1

Taking Steps and Moving Forward

EBA Journal – Winter 2022 Edition

EBA and Authors Copyright Disclaimer These documents and resources are provided solely to members of the Environmental Bankers Association, Inc. (EBA) for informational purposes only. EBA members are authorized to use these materials for internal reference or training purposes, but are not authorized to disseminate or publish any portion of the document to non-EBA members or the general public without prior written consent from EBA. Non-EBA members are not authorized to use these materials for any purpose without the prior written approval of the EBA. Neither the EBA, nor any of its directors, officers, employees or agents, nor any of the Authors makes any representations or warranties, express or implied, or assumes any legal liability for the completeness, reliability, timeliness, currency, accuracy or usefulness of the information provided herein, or for the applicability of the information provided herein to the facts and circumstances particular to any specific use, including but not limited to information found through any links or references to resources, case studies, projects and/or services referred to within these resources. The viewpoints and information provided by the Authors is their personal viewpoints and information, and not the viewpoints or information of the organizations of which they are employed or affiliated. Any action taken based upon the information provided in or through these documents and resources is done so strictly at your own risk. Neither the EBA nor any of the Authors shall be liable for any damages of any nature incurred as a result of or in connection with the use of this information. These materials and the information herein do not constitute legal or other professional advice or opinion. It is recommended that you seek appropriate legal or other professional advice to determine whether any advice, actions or practices referenced within these resources is appropriate or legally correct in your jurisdiction.

EBA Journal

Winter Edition Volume 7, Issue 1, January 2022

EDITOR/ COMMITTEE CHAIR

Ruxandra Niculescu COMMITTEE

Lizz Barringer Lagomarsino Claudia Biedenharn Brenna Houston Tina Huff Elizabeth Krol Holly Neber Mike Nesteroff Tori Newhouse Bill Sloan

Some of the material provided herein has been published with permission of the copyright holder and is not the copyrighted content of the EBA. Where applicable, attribution to the copyright holder has been given herein. No permission is granted to republish any such content without seeking express permission of the copyright holder.

Magazine | Page 1

EBA Journal – Winter 2022 Edition

2022 Board of Governors President

Vice President

David Lambert, Wells Fargo

John Rybak, Truist Bank

Secretary

Treasurer

Fred McDonald, Popular Bank

Mary Clare Maxwell, Chase Bank

Membership Committee Chair Onamia Chun, First Citizens Bank

Conference Committee Chair

Risk Management Chair

Legal/ Bank Regulatory Chair

Rita Wiggin, First Bank

Caitlin Lozano, Rockland Trust

Marty Walters, First Citizens Bank

Government Programs/ Emerging Issues Chair

Technical/ ASTM Chair Georgina Dannatt, Bank of the West

Jay Bowden, US Bank

Affiliate Chair

Bill Tryon, Partner Engineering and Science

Sean Leary, GZA

Thank you for your service to the EBA! 2

EBA Journal – Winter 2022 Edition

Table of

Contents Where Do We Go From Here?

The Value of EBA Membership

6-7

A message from the EBA President, David Lambert.

A look at how the EBA provides value to members.

2022 Market Outlook

8 - 11

Setbacks and Resets in the New Year as Lenders Look Ahead with Optimism

No Further Action Letters - A Trap for the Unwary 12 - 13 Ensure a thorough investigation has been performed to address all possible contamination.

Legal Risks Related to Foreclosure

14 - 20

Prior to foreclosing on property and becoming the owner, lenders must carefully identify and evaluate environmental issues.

“All” Means “All”

21 - 22

Recent Case Underscores Need for Strict Adherence to EPA Requirements for All Appropriate Inquiries

EBA Journal – Winter 2022 Edition

Table of

Contents An ASTM Standard for Climate Resilience 23 - 25 Progress Report

Enhance and Improve Your City Directory Research 26 - 27 Understanding the Resource

PFAS CORNER 28 - 29 Key takeaways from the October 2021 webinar

Environmental Justice Whitepaper

30 - 35

Environmental Justice and Potential Regulatory Impacts on Commercial Lenders

Just for Laughs

Industry comic strips from Ruxandra Niculescu

EBA Committee Corner 37 Get involved with EBA Committees in 2022

EBA Journal – Winter 2022 Edition

A Message from the President

Where Do We Go From Here?

I am excited to assume the EBA Presidency alongside a very talented Board of Governors. The new Board includes a diverse mix of seasoned veterans and new faces. Congratulations to those recently elected/appointed Governors and those continuing their terms. (see full list on page 2)

EBA President

David Lambert

A clear result of the EBA’s efforts to promote diversity, equity, and inclusion is the equal representation by both women and men on the new Board of Governors. We are excited to collaborate in an open environment as we govern into the future. I would also like to take this opportunity to thank outgoing Governors Bill Sloan, Jan Sheinson, and Michael Cole for their years of service and leadership! Under Bill’s leadership, we became a more financially sound organization and are now positioned to take advantage of strategic opportunities, an especially significant accomplishment given the headwinds presented by the pandemic over the past nearly two years.

So, where do we go from here to take advantage of strategic opportunities and execute on a late-stage/post-pandemic EBA business model? First, we will make every effort to return to an in-person conference in June 2022 in Charlotte, NC. I think I speak for the majority when saying I have dearly missed the community of in-person EBA events - a core value of the EBA! As such, annual inperson conferences will remain a mainstay of EBA’s business model going forward (provided it is safe to do so). Second, the last two years of virtual conferences have taught us important lessons. Virtual conferences and webinars are powerful tools to bring educational content to a bigger audience within banking and affiliate organizations, to encourage and include future EBA leaders, and to drive interest in the organization. For these reasons, the virtual conference and webinar offerings will become an important part of the business model moving forward. We will focus on increasing the value to membership by expanding the depth and breadth of educational and professional development opportunities and improving the quality of content. Finally, in an effort to increase bank/lender membership, we will be rolling out a promotional membership campaign for our financial institutions in 2022. Our goal here is to increase the reach of EBA and further position the organization as THE Industry Leader. Look for more information on this topic over the next few months. As we transition to this new business model, we will look for every opportunity to increase the value to membership and sponsors, including trying new things, and adapting to change. In closing, on behalf of the Board of Governors, I want to personally thank all the sponsors of the Winter Virtual Conference - your partnership is critical to our continued success. To all the volunteers of the EBA, thank you for all your important contributions. I look forward to seeing you at the Winter Virtual Conference, and inperson at the Summer Conference in Charlotte! David Lambert EBA President

EBA Journal – Winter 2022 Edition

The Value of EBA Membership Ruxandra Niculescu, CEO, Geographic Services Inc.

Although it may not always seem obvious, there is great value in being an EBA member. There are issues we deal with on a daily basis that make our work harder than it has to be; things that drive us crazy. Maybe it’s an email you dread opening, or a phone call that makes you groan. Preparing yourself for the impending headache you plunge forward because there’s nothing you can do about it. If that resonates even a tiny bit, know that there is something you can do. We all struggle with overcoming hurdles at work, and sometimes, the only thing holding us back is not having the necessary resources at our fingertips. More often than you might think, there are others right here within the Environmental Bankers Association (EBA) that are likely dealing with the same frustrations. We’re all familiar with the wealth of information available through EBA, but what we don’t always take advantage of is the fact that we are an organization of industry experts and professionals, and we don’t always realize the strength that lends to addressing struggles within our organizations. In July of 2021, EBA held one of its regularly scheduled Risk Management (RM) calls, this one titled Deep(er)-Dive into SBA SOPs 50 10 6, 50 57 2, and 50 55. The RM call was a follow up to a presentation held during one of the EBA virtual conferences and was intended to give everyone an opportunity to delve deeper into the SBA’s SOP, ask questions, and, hopefully, get answers. The discussion was lively, and, at times, got heated. As can be expected, it was no surprise that not everyone was able to voice their concerns. However, one question was put into the chat box, that some felt did not get as much visibility as was warranted. “What can we do about CDC ordered reports when they don’t meet the lender’s risk tolerance, but SBA has already approved them?” The question, while valid, was lost in the flurry of the chat box scrolling text and never made it to the presenter. Frustration was palpable. One EBA member decided the question really needed to make it to the SBA. After reaching out to the lender that had issued the question to make sure it was ok to pass along, an email was sent to the SBA appeals team asking for further clarification and asking for help on how to address an already approved SBA report.

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EBA Journal – Winter 2022 Edition

(continued) The Value of EBA Membership

By a stroke of luck, the SBA appeals team was having a meeting, and an impromptu conference call was held. During the call, it became clear that the SBA was not aware that some CDCs were ordering an environmental report, getting SBA approval, and then approaching lenders with the report. This obviously put the lender in a very uncomfortable situation, especially if their scope of work was not consistent with that of the CDC ordering the environmental report.

Once the issue was identified, an EBA Task Group was quickly assembled, and additional calls scheduled with the SBA. Options were considered and discarded, including adding a checklist to the SOP with a line item being “Has a lender been identified?”, and other possible stop gaps. During one of the calls, there was a minor revelation when it was pointed out that part of the problem lay with PLP loans, primarily from the California region. Again, options to address the issue were analyzed for a solution. Through the EBA Task Group, and in collaboration with SBA, it was determined that the heart of the issue stemmed from the SBA pre-approval process, which had been implemented as a result of the COVID-19 pandemic. The SBA had been considering halting the pre-approval process but there was no urgency to implement a change. When the EBA membership came together, voiced their concerns, and worked to find a solution, it prompted change. SBA obliged in halting the pre-approval process and the result was almost instant. Shockingly, this entire process took only two months. When dealing with a government agency, instituting change in that short amount of time is no small matter. The EBA was instrumental in making a change with widespread reach throughout the industry. To their credit, SBA was more than accommodating in working with the EBA and has since added training sessions for CDCs and lenders, stressing that collaboration is key for a smooth approval process. This specific incident was a huge success for all involved, and all it took was someone asking a question, for the motivated EBA membership to come together and help find a solution. So, the next time you’re at work and something drives you bonkers, consider whether you can tap into the resources available through EBA. Sometimes, all it takes is asking a question and having a dedicated support group.

