EBA Journal – Winter 2022 Edition
Environmental Justice and Potential Regulatory Impacts on Commercial Lenders Ryan Smith & Randy Copenhaver, Great American's Environmental Division
“
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.
(continued) 30