EBA Journal – Winter 2022 Edition

2022: Setbacks and Resets in the New Year as Lenders Look Ahead with Optimism Dianne P. Crocker, Principal Analyst, LightBox Given the choppy start to the year, this was a more challenging market update to write than the one I did for the Summer edition. Typically, the start of a new year brings a round of predictions and optimism—and 2022 is no exception. This time last year, promising news of the long-awaited vaccine pointed to light at the end of the tunnel, and economic engines benefitted from pent-up demand after months of sheltering-inplace. Today, the market’s recovery marches onward, but the third quarter Delta variant and fourth quarter’s omicron remind us that the pandemic is not yet in the rear-view mirror. Despite uncertainty from the omicron variant and other risks, the forecast of one of rational exuberance, a combination of optimism led by healthy investment and underwriting activity but tempered by concerns about the COVID variant’s effect on the market and inflation. Activity across LightBox’s platforms in the environmental due diligence, valuation, lending, and investment sectors points to positive momentum moving into 2022, but uncertainty clouds the forecast. How long can the market sustain this pace? Where are the green shoots? When will the long-anticipated round of distressed assets surface? What about inflation and interest rates? What risks threaten to derail recovery? Below are my thoughts on how 2021 played out, and the mix of tailwinds and headwinds facing the market in the New Year.

U.S. Property Market Back in a Big Way In U.S. commercial real estate, there is a wide range of dynamics at play, but the good news is strong economic growth continues, and property deals, lending and Phase I ESA volume have all rebounded to pre-pandemic highs. By 3Q21, Real Capital Analytics reported that commercial property sales in the U.S. hit a record high, increasing 29% above pre-pandemic sales of 3Q19. Worth noting is that the rebound was led largely by single-asset sales, a better barometer of overall market health than bigger portfolio or entity deals. By November (the latest data available at press time), RCA reported that “the market is so strong that the volume through November alone is propelling the year to a record high” even before December data was in the books. Single-asset sales were $426.4 billion in 2021 through November, just below the historic high of $437.5b set in 2019.

Wherefore Art Thou, Distress? Opportunistic investors and fund managers with distressed asset opportunities in their crosshairs for 2021 were largely disappointed. One year ago, 2021 forecasts included aggressive predictions of distressed loan and property sales trigged by the widespread closures during the early pandemic. For various reasons, distress has yet to surface in any material way. One key factor is that compassionate capitalism kept distress at bay. Historic federal relief like the CARES Act provided much-needed relief to tenants and property owners. In fact, according to Spencer Levy, CBRE’s Global Chief Client Officer and Senior Economic Advisor, “The landlord/tenant relationship at beginning of COVID was more cooperative than ever before. They now have more of a partnership relationship which is a cause for optimism in the market right now.” (continued)

EBA Journal – Winter 2022 Edition continued: 2022: Setbacks and Resets in the New Year as Lenders Look Ahead with Optimism

The willingness of lenders to meet borrowers halfway by exercising forbearance and extending or restructuring loans to offer relief to struggling borrowers kept distress levels to date lower than initially expected. Although distressed deals are happening, the price decline expectations have moderated. As a result, distressed asset sales are still minimal. For historical reference, six quarters into the Great Financial Crisis, distressed asset sales represented 7% of the market and eventually rose to a 20% share of the total. In 3Q21, 18 months after the onset of the health crisis, distressed asset sales represented just less than 1% of total property sales. In 2022, distress will likely surface with properties struggling, but forecasters have tempered expectations compared to the start of 2021. Contrary to forecasts early in the recovery, it seems less likely that there will be a systematic decline in CRE prices like we saw after the GFC. Part of the reason is that lenders and investors in general were more well behaved prior to the onset of COVID. The widespread availability of debt capital also means there is less pressure on owners to sell at bargain basement pricing.

CRE Lending in the Age of Uncertainty

A few trends in commercial real estate lending worth noting. Robust refinancing activity helped compensate for the slower pace of transactions early in 2021, and lending levels have returned to pre-pandemic levels, with the strongest activity in multifamily and industrial. Collections across asset classes remain high, and commercial delinquencies continue to decrease across all property types but loan performance continues to be very property type- and metro-dependent. Also notable is that regional and community banks were the single largest source of commercial mortgage financing in the first half of 2021, capturing 22% of the market as these smaller banks experienced less of a pull-back in lending during the health crisis than their larger counterparts. CMBS originators collapsed in 2020 in the wake of COVID-19 but have now recovered to previous levels. Although the credit market risks of 2020 caused private equity lenders to pull back, they are now actively back in the game.

Market Confidence Elevated Based on LightBox’s latest Market Confidence Index, based on a broad survey of commercial real estate professionals across the U.S., the index now stands at 149.2, slightly lower than 154.4 in 2Q21, but still well above the Q2’20 low point of 114.1 (adjusted to an April 2020 baseline of 100). The index tracks overall confidence levels based on results from three key barometers: respondent’s views of the overall CRE market, the pace of their own activity, and staffing plans. While the third quarter results reflect fewer respondents experiencing “significant increases” in their business as the pace of recovery slows, the percentage hiring employees now stands at its highest level since April 2020. Notably, most respondents are operating at full or near full capacity relative to pre-pandemic levels, a significant improvement over mid-2020 results.

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EBA Journal – Winter 2022 Edition continued: 2022: Setbacks and Resets in the New Year as Lenders Look Ahead with Optimism

Cities Remain a Draw Even As Secondary Markets Gain Traction

Today’s market is characterized not only by strong differences across asset class and sub-asset class, but also by geographic area. One pandemic-led trend with implications for the future of real estate is that the health crisis drove a migration into smaller, secondary cities. Those cities experiencing the strongest population bursts will drive redevelopment and investment over the near-term, particularly in secondary metros in need of infrastructure spending. The LightBox ScoreKeeper model tracks trends in the volume of environmental due diligence across the U.S., and its output is widely viewed as an early indicator for where commercial real estate investment activity is increasing—or losing steam. An analysis of year-end Phase I ESA activity by metro reveals that the 20 strongest markets in the U.S. last year were led by Las Vegas, Houston, and Miami with growth well above the U.S. average of 41% growth over 2020. Tampa and Orlando round out the top 5, making Florida the state accounting for three out of five of the year’s hot spots. Also notable is that 9 of the 20 strongest metros last year are smaller, secondary metros (denoted with an * in the accompanying graph). Austin, Nashville, and Raleigh are on the list, and examples of strong emerging cities that are competing with more traditional magnets for top technology talent, business headquarters and development dollars. Interestingly, the three biggest Phase I ESA markets (i.e., New York City, Los Angeles and Chicago) didn’t make the cut, with growth rates last year of 14%, 18% and 25%, respectively. The data suggests that smaller markets are recovering very well, and these “new kid on the block markets” (to use a term Spencer Levy coined) are competing with the larger gateway markets. Levy is bullish on the future of cities, however, given their draw for live-work-play communities. While dense urban areas experienced an outflow of residents during the pandemic, “the numbers also support an inflow of educated, productive, talented professionals, and those are the ones who drive CRE demand,” Levy noted.

EBA Journal – Winter 2022 Edition continued: 2022: Setbacks and Resets in the New Year as Lenders Look Ahead with Optimism

The Headwinds and Tailwinds of 2022

The list of tailwinds boosting the market right now starts with the sheer brute power of the U.S. economy, one that keeps performing no matter what this health crisis throws at it. Also boosting the market are the healthy levels of debt and equity capital, still-low interest rates and underwriting standards holding firm at disciplined levels. Strong attention on reuse and redevelopment, especially in high population growth areas, will drive activity in 2022. As the tone of conversation shifts to the postCOVID future, the market tone is one of optimism with a nod toward market risks and uncertainty. On the headwinds side of the ledger, and thoughts of what could derail recovery, first and foremost is omicron which will likely continue to disrupt market activity well into the first quarter, but ultimately should prove of little consequence to commercial real estate in 2022 for the year as cases peak and then decline. The risk posed by new variants or other complicating factors remains, and until we finally emerge from the pandemic tunnel, the forecast is clouded. Rising inflation is also a notable 2022 headwind. And while it should start to slow as the year progresses and inventories are built back up, inflation will remain elevated, increasing the risk that monetary policy could tighten too quickly, slowing the economy too much. Third, the Fed is announcing three to four hikes in interest rates this year so rises in the cost of capital are coming. These increases have been long expected however and most outlooks have already accounted for a higher rate environmental and some inflation. If rate hikes are larger than expected or inflation more dramatic, capital markets could start to retreat. Emerging from the pandemic, lenders, investors and other CRE professionals will be more focused on technology given increasing pressures on efficiency and accuracy to support property transactions in an uncertain and competitive market. New best practices are being established as financial institutions centralize vendor management; jointly procure environmental due diligence, appraisal, and other underwriting functions; and integrate previously disparate functions. Pricing and turnaround time pressures for both Phase I ESAs and appraisals continue to be intense, with lenders starting to view speed more favorably than price as a procurement consideration. Last, is that climate risk awareness is now the number one issue in commercial real estate, according to the latest ULI/PwC Emerging Trends report. Bank regulators are turning an eye toward the risk banks face given the increase in climate-driven events like flooding, wildfires, hurricanes, and tornadoes. First Street, one of LightBox’s data partners, just completed its first analysis to qualify the dollar value of commercial real estate at risk from flood, one of the largest national disasters in the U.S. Their results of the analysis indicate that there are currently 729,999 retail, office, and multi-unit residential properties at risk of annualized flood damage in the contiguous United States, and the absolute count of buildings at risk will grow by about 8% by the year 2052 as a result of climate change. The top five metros with the highest aggregated total structural damage costs at commercial properties are Miami, New York, Pittsburgh, Boston, and Houston. Climate change is likely to be a strong theme, not just for 2022 but for the next decade as awareness grows and the market recognizes the risk to properties. Despite concerns about the impact of the omicron variant, inflation, interest rates and other risks, market barometers point to a choppy but still strong start to 2022 across the environmental due diligence, lending, and investor segments. The major topics I’m watching are climate risk, technology adoption as a competitive differentiator, and infrastructure spending, all of which have strong implications for opportunities in CRE.

Ms. Crocker’s bio can be found online at https://www.envirobank.org/page/CrockerBio 11

EBA Journal – Winter 2022 Edition

No Further Action Letters - A Trap for the Unwary! Bill Tryon, Chief Strategy Officer – Principal; and Steve Luzkow, Technical Director; Partner Engineering and Science, Inc. It can be tempting to hope that a no further action (NFA) letter issued by a regulatory agency is proof that a thorough investigation has been performed to address all possible contamination at a property and that related environmental liabilities and limitations can be disregarded when evaluating a property. In some cases this may be true, but it's impossible to be sure without a deeper dive. Changes in investigation and cleanup criteria; property use; satisfaction of closure requirements and continuing obligations; and related impacts on marketability and value can significantly affect investment and underwriting decisions. Some of these considerations are evaluated within the Phase I scope of work, but others require an understanding of the overall context of a transaction or even may even require additional research or inspection. Whether or not a Phase I ESA classifies the related release as a Recognized Environmental Condition (REC), Controlled REC, or Historical REC, an evaluation of NFA letters within the context of a specific transaction is essential to managing long term impacts. EBA members can download more comprehensive guidance at the EBA website (Tip Sheet 402), but for those short on time, the following outline should provide a useful starting point.

Documentation As a starting point, obtain a copy of the NFA letter and closure report. Copies of prior assessments such as a remedial action plan can also be useful. Depending on closure requirements, it may also be necessary to obtain copies of deed restrictions, maintenance plans, inspection records, and other evidence of post-closure compliance. • Be sure the NFA letter and closure reports are not in draft form. • Where activity and use limitations or engineering controls apply, request copies of related documentation such as title records, management plans, and inspection records. •

Contaminants of Concern – Over time, the contaminants considered during evaluation of a property may change. As a result, the NFA letter may not conform to current requirements. • Identify contaminants considered at the time of closure. • Identify contaminants typically considered in similar closure investigations. • Evaluate whether additional assessment of contaminants not previously considered is warranted.

Media Affected – NFA letters can sometimes be limited to soil or groundwater, and the consideration of vapor impacts was rare in investigations performed prior to 2000. Documents should be evaluated to assess the handling of impacts to soil, groundwater, and vapor. • Review investigation and cleanup activities to verify all appropriate media have been considered. (continued)

EBA Journal – Winter 2022 Edition

continued: No Further Action Letters - A Trap for the Unwary!

Cleanup Thresholds – Where concentrations left in place exceed current cleanup thresholds

additional evaluation may be warranted. • Identify contaminants of concern (COCs) that were considered during closure. • Identify concentrations of each COC left in place at the time of closure. • Identify current cleanup thresholds for each COC considered during closure. • Evaluate whether concentrations left in place exceed current cleanup thresholds. • Identify current COCs that were not considered during closure and evaluate the need for additional investigation or cleanup.

Institutional and Engineering Controls (IC/ECs) – NFA letters may not be valid if institutional controls or engineering are not maintained. • Review the NFA letter and closure report to identify institutional controls and engineering controls that are: • Expressly required as a condition of the NFA; • Implied based on cleanup to commercial/industrial use; and • Implied based on other criteria that do not support unrestricted use. • Evaluate conformance with express and implied IC/ECs. • When a change in use is proposed, evaluate whether changes are consistent with identified IC/ECs.

Jurisdiction – In some states, more than one agency may have jurisdiction over cleanup requirements.

As a result, an NFA letter may not address all possible requirements that apply to the property. Depending upon the information available and objectives of the review, an evaluation of additional jurisdictional requirements may be warranted.

Valuation and Marketability – Since a closure letter is not necessarily a clean bill of health, the value and marketability of properties can be affected. Appraisers and other market experts may be able to provide meaningful guidance regarding impacts to the highest and best use, marketing time, etc.

Remaining Areas of Concern – NFA letters typically address specific areas of concern; however, underlying reports may include information concerning other issues in relation to the property. For example, an NFA letter for a sump pit may provide no comfort regarding a release from underground storage tanks in another area of the property; however, groundwater investigations conducted during closure of the sump pit may be useful in evaluating groundwater impact from the underground storage tanks.

NFA letters can be incredibly useful in bracketing risks when evaluating properties, but careful review can be critical to the success of any investment. When in doubt, reach out to your EBA colleagues to talk through thorny issues. Most of us enjoy the opportunity to dig into issues like this, which can make all the difference. 13

EBA Journal – Winter 2022 Edition

Legal Risks Related to Foreclosure Jimmy Kirkland, Partner, Womble Bond Dickinson (US) LLP; Brenna M. Durden, Shareholder, Lewis, Longman & Walker, P.A.; and Jessica Crutchfield, Shareholder, McRoberts & Hartis, P.C. Lending money on real property and taking a security interest generally does not result in direct lender liability for contamination that is present on the property unless the lender acts like a property owner or becomes an operator by participating in the management of the business. Prior to foreclosing on property and becoming the owner, lenders must carefully identify and evaluate environmental issues and the federal and state legal requirements that may be applicable to the property and any activities that have been conducted on the property subsequent to the loan. Lenders can be held liable for contamination on foreclosed property if they do not carefully follow the requirements contained in the statutes for lenders to avoid being an owner or operator of the property and document their actions. Additionally, lenders need to be aware that there are state and federal environmental statutes that impose liability that contain no lender liability protections. This article, which is part II of a three-part series on foreclosure, will address frameworks for federal, state and common law liability, and protections available to address liability in the context of foreclosure.

A. Federal Statutory Liability CERCLA and secured creditor exemption

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes liability that is strict (liable without fault) and joint and several (one party can be liable for the entire cleanup) and applies to any “person” that is a current or former owner of a property where there has been a release of a CERCLA hazardous substance. Under CERCLA, an owner or operator of a property can be held liable for remediation costs even if the contamination pre-dated its ownership or operation on the contaminated property. CERCLA includes an exemption from liability for secured creditors (lenders) that provides liability protection for both pre and post foreclosure of collateral property. 42 U.S.C. § 9601(20)(A). This exemption is applicable if the secured creditor carefully follows the requirements set out in the statute and regulations. Failure to follow these requirements can put a lender in the position of being solely responsible for all costs of site cleanup. CERCLA also provides an exclusion for petroleum which is often associated with collateral properties. 42 U.S.C. § 9601(14). Since petroleum is not a CERCLA hazardous substance there is no CERCLA liability for releases of petroleum and petroleum products. However, the CERCLA petroleum exclusion may not apply to petroleum that that has been contaminated with hazardous substances or waste petroleum such as used oil, or constituents of petroleum. Prior to foreclosure, lenders can be held liable under CERCLA (and other environmental statutes) when they are found to act more like an owner or operator by participating in the management of the property. 42 U.S.C. § 9601(20)(F). Generally, as long as the lender does not participate in the management of the site, the lender will not be liable. The lender will not lose protections if it engages in financial or administrative activities of the borrower’s operations. 42 U.S.C. § 9601(20)(G). A lender must not exercise decision-making over day-to-day environmental compliance that results in taking responsibility for hazardous substances.

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continued: Legal Risks Related to Foreclosure

The CERCLA secured creditor exemption also provides that after foreclosure the secured creditor is not liable under CERLCA as an owner, provided the lender takes “reasonable steps” to divest itself of the property “at the earliest practicable, commercially reasonable time, on commercially reasonable terms.” Generally, a lender can maintain business activities and close down operations at a property and take actions to preserve the property for sale. 42 U.S.C. § 9601(20)(F)(ii). EPA guidance states the property should be divested within 12 months of foreclosure. Efforts to sell the property should be carefully documented. Additionally, a lender must not reject a bona fide offer of fair consideration or outbid other bidders. See https://www.epa.gov/sites/default/files/documents/lender-liab-07-fs.pdf for more information.

Resource Conservation and Recovery Act

RCRA provides comprehensive regulation of the handling, storage, treatment, transport, and disposal of hazardous and nonhazardous waste, including petroleum-related materials. 42 U.S.C. §6901, et seq. RCRA does not include a broad liability exemption for lenders for hazardous waste activities. Most of the RCRA hazardous waste regulations are not likely to apply to lenders unless they engage in managing the waste operations at a facility. However, if the facility that is being foreclosed on generates hazardous waste which will be present at the time of foreclosure, the lender may be responsible of the proper management and disposal of those wastes. RCRA contains a secured creditor exception for underground storage tank (“UST”) liability which provides that a secured creditor who holds indicia of ownership primarily to protect a security interest, does not participate in the management of an UST and is not engaged in petroleum production, refining and marketing is not an owner or operator. 42 U.S.C. 6991b(h)(9). The liability protection is limited to USTs containing petroleum products and does not extend to USTs used to store hazardous substances or hazardous wastes (which would fall under CERCLA). Post foreclosure, the lender will not be considered an operator if a third party assumes control of or takes responsibility for the daily operation of the UST system and complies with UST regulatory requirements. 40 C.F.R. §280.230(b)(1). However, if the lender assumes responsibility for the operation of the USTs, to maintain the secured lender exemption the lender must empty the UST system within 60 calendar days following foreclosure and “permanently” or “temporarily” close the UST or UST system to avoid qualifying as an UST operator. 40 C.F.R. §280.230(b)(2) and (3). RCRA also contains a citizen suit provision. Any “person” is authorized to bring a lawsuit to obtain a court to address contamination that “may present an imminent and substantial endangerment to health or the environment.” 42 U.S.C. §6972(a)(1)(B). Such a lawsuit may be brought “against any person . . . who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal” of waste. Id. The citizen suit statute contains no exemption for lenders. Although courts have broadly interpreted the phrase “contributing to,” the cases hold there must be some affirmative “causal relationship” or “causal connection” between the contamination and the liable party. See, e.g., Forest Park National Bank & Trust v. Ditchfield, 881 F.Supp.2d 949, 973 (N.D.Ill. 2012); Sycamore Industrial Park Associates v. Ericsson, Inc., 546 F.3d 847, 854.

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Clean Water Act

The Federal Clean Water Act (“CWA”) regulates the discharge of pollutants into the Waters of the United States unless a permit has been obtained. The type of permits required under the CWA include permits for industrial discharges, stormwater permits and discharges to jurisdictional wetlands. Stormwater permits and Section 404 permits are required for developers that engage in land disturbing activities and activities that impact wetlands. Failure to comply with the CWA and permits can result in significant civil penalties and civil suits by regulatory agencies and citizens. The CWA does not contain a lender liability exemption. Therefore, foreclosing lenders are responsible for complying with the CWA regulations and permits. The lender may also be responsible for pre-existing violations. This may be a particular consideration for construction projects. If there are CWA requirements for collateral, lender should evaluate compliance and understand cost and steps to get into and maintain compliance. Lender will likely avoid holding CWA permits and may consider facilitating permit transfer directly to a purchaser without taking title or involving a receiver to hold permits. The CWA is implemented by all states except Idaho, Massachusetts, New Hampshire, and New Mexico. Many states have issued guidance discussing lender liability under the CWA on foreclosed properties. For example, in Georgia, a lender that forecloses on a property that is a construction site must file a Notice of Intent to be covered under the general stormwater permit by the earlier of 7 days prior to beginning work on the construction site or within 30 days of acquiring title. See Georgia General NPDES Permit No. GAR100001 – Construction Activity at https://epd.georgia.gov/forms-permits/watershed-protectionbranch-forms-permits/storm-water-forms/npdes-construction-storm. Prior to foreclosure, a careful review of all state permit and regulatory requirements should be conducted to determine and evaluate the obligations of a lender that forecloses on property subject to the Clean Water Act.

Other Federal Statutes

There is no secured creditor protection under the Toxic Substance Control Act for polychlorinated biphenyls ("PCBs") or for complying with the lead-based (“LBP”) disclosure rules

B. States Laws Many states have enacted state environmental laws that impose environmental liability risks similar to CERCLA for lenders who foreclose and repossess property used to secure loans. CERCLA and RCRA do not preempt state laws governing the cleanup of hazardous substances that may be more stringent or have a different liability scheme than the federal requirements. The following summarizes a few examples of state liability schemes: CALIFORNIA The California equivalent to CERCLA is the Hazardous Substances Account Act (“HSAA”) codified at California Health & Safety Code, Section 25300, et seq. Generally, lenders who maintain indicia of ownership primarily to protect a security interest or who acquire property through foreclosure or a deed in lieu are exempt from: statutory liability; being required to take removal or remedial action; and paying penalties or fines (subject to certain conditions). The exception to the liability, set forth at §25548, HSAA, is triggered when a lender “made, secured, held or acquired the loan or obligation primarily for investment purposes.” Section 25548, HSAA, further states that “the exemption will not protect lenders or fiduciaries in transactions that are structures for the purpose of evading liability for hazardous material contamination.” Generally, active marketing to divest the asset should be the standard for lenders to avoid the application of this exception.

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FLORIDA

In addition to defenses generally available in Florida to all persons for acts of war, of government, of God or of third parties (provided certain caveats can be established) for hazardous substances and hazardous wastes as set forth in Chapter 403, Florida Statutes, express lender liability defenses are set forth in Chapter 376, Florida Statutes for “petroleum” and “petroleum products” contamination (§ 376.308(3), F.S.). The defenses include: (1) a lender serving as a trustee, personal representative or other type of fiduciary, provided the lender has not otherwise caused or contributed to the discharge; (2) a lender which holds indicia of ownership in the site to protect a security interest and has not engaged in decision-making control over the site operations (particularly with respect to the storage, use or disposal of petroleum or petroleum products) and has not caused/contributed to the discharge, although the lender may compel the borrower to comply with environmental regulations and may act to prevent or abate a discharge; and (3) a lender which has foreclosed and seeks to divest the asset at the earliest possible time, provided the lender has not undertaken management activities beyond those necessary to protect its financial interests, to effectuate compliance with environmental regulations, or to prevent or abate a discharge.

GEORGIA

The Georgia Hazardous Site Response Act excludes from the definition of owner or operator any person who holds indicia of ownership primarily to protect a security interest in a facility or who acts in good faith solely in a fiduciary capacity provided such persons did not actively participate in the management, disposal or release of hazardous wastes, hazardous constituents or hazardous substances from the facility. Ga. Code Ann. §12-8-92(7) There is no definition of what constitutes “actively participating in management” nor are there any rules for foreclosing on property.

ILLINOIS

Under the Illinois Environmental Protection Act (Illinois Act). 415 ILCS 5/22.2, et seq. liability is generally more limited because only the state, and not private parties, can bring cost recovery claims. the Illinois Act provides protection for lenders through its definition of “owner or operator.” Rather than a secured creditor exemption, the Illinois Act provides that a “financial institution” is liable only under a limited set of circumstances. Additionally, qualifying lenders under the Illinois Act will be exempt from Illinois Act liability if they qualify for the Asset Conservation Act’s exemption from CERCLA.

MISSOURI

Missouri’s Debtor-Creditor Relation law includes liability protections similar to CERCLA for secured creditors. Prior to foreclosure, lender can generally work to protect the security interest, but not as a manager of the property. Mo. Rev. STAT. § 427.021 (2)(d) (1994). Participating in management does not include taking title to the property through foreclosure or monitoring the business. Mo. Rev. STAT. § 427.021 (3) (1994). After taking title, the lender or representative does not take on responsibility for cleanup costs, response costs, or third-party liability arising from contamination caused prior to title vesting in the lender or after so long as the lender does not “knowingly or recklessly” cause further contamination or allow another party to further contamination knowingly or recklessly. Mo. Rev. STAT. § 427.031 (2) (1991). Finally, the lender must make “reasonable efforts to resell” the property. Id. at 427.031 (3). WISCONSIN Lenders and representatives that meet the conditions established in Section 292.21, Wisconsin Statutes are not responsible for the remediation of a hazardous substance discharge per s. 292.11, Wis. Stats., Hazardous Substance Discharge Law commonly known as the "Spill Law." Lenders can obtain an exemption from the Spill Law, and potentially other environmental laws, if they comply with the terms and conditions listed in Wis. Stat. § 292.21.

Note that state equivalents to RCRA, CWA and other liability schemes may not contain secured creditor exemptions.

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STATE PROPERTY TRANSFER STATUTES Lenders need to be aware that a number of states have enacted statutes that affect the transfer of industrial transactions. These statutes generally require the disclosure of environmental conditions or activities when the property is transferred. These statutes may also require certain actions to be taken such as investigation of property conditions, a Phase I and submission of reports to the state environmental agency. For example, under Massachusetts law, a foreclosing lender is expressly required to take certain actions if it obtains knowledge of a release of hazardous substances after it takes title to real property. Other states with property transfer statutes include: New Jersey, Connecticut, Indiana, Illinois, Michigan. These statutes can be very complex so lenders should consult with legal counsel to ensure compliance and consider the requirements for a future buyer of the property, even if the lender is exempt from such requirements.

LOCAL AUTHORITIES Lenders should also be aware that some states delegate authority to local agencies. When evaluating environmental risk, lenders should have a clear understanding of which agency has jurisdiction and the applicable systems and requirements.

C. COMMON LAW

In addition to statutory liability, lenders should consider the risk of common law causes of action including private nuisance, trespass, and negligence. Private nuisance is essentially an unreasonable interference with another’s use and enjoyment of land. Similarly, trespass is a physical, intentional, and voluntary unauthorized entry onto plaintiff’s property. Nuisance and trespass claims do not require the defendant to be at fault. Negligence requires that the defendant owed a duty of care to the plaintiff, defendant breached the duty, and the breach caused plaintiff to suffer injury. A classic example of a common law environmental claim arises from a property causing contamination to migrate onto a neighboring property, or a tenant claiming personal injury due to elevated contamination at a leased property. Many poly- and perfluoroalkyl substances cases are being brought under common law theories where states have not developed statutes. By its nature, common law liability can be less predictable and harder to quantify than statutory liability. Lender may consult litigation counsel to better evaluate common law liability.

I. Defenses and Protections A. CERCLA Defenses In addition to the secured creditor exemption available to lenders set forth above, most state and federal environmental statutes contain narrowly drawn defenses to environmental liability that are generally limited to (1) an act of God; (2) an act of war; (3) an act or omission of a third party under certain circumstances. The third party defense is the most common defense. To establish this defense, the defendant claiming the defense must provide evidence that the release was caused by an unrelated third party; the defendant exercised due care with respect to the hazardous substance concerned; and the defendant took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions. In addition, the bona fide prospective purchaser (“BFPP”) defense may be available to a person acquiring property that knows or has reason to know of contamination if they complete all appropriate inquiry (a Phase I ESA) prior to acquiring the property and satisfy continuing obligations which includes exercising appropriate care with respect to hazardous substances found at the property by taking reasonable steps to stop any continuing release and prevent any threatened future release. See https://www.epa.gov/enforcement/common-elements-and-other-landowner-liability-guidance.

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B. Common Law Defenses

With regard to common law claims, a defendant can both show that plaintiff failed to satisfy the element of the cause of action and assert various defense. Defenses to common law claims include, among others, statute of limitations, preemption, and for negligence, contributory negligence. Statutes of limitations generally range from two to five years; however, the limitations period may not begin until the nuisance or trespass cease. A defendant may claim that the plaintiff’s claim is preempted by the defendant’s compliance with a federal statute. However, many federal laws include language that the statute is not intended to preempt state laws, so in the absence of a direct conflict the federal law can likely not be used as a shield to liability. The defense of contributory negligence bars recovery for a plaintiff to the extent the plaintiff is responsible for the injury suffered. This defense may be available for a claim made by a plaintiff that is also at fault to some degree, such as a tenant.

C. Cleanup Funds

In addition to considering defenses to direct liability as owner of property, lenders should identify and evaluate resources to address the impact to the value of the property caused by contamination, including cleanup funds. Insurance could include state-run programs for leaking petroleum USTs or dry cleaners, or private insurance. State cleanup funds vary widely. Some states have well-funded programs, while others are nonexistent. According to EPA, 36 states currently have active funds to pay for new and past petroleum UST releases. https://www.epa.gov/ust/state-financial-assurance-funds Generally, claimants for funds must be a current or past owner or operator of a UST. Many programs apply to tanks in use during a certain period of time. Some funds do not cover releases that occurred before the UST was covered by the state fund. Programs have limited funds and most rank cleanup priority such that it may be years before a case that is eligible and accepted into the fund is actually cleaned up. The fund will generally pay for corrective action costs including investigation, remediation, and monitoring. Available funds for a cleanup are capped and a deductible is generally applicable. Similar to petroleum USTs, many states have funds to cleanup contamination from dry cleaners. According to a 2016 Environmental Bankers Association presentation, 13 states have dedicated dry cleaning funds. The dry cleaner fund may require that the dry cleaner has been registered with the state regulator, or it may only be available to active dry cleaners. Some programs provide reimbursement for work performed; other have state-led cleanup. Like petroleum UST funds, funding is limited and receiving funds or cleanup happening may take years. Needless to say, a fund may be theoretically available, however, unless a site is already accepted into a fund with cleanup underway, a lender may not want to rely upon the fund to take action in the near future.

D. Insurance

In addition to protections through state cleanup funds, environmental insurance may be in place to pay for cleanup. Since “you cannot insure a burning building” the policy will generally be one placed at origination or as part of the borrower or a tenant’s risk management policy. In other words, it is too late to insure the risk once a problem is confirmed. Two main types of policies may be available – a policy in which lender is the first named insured (and borrower has no coverage) (“lender” policy) and a policy in which borrower is the first named insured and lender is an additional named insured (pollution legal liability or “PLL” policy). A lender environmental insurance policy will generally pay for cleanup if there is a loan default and contamination at the property. There is also generally coverage for direct third party bodily injury and property damages claims, attorney fees and defense costs, as well as ancillary coverages. Some policies pay the lesser of the cleanup costs or the outstanding loan balance (up to the policy limits). Some carriers will agree to assign the policy to a purchaser of the note if the lender is doing a note sale rather than foreclosing; the coverage may facilitate the note sale without requiring lender to foreclose.

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A PLL policy is typically triggered merely by contamination (no loan default is required), however some policies are modified by endorsement to require additional triggers for coverage. For instance, a “government mandate trigger” requires a directive to cleanup contamination rather than only the presence of contamination. These polices also provide coverage for third party bodily injury and property damages claims, attorney fees, defense costs, and ancillary coverages. Since the borrower is generally the first named insured on the policy, the borrower must make the claim. However, many policies placed with lenders in mind include an endorsement assigning the policy to lender upon default, so that lender is not at the mercy of the disgruntled borrower and lender can control the claim All policies have exclusions, deductibles, and limits. Therefore, lenders should make a claim on the policy and ensure it is accepted by the carrier and that the likely cleanup costs have been evaluated in light of the limits prior to taking the step of foreclosing.

E. Receiver and SPE

When borrowers default on loans, lenders are often concerned about risks associated with the property resulting from the mismanagement of the property, loss in value of the collateral property and potential environmental liability. Many lenders are reluctant to foreclose on properties with environmental issues out of concern for becoming a responsible party and becoming liable as an owner or operator. It is common early in the foreclosure process for lenders to seek a solution for avoiding potential environmental liability by requesting a court to appoint a receiver to take control of the property away from the borrower. A receiver will manage, control, protect and preserve collateral for the benefit of both the borrower and the lender. A receiver typically has authority to conduct inspections of the property, to assess the environmental conditions and to implement remedies. For example, a receiver can remediate the property to make it marketable prior to foreclosure and/or to have the receiver sell the collateral in order to avoid the lender being on the chain of title and becoming a party liable under environmental law. Receivers act as an officer of the court and are not subject to liability as an owner or operator. Additionally, the lender is not liable because it is also not an owner or operator of the property. One lender advised that their Asset Resolution Group has used receiverships in the past, albeit on rare occasions for numerous reasons which include maintaining and protecting its public image, logistics, and/or liability. There may be situations where taking title to a property could hurt the lenders reputation or the lender is a high-profile civic organization, and active in the community, and therefore a receiver is put in place to manage and liquidate the asset. There are also situations where the property is significantly contaminated, and the lender does not want to be in the chain of title and/or have concerns about direct liability. A receiver can be effectively used to manage the risks, work with regulatory agencies, and dispose of the asset. One lender advised of a construction loan default about ten years ago that resulted in numerous issues that a receiver would have been a great approach for the lender. The lender took title to a 400 plus acre subdivision construction project, with almost 200-acres clear cut. The borrower abandoned the property, leaving the land scared from the shutdown of the construction project. There were over 40 storm water catch basins onsite, and very little vegetation to hold the soils in place. A local motorcycle shop posted a trail map to this construction project, and every time the lender toured the property there were fresh tracks from nearby kids using the catch. This site needed to be secured, access restricted, and security hired to patrol in ATVs to properly manage the site. The bank owned this site for approximately a year, and fortunately gained control of the property, the erosion issues, and brought the site into compliance with regulators. But this would have been a great situation to have a receiver assigned to further protect the bank, if we only knew what we really had before taking title. Another option to avoid liability is for a lender to foreclose and transfer title to a special purpose entity which is a lender affiliated entity. The lender will typically continue to hold the security instrument. Unless the loan was also transferred to the special purpose entity, it may not qualify for the CERCLA lender protections since it does not meet the definition of a lender under CERCLA.

F. Other Protections

Lender should be sure to review the loan documents to determine what contractual provisions and recourse are available such as environmental indemnities, personal guarantors, and insurance requirements.

II. Conclusion

When facing foreclosure, navigating environmental risk can seem daunting to the lender. Risk cannot be eliminated, however, most loan document and many statutes provide strong protection to lender from direct liability. Evaluating the impact of contamination on the value of the collateral is often as much of a challenge as evaluating direct liability. Lenders should be prepared to engage a strong legal and environmental consulting team to systematically evaluate both the environmental legal and business risks. Accordingly, in part III of this three-part series on foreclosure, environmental consultants will provide guidance on pre-foreclosure diligence. 20

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“All” Means “All”: Recent Case Underscores Need for Strict Adherence to EPA Requirements for All Appropriate Inquiries Erika Haberlen, Partner Engineering and Science, Inc. Strict, joint and several liability for environmental contamination can have devastating impacts for property owners and tenants, but a little up front due diligence can help protect participants in commercial real estate transactions. In 2005, the U.S. Environmental Protection Agency (“EPA”) finalized its all appropriate inquiries (“AAI”) rule under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). The rule established the standards landowners and purchasers must meet to qualify for certain “innocent owner” protections under CERCLA, a concept which also extends to operating tenants. To satisfy the AAI rule, lenders, borrowers and other operators and tenants involved in commercial real estate transactions typically rely on Phase I Environmental Site Assessments (“ESAs”) completed in accordance with the ASTM International Standard E1527 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” If strict adherence to the AAI requirements has started to wane over the intervening decade and a half, a recent decision by the 7th Circuit Court of Appeals serves as a reminder that courts have required—and will continue to require—strict adherence. Purporting to comply with ASTM or AAI requirements is not enough. In Von Duprin LLC v. Major Holdings, LLC, the owner of two contaminated commercial properties completed a Phase I ESA in substantial compliance with the ASTM standard except: one Phase I ESA failed to include adequate attestations about the environmental professional’s qualifications; and at the other property, the owner failed to conduct a Phase I ESA within 180 days prior to first operating the property. The court held that both shortcomings threatened to eviscerate the property owner’s potential CERCLA defenses, and sent the case back to a lower court for further proceedings. The case is unique, if at all, only in the small extent of deviation required to wipe out protection. A number of courts over the years found environmental diligence efforts deficient when there was an obvious failure, such as a failure to conduct a site visit or review a property’s former uses. The scrutiny the Von Duprin court applied to the Phase I ESA’s seemingly technical timing and certification requirements reflects a heightened focus on oft-ignored AAI components, and serves as a reminder of the critical importance of strict compliance with the AAI rule.

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continued: “All” Means “All” Though most users rely on experienced consultants and legal counsel for compliance with the AAI standard, outlined below is a quick checklist of some of the more commonly “missed” requirements, to the extent you want to look over a shoulder. First, certain elements of the Phase I ESA must have been conducted not more than 180 days before purchase or lease of a property. These include: • • • •

Interviews; Review of government records; Inspections of the subject and adjoining properties; and A declaration of the environmental professional.

Other elements of the Phase I ESA must have been conducted within one year of the transaction. Note that timing requirements refer to the date of the specified activity and not the date of the report, often written days or weeks later. Beyond these time sensitive requirements, the following must be included in every Phase I ESA: An opinion as to whether conditions indicative of a release or threatened release were identified; • Identification of significant data gaps (missing or unattainable information that affects the ability to identify releases or threatened releases); and • A declaration that the consultant satisfies the AAI definition of environmental professional, and that inquiries were performed in accordance with 40 C.F.R. Part 312. •

While the above are undertakings of your outside advisors, AAI also requires purchasers and tenants to participate and independently search for recorded environmental cleanup liens and to consider whether the purchaser or tenant has reason to know of a release as a result of specialized knowledge, commonly known and reasonably ascertainable information, or reduced purchase price. As the Von Duprin litigants learned, these simple steps—which typically add only minimal cost and time to a purchaser’s diligence—are critical to avoid costly consequences down the road. REERENCES: ASTM recently updated this standard to E1527-21, which currently awaits EPA’s formal recognition that it satisfies the AAI rule. “ASTM E1527-21: Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” ASTM INT’L, https://www.astm.org/Standards/E1527.htm (last visited Nov. 16, 2021). Von Duprin LLC v. Major Holdings, LLC, Nos. 20-1711, 20-1793, 2021 U.S. App. LEXIS 26726, *769 (7th Cir. Sep. 3, 2021). Note that the second claim arose in the context of the purchase of a location the company formerly leased. The court determined that because the owner’s operation and occupation of the site began with the prior lease, the Phase I ESA needed to occur prior to that time (regardless of when the actual purchase occurred). See, e.g., U.S. v. Serafini, 791 F.Supp. 107 (1990) (AAI deficient due to failure to conduct a site visit).

EBA Journal – Winter 2022 Edition

An ASTM Standard for Climate Resilience – Progress Report Holly Neber, Task Group Chair, CEO of AEI Consultants Those of us in the property due diligence fields have seen firsthand how regulatory requirements and risk management needs have influenced standard property assessment and disclosure processes over the last few decades. In most US-based commercial real estate transactions, it is considered standard to conduct a Phase I Environmental Site Assessment. Other examples of standard physical risk assessments that are already included in the typical commercial real estate transaction are the Property Condition Assessment, or PCA, which is related to capital expenditures needed to maintain the condition of the building over the life of the loan or hold period and seismic risk assessments, often performed for buildings in high-risk seismic zones. These assessments are all described by an ASTM Standard, and the existence of an ASTM Standard benefits the user and provider community by providing a common language regarding the scope of these assessments, the minimum acceptable qualifications, transferability, and other benefits. We are now seeing greater pressure to evaluate and disclose climate risk at the property level and to align that with the existing due diligence processes. Real estate investment trusts (REITs) and other equity investors are already obtaining these types of assessments and embedding these considerations into their risk management processes. REITS are evaluating this information in relation to insurance costs, tenant desirability, business continuity, and property values, as well as a potential risk to exit strategies as knowledge of climate risk becomes more widespread. Lenders have begun reviewing their portfolio for climate risk or have already added a climate risk component to their ESA or PCA scope. In addition, many lenders have signed on to voluntary climate frameworks, many of which recommend evaluating the physical risk posed by climate change within their portfolios. Signaling from the Federal Reserve and other agencies suggests that some sort of disclosure may be required in the future. However, we are lacking an ASTM standard on these types of assessments. Collectively, the lending, investment, and consulting community have identified a need for a property resilience-focused standard within ASTM. Our vision is that the ASTM guide will be an umbrella to reference other climate guides outside of ASTM, as well as any resilience and climate-related guides within ASTM. We believe our efforts will identify gaps in current ASTM assessment standards related to specific hazards. We feel delivering a standard to the marketplace is urgent as we know these assessments are already occurring and pressure is growing to create a standardized approach. Our Task Group is not attempting to cover all Environmental, Social and Governance (ESG) reporting or assessment of physical climate risk across a business, community, region, or a supply chain. This is solely focused on physical climate risk to the building itself. (continued)

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continued: An ASTM Standard for Climate Resilience – Progress Report We envision the Property Resilience Assessment (PRA) to be initiated during the standard due diligence period for a commercial real estate asset. Resilience, in the context of this standard, is the ability of a building to withstand the impacts of the natural hazards that may act upon it. A more resilient building is better able to withstand the hazard, resulting in better outcomes for investors, lenders, insurers, occupants and users. Our PRA will include natural hazards that are caused by climate change, those made more extreme by climate change, and those unrelated to climate change because the concepts of resilience apply regardless of the cause of the hazard. The PRA is envisioned to consist of three main stages as depicted below.

The first stage of the PRA is a natural hazard screening to determine which hazards are likely to be a concern for the building. This natural hazard screening consists of leveraging commercially available hazard maps and models, as well as publicly available sources of this information. Second is the risk assessment stage to understand the building characteristics, such as type of building materials, age of construction, and on-site sensitivities and vulnerabilities. A site inspection takes the hazards identified in the first stage and compares that to the building attributes, nature of occupancy, and any existing adaptations that may have already been made at the property. We are still debating the finer points within our ASTM Task Group; however, we believe we may be able to provide a risk rating as an outcome of Stage 2, and a probable maximum loss for at least some hazards (such as flood). Stage 2 consideration examples: • Two buildings may both be subject to flood risk, and both may have similar building elevations; however, one has critical equipment in the basement and the other has situated critical equipment above projected flood levels. The two buildings would experience the hazard differently. • One building is utilized for assisted living and another for self-storage. Considerations for hazards such as extreme heat would be different for these two sites based on the nature of occupancy. The third and final stage of the PRA is the identification of basic resilience best practices at the building depending on the nature of the hazard. Adaptations such as temporary or permanent flood barriers, moving critical equipment, fortifying the building against fire hazards, upgrading HVAC equipment, and so on would be identified, and cost estimates generated. Assuming the costs to make the building more resilient are reasonable to the value of the building, we imagine the deal would proceed with the costs noted as a post-closing requirement. (continued) 24

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continued: An ASTM Standard for Climate Resilience – Progress Report It is important to note that our PRA does not attempt to cover adaptation engineering beyond a certain point. We are still working through the dividing line between our PRA and advanced resilience engineering, and we will discuss the need for advanced engineering if the basic best practices are insufficient to address the hazard of concern. We have a great deal of respect and humility about the decades work on the topic of natural hazard adaptation, and we intend for our standard to point to that work in our resources and references. Our ASTM Task Group, known as Task Group WK62996, began a few years ago and has developed real traction this year. One key hero in our story is Damian Wach at PGIM Real Estate, Chairman of the ASTM E06.25 Committee on Standards for Whole Building Performance. Other key leaders include Willy Accame with Panatonni Development, Jessica Weyandt with Marx Okubo, Brett Farbstein with Cannon Design, and Albert Slap with Risk Footprint, among many others who have jumped in to contribute. The Task Group includes a balance of the potential users for these assessments, such as financial institutions and real estate developers, as well as the providers of such assessments, including many EBA members such as Bureau Veritas, EBI, Envirosite, Lightbox, Nova, Partner Energy, as well as hazard screening and modeling companies. In addition, representatives of the American Society of Civil Engineers, which is influential with respect to building codes, The Institute for Sustainable Communities, the US Resiliency Council, BREEAM US, and the National Center for Atmospheric Research are involved, along with representatives of the CPACE lending community, Fannie Mae, and Freddie Mac. We have nearly 90 participants and welcome additional interested parties, or those who would like to share information with us or simply stay informed. As a result of the Phase I ESA being incorporated into commercial real estate due diligence, countless releases of hazardous substances and petroleum products have been addressed in our communities over the last several decades. The Phase I ESA process also brings certainty to the marketplace with how to handle environmental concerns, and this facilitates lending activities. We imagine this PRA could have similar possibilities in terms of improved resilience across the nation and facilitating property transaction activity for those currently struggling with how to assess and report on climate risk. We know that climate risk and resilience assessments are already occurring for investors and lenders in the absence of an ASTM Standard, and we hope that our work will provide the needed clarity provided by the ASTM process. We appreciate offers to collaborate or simply share information as we move forward through the ASTM process.

EBA Journal – Winter 2022 Edition

Enhance and Improve Your City Directory Research Elizabeth Krol, National Client Director, EBI Consulting & Lizz Barringer Lagomarsino, Principal, Lagomarsino Planning + Management The ASTM E1527-21 Phase I Environmental Site Assessment (ESA) Standard was published on November 1, 2021. As part of this effort, the Historical Research Focus Group identified that incomplete and/or insufficient city directory research is a potential area of weakness in the Phase I ESA process. Insufficient research results in the omission of information regarding historical tenants and their operations such as those with dry cleaners, gasoline service stations, and other industrial usage. As educational guidance on how to conduct city directory research, a supplemental white paper is being prepared, taking a deeper dive into this important aspect of the process. The intent of the white paper is to improve city directory research conducted for environmental due diligence purposes and will provide research tips to help understand the limits of city directory coverage and minimize data gaps resulting in missed findings. Following is a sneak peek of the educational information that is being developed as City Directory Review Considerations.

Understand the Resource

A city directory is a book published for municipalities that includes occupant names, addresses, telephone numbers, and businesses at a specific point in time. City directories were first created to provide names and contact information of businesses and residents to sales professionals, merchants, municipalities, and others interested in contacting occupants of an area. The listings in these books are arranged by address, and some also have listings arranged by occupant name, akin to telephone directories. Publishing frequency varied by location, publisher, and era, from annually to every few years. City directories were originally published as hardcover books and many modern directories are now available in digital format.

History of City Directory Development In the earliest days of directory publishing, companies relied on older data in previous editions as the basis for the next directory to be published. They created canvassing districts and used canvassers to verify changes with special emphasis on addresses or locations that had previously been reported as vacant or not verified. Since canvassers were paid by the number of canvassing slips returned to the company, there was sometimes an issue with false data. To resolve this situation, companies implemented quality control with different sequential teams of canvassers. For example, in the 1915 edition of the New York City, New York directory, over six million slips were returned for 1.1 million names that were published in the directory, which included the slips for several rounds of canvassing for the same addresses. By the 1920 and 1930s, many publishers were using cards mailed to addresses to reduce the labor and time spent each year on canvassing. This process introduced a high number of spelling and interpretive transcription errors that required additional quality control measures. In later decades, publishers have purchased and complied data from credit agencies, real estate transactions recorded by local governments, change of address, and thousands of mailing lists. Telephone verification is used to gather more data associated with an address, such as hours of operation and location. (continued) 26

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continued: Enhance and Improve Your City Directory Research

Over time, city directories have become a valuable historical resource for various interests including historical, genealogical, and environmental due diligence purposes. Many city directories have alphabetical, government, classified, and, most importantly, street sections, which allow for a review of a subject property and adjoining properties. City directory data are currently sourced from different formats including hardcopy books, digital copies of books, microfilm and microfiche copies of books, scanned books that have extracted data manually or via optical character recognition (OCR) software, and national digital datasets that have never been published in book format. Some advantages to the digital datasets include address information for rural areas where books have never been published and additional data including business type for a business located at a specific address. Thus, the format of city directory data can impact the researcher’s findings.

Why Historical City Directories Are Useful City directory data published in the past can be used by researchers to identify past building occupants, which help to identify past property uses which are evaluated to determine if the prior activity could have resulted in environmental contamination of the subject property or adjoining properties. As an example, city directory data might show the same address was occupied by a residence in the 1930 and 1940s, by a filling station in the 1950s through the 1970s, and by a restaurant from the 1980s to the present. The filling station listing is a potential “red flag” that would alert the researcher to conduct further investigation to determine if the petroleum tanks and related piping had been removed and if any known contamination was properly removed or managed in place.

Stay tuned to the EBA Journal for the next installment of this series, which will focus on city directory research fundamentals. It is anticipated that the final white paper will be available mid-to-late-2022.

Contributors to the city directory educational effort: Georgina Dannatt, Chemmie Sokolic, Jeri Massengill, Hank Burnham, Scott Davis, Rita Wiggin, Caitlin Lozano, Lizz Barringer-Lagomarsino, Julie Kilgore, Greg Doyle, Mark Mattei and Elizabeth Krol

EBA Journal – Winter 2022 Edition

PFAS CORNER

EBA Journal – Winter 2022 Edition

PFAS CORNER:

Practical Approaches to PFAS for Environmental Risk Managers Consider a PFAS Plan for Successful Due Diligence

Presenters: Elizabeth Krol, EBI Consulting; Dianne R. Philips, Holland & Knight LLP; Jeanine L.G. Grachuk, Beveridge & Diamond, P.C.; Moderated by Georgina Dannatt, Bank of the West

Key Takeaways from the October 28, 2021 Webinar: The goal for due diligence for potential PFAS sites is the same as for all other sites: to determine based on current information the likelihood that this property’s history indicates a release likely has occurred that would cost a significant amount of money to address, placing loan repayment in jeopardy. PFAS is different because: (a) There are thousands of PFAS. (b) Analytical techniques exist for only a few PFAS. (c) The science on toxicity and fate-and-transport of PFAS is evolving rapidly. (d) There is significant uncertainty about future regulation under federal law. (e) There is significant current variability and future uncertainty under state law. (f) PFAS sites often are high profile due to drinking water impacts. Consider developing your own “PFAS Plan.” Your PFAS Plan would include the information you need to ask your consultant good questions and to help you articulate the risk. It could evolve over time as the legal and scientific landscape changes. It could include some or all of the following: 1. What is your risk profile? How do you define success? 2. How does CERCLA address PFAS today? Which PFAS are relevant? 3. What rules apply to PFAS-contaminated sites in relevant jurisdiction today? Which PFAS are relevant? 4. Under what circumstances do you want the ASTM Phase I to address PFAS? 5. In relation to PFAS in the Phase I, consider asking your consultant: a. How will PFAS be addressed in the Phase I? b. What data sources will be used to identify PFAS issues? c. What are the data gaps?

6. Understand the red flags: what kinds of PFAS sites are “significant”? 7. When is invasive testing for PFAS appropriate? 8. What is the future risk? 9. Considerations when evaluating foreclosure.

EBA Journal – Winter 2022 Edition

Environmental Justice and Potential Regulatory Impacts on Commercial Lenders Ryan Smith & Randy Copenhaver, Great American's Environmental Division

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Environmental Justice is the concept that all people regardless of race, color, national origin, or income should receive fair treatment and have meaningful involvement with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.

Executive Summary Environmental justice has been one of many focal points of the Biden Administration and of many states. Recent actions by the EPA and several state-level regulatory agencies signal a shift toward increased oversight and enforcements against industries that effect disadvantaged communities. Some suggest that sweeping environmental justice regulations will directly impact many current operations and be a deciding factor when siting future industries. With high potential for increased scrutiny in environmental justice targeted areas, lending institutions may also have to increase their standards when assessing a new loan request. This white paper provides a primer on what environmental justice is, where the movement started, future implications of a renewed national focus and what risk managers may consider when evaluating lending opportunities.

What is Environmental Justice?

Despite progress in the United States, a long history of racial discrimination and economic disparity has resulted in underprivileged communities facing an unequal burden of the impacts of pollution and climate change. It is well documented that communities of color and low-income populations reside in some of the most polluted areas and are most immediately and severely affected by the results of climate change but have the least resources to respond. Per the National Law Review, “Environmental Justice is the concept that all people - regardless of race, color, national origin, or income - should receive fair treatment and have meaningful involvement with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” In short, environmental justice embraces the principle that all communities and all people in any location have the right to equal protection under our environmental laws.

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EBA Journal – Winter 2022 Edition

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History of Environmental Justice

While environmental justice seems to be a trending topic these days, community activists around the country have been fighting for environmental justice for decades. In 1969, Hazel Johnson, who some refer to as the “mother of environmental justice,” began pushing for more equitable conditions in Chicago. As an African American resident of low-income public housing, Johnson watched her family members and neighbors suffer from adverse health and safety conditions because of various nearby landfills, industrial operations and wastewater discharges. Johnson and her supporters petitioned local officials and state agencies for broad environmental reform to protect vulnerable “fence line” communities, which are those that neighbor or are immediately adjacent to a company and are directly affected by the noise, odors, chemical emissions, traffic, parking and operations of the company. While community activism like this helped push environmental justice forward on a local and regional level, environmental justice did not reach a national stage until the mid-1990’s. In 1994, President Bill Clinton signed an executive order, EO 12898, which instructed the different federal agencies to develop their own environmental justice policies that would limit the “disproportionately high and adverse” effects of environmental harms on low-income communities and people of color – generally, those who are more likely to be burdened by pollution and/or contaminated water sources. Under this order, the Environmental Justice Advisory Council was also empowered to influence the priorities of the EPA. However, President Clinton’s executive order lacked concrete requirements that environmental justice be considered in siting, rulemaking and permitting decisions. More importantly, it did not create a framework for judicial review regarding compliance with the executive order. Therefore, no person or organization could ensure the order was enforced to any degree. Nevertheless, the executive order still brought national attention to environmental justice issues and by 2014, all states had enacted similar policies requiring state agencies address environmental justice.

Environmental Justice under the Biden Administration Fast forward to present, environmental justice has been reinvigorated on a national level under the Biden administration. Within the first weeks of taking office, President Biden issued his own executive order, EO 14008, which articulated the commitment to address environmental justice issues including inequity due to climate change. The executive order created three (3) new committees focusing on environmental justice including: 1. The White House Interagency Council on Environmental Justice (CEJ) 2. An Office of Health and Climate Equity at the Health and Human Services Department 3. An Environmental Justice Office within the Justice Department

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EBA Journal – Winter 2022 Edition

Where previously the EPA led oversight and environmental justice implementation efforts, the new White House Interagency Council on Environmental Justice is comprised of many federal agencies – Agriculture, Defense, Labor, Housing, Energy, Environment, Transportation, etc. – and will expand the reach of environmental justice. Per the executive order, the Council on Environmental Justice will be tasked with developing strategies to address current and historic environmental injustice, developing clear performance metrics for federal agencies to ensure accountability and publishing performance scorecards on environment justice implementation publicly. President Biden’s executive order also stipulated that 40 percent of federal sustainability investments must benefit disadvantaged ‘fence line’ communities, which shoulder undue pollution burdens. The initiative, which has been touted as the “Justice 40 Initiative,” could include investments in clean energy, clean transit, affordable housing and clean water infrastructure. 8 The initiative is already being put into action. For example, in early May 2021, the U.S. Department of Energy allocated more than $15 million in funding to install solar energy in underserved communities and to train community members interested in the trade.

EPA Guidance and Potential Future Impacts

Recent EPA actions have supported the claim that increased oversight and enforcement is inevitable. In early April 2021, EPA Administrator Michael Regan implored each regional office to pursue environmental violations more strongly in disadvantaged communities. In a series of memorandums issued between April and July 2021, Larry Starfield, Acting Chief of EPA’s Office of Enforcement and Compliance, outlined steps to advance environmental justice enforcement. Among other measures, the recent memos discussed increasing facility inspections in disadvantaged communities, addressing non-compliance faster, monitoring ‘fence line’ conditions, more community engagement and seeking restitution for victims of environmental crime. 10 Each memo underscores how harsher criminal penalties and accelerated cleanup obligations can help progress the Biden administration’s environmental justice goals. In early May 2021, EPA Administrator Regan put his words into practice and interjected in a Chicago permitting case. A car and metal shredding operation was slated for development in the economically disadvantaged and majority-Latino southeast side of Chicago – coincidentally the same neighborhood where Hazel Johnson started her environmental justice movement decades ago. Administrator Regan requested that permit authorization be put on hold until a better understanding of the environmental and social impacts be known. The Mayor of Chicago agreed and denied the permit until further notice. 12,13 In another recent and widely publicized enforcement action, EPA officials invoked emergency powers under the Clean Air Act to shut down the Limetree Bay refinery in the U.S. Virgin Islands. The refinery has a prolonged history of repeated accidental releases and air permit non-compliance issues which have been directly impacting the nearby community. The EPA’s May 2021 decision to stop operations entirely is remarkable and has only been seen on three other occasions. The federal focus on environmental justice has spurred many states to pursue their own environmental justice initiatives. States generally have more power than the federal government to regulate pollution as well as future development and therefore state driven environmental justice laws could be more influential and longer lasting, especially if future federal administrations approach environmental justice differently. However, as the current trend for specific requirements at the state and federal level builds, environmental justice could become depoliticized and be a baseline industry expectation like NPDES permitting or air emissions standards. All this supports the notion that environmental justice will be a central focus for environmental engagement moving forward. With the interagency council expanding focus beyond the purview of the EPA, environmental justice principles, initiatives and enforcement actions might now, and in the future, be seen across all federal agencies and more widely in state regulations as well.

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EBA Journal – Winter 2022 Edition

Recent Environmental Justice Claims As the focus on environmental justice intensifies, there has been an increasing number of lawsuits filed in recent months revolving around environmental justice issues. In April 2021, the city of Los Angeles filed suit against a scrap metal recycling facility operating in southern Los Angeles. The area surrounding the facility, which includes the nearby Watts neighborhood, are considered some of the most disadvantaged areas in the state of California.

Operations at S&W Atlas Iron & Metal Co. Inc. have reportedly subjected this community to metal shards, projectiles and noxious fumes for a prolonged period. Outdoor recreational space at a nearby high school even had metal shards piling to heights of over 20 feet. The suit alleges that the disadvantaged community shouldered the primary burden of the environmental hazards created by the scrap yard, and in May 2021, the state of California joined the suit to pursue damages against S&W Atlas. In late May 2021, several individuals and community organizations filed a lawsuit in the Superior Court of New Jersey pertaining to a proposed warehouse development in Piscataway, New Jersey. The suit is seeking to overturn the zoning board’s approval of a 230-bay truck terminal warehouse facility on the grounds that a comprehensive assessment of the environment and social impacts was not conducted. The warehouse is to be sited adjacent to an elementary school and ecological preserve. Piscataway is identified as an overburdened community under New Jersey’s new Environmental Justice Law. Nearly 75 percent of residents are people of color and the township has an “F” rating from the American Lung Association for poor air quality. The suit contests that the increased trucking to and from the warehouse will further negatively impact the local air quality and bring undue environmental burden. In New Jersey alone, the Attorney General and Department of Environmental Protection have filed 39 different environmental justice lawsuits since 2018, which have rendered nearly $20 million in judgements. In May 2021, New Jersey filed seven additional suits for conditions impacting environmental justice communities, including one in Secaucus pertaining to the open-air storage of food waste.

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EBA Journal – Winter 2022 Edition

What Does This Mean? – The Effects on Lenders

Aside from increased investments into disadvantaged communities, many expect increased scrutiny and enforcement resulting from this administration’s renewed focus on environmental justice. Some have surmised that President Biden’s early efforts point toward further policy and legal changes that could shape the regulatory landscape over the coming years. The National Law Review suggests that companies with facilities located in vulnerable environmental justice areas should expect heightened scrutiny moving forward – including potential civil or criminal penalties. 20,21 Facility owners and operators should expect a number of changes related to enhanced regulatory scrutiny of certain sites, changes in enforcement and enforcement terms, increased facility inspections from governmental agencies and an increased demand for monitoring, notification and community engagement. With the Biden administration’s renewed emphasis on environmental justice, companies which own or operate facilities should pay close attention to any environmental justice metrics which may apply. Operations most commonly targeted by environmental justice are chemical facilities, power plants, waste treatment plants, refineries and heavy metal plants, particularly those with a history of past violations. This leads us to the potential effects environmental justice could have on lenders looking to continue to offer commercial property loans. As previously stated, many sites may be subjected to additional environmental testing, community outreach requirements, more stringent requirements on existing permits and/or third-party lawsuits. The results of which could include delays or rejections of environmental permits or redevelopment plans, fines and/or other penalties that can increase the potential for borrower default. The USEPA and some states have online environmental justice mapping tools, described in more detail below, which can help risk assessors gauge the potential for environmental justice related actions in a geographic area. It may also prove helpful for lenders to consider enhancing their due diligence toolkit with environmental insurance. Commercial lender pollution liability policies exist to protect against both known and unknown environmental exposures that may exist on a property and can protect lenders in the event of a default. The industry tends to focus on the negatives and costs of environmental justice, but it is important to remember that environmental justice will not be a negative factor for all projects. Redevelopment or improvement projects that significantly reduce environmental impacts on an environmentally vulnerable community are more likely to gain support from regulators and community members. This support can ease project approvals and reduce overall projects costs for a borrower, lowering the risk of default on a loan.

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EBA Journal – Winter 2022 Edition

Current and Future Environmental Justice Resources As part of the recent executive order, the Biden administration has also outlined expectations for a new “Climate and Economic Justice Screening Tool”. The new screening tool will highlight disadvantaged communities that are threatened by the cumulative impacts of climate change, economic and racial inequality, as well as environmental pollution. The new tool will reportedly consider the EPA’s existing Environmental Justice Screening Tool (EJSCREENS) and California’s comprehensive “CalEnviroScreen” tool during development. EJSCREENS provides a nationally consistent dataset and allows you to generate a standard report which compares the state, regional and national percentiles for each of the environmental and demographic indicators in a defined area or at a point location. 24 CalEnviroScreen assesses similar environmental justice metrics as the EJSCREEN Indexes, except CalEnviroScreen provides one overall score encompassing many indicators as opposed to needing different indexes. CalEnviroScreen uses environmental, health and socioeconomic information to produce a numerical score for each census tract in the state and considers both “pollution burden” and “population characteristics” when determining cumulative impacts. Like these existing environmental justice screening tools, the new screening tool will factor in proximity to emission sources, exposure pathways, community participation among many other economic, environmental and demographic variables.26 The forthcoming “Climate and Economic Justice Screening Tool” is to be developed by the interagency council and will be a national standard once deployed. However, the timing of such is presently unknown. While “CalEnviroScreen” is the gold-standard for state level environmental justice assessment and mapping, it is not the only state mapping tool out there. Other states such as New Jersey, New York and Minnesota have developed their own statewide screening tools. It is imported to check for state specific resources and regulations applicable to a given site location.

REERENCES: https://www.natlawreview.com/article/environmental-justice-and-why-you-should-care https://www.nytimes.com/2019/09/05/us/politics/environmental-justice-climate-town-hall.html https://www.natlawreview.com/article/environmental-justice-and-why-you-should-care https://grist.org/equity/hazel-johnson-environmental-justice-month-chicago/ https://grist.org/politics/joe-biden-environmental-justice-executive-order-bill-clinton/ https://www.natlawreview.com/article/environmental-justice-and-why-you-should-care https://www.energy.gov/articles/doe-launches-initiatives-accelerate-solar-deployment-underserved-communities www.epa.gov/sites/production/files/2021-04/documents/strengtheningenforcementincommunitieswithejconcerns.pdf https://news.bloomberglaw.com/environment-reporter/biden-epa-sends-early-signal-of-aggressive-pollution-enforcement https://www.eenews.net/stories/1063732139 https://www.washingtonpost.com/climate-environment/2021/05/14/limetree-bay-refinery/ https://www.law360.com/environmental/articles/1389875/calif-seeks-to-join-la-environmental-justice-suit https://www.insidernj.com/press-release/piscataway-residents-sue-zoning-board-stop-warehouses-next-school-park/ https://hudsonreporter.com/2021/05/11/environmental-justice-lawsuit-filed-against-secaucus-business/ https://news.bloomberglaw.com/environment-reporter/biden-epa-sends-early-signal-of-aggressive-pollution-enforcement

EBA Journal – Winter 2022 Edition

Just for Laughs! Originally presented as part of the 2016 Ft Worth Conference Affiliate Only Session: What Keeps Lenders Up At Night

Submit your comic for the next edition. Stick figures encouraged!

EBA Journal – Winter 2022 Edition

COMMITTEE CORNER Conference Committee Plans the EBA conference agenda and conference experience. 2022 Chair: Rita Wiggin, First Bank

Content Committee

The EBA has several committees meeting regularly. In fact, it is due to our volunteer members who dedicate their time, talent, and expertise, that most of the EBA's content exists, including this Journal.

Plans and organizes EBA educational content, including webinar planning and execution, and recommended topics for conference sessions 2022 Chair: Georgina Dannatt, Bank of the West

DEI Committee Identifies and organizes opportunities we can make EBA and our industry more diverse, equitable, and inclusive. 2022 Chair: Lori McKinnon, Zions First National Bank

Gives Back Committee Identifies and organizes opportunities where our members can make an impact through contributions to charitable organizations. 2022 Chair: Mike McGeehan, EBI Consulting

Membership Committee

All EBA members are invited to join these open committees and get involved! Contact eba@envirobank.org to learn more.

Builds connections with members to ensure they’re making the most of their EBA membership, as well as identifies and makes initial outreach to future members. 2022 Chair: Onamia Chun, First Citizens Bank

Journal Committee Collects, writes, edits, and assembles articles our members contribute to our 2x annual publication. 2022 Chair: Ruxandra Niculescu, GSI

EBA Journal: Winter 2022 Edition

Articles inside

Environmental Justice Whitepaper

An ASTM Standard for Climate Resilience