Commitment to Community: Three Steps to Drive Energy Transformation Through ESG - Velma Deleveaux, PhD
In my work with community leaders and large utility companies, one observation consistently emerges: many companies view community energy projects as a cost rather than as an indispensable long-term investment. Yet corporations that choose to invest in these projects, particularly in rural and disadvantaged communities, have a prime opportunity to reap enduring returns. Specifically, they can improve their performance in an area increasingly important to stakeholders: driving an effective environmental, social, and governance (ESG) program.
In the quest for “energy transformation” and “energy justice,” corporations and communities are on parallel paths. Their goals are laudable: making energy accessible, affordable, and empowering for all communities; bringing low-income, disenfranchised groups into energy decision making; and ensuring democratic energy management. These goals are in line with national policies, such as the Biden administration’s “Justice40 Initiative,” designed to ensure 40 percent of the overall benefits from federal investments in climate and clean energy flow to disadvantaged communities.
Commitment to community is vital for corporations that are not only seeking energy transformation but also aiming to create a vibrant ESG strategy. Here are three steps your company can take to shape an ESG program ever mindful of the energy needs of your community:
- Make the community a key component of your ESG strategy. Working with community members to improve their lives is a direct way to influence company brand and reputation. It’s also an effective approach for increasing investor and lender engagement. For example, a GreenPrint survey found that 64 percent of Americans are willing to spend more to buy from businesses that promote sustainable products, while a Gallup study found that 48 percent of investors are interested in sustainable investing funds. Lenders, too, are looking for contenders who offer a sustainable future with a low risk profile.
- Understand the purpose and priorities of your community and find projects that speak to these needs. Determine what matters most to your community, and delineate the “WIIFM” (what’s in it for me?). Affordable energy? Better air quality? Improved access to transportation? More job opportunities? Improved health? Identify those energy projects that most succinctly address community priorities and then work in tandem with community leaders to create empowering activities to reach these goals.
- Select the right community leaders with whom to partner. Look for influencers who are trusted, reputable, and experienced in leading community initiatives. Seek to continuously develop new leaders in this rapidly emerging field.
In the pursuit of climate change solutions and equitable energy, the parallel paths of corporations and communities offer opportunities for collaboration and intersection. It is here that we can join forces and create true energy transformation — driven and sustained by, and delivering value to, all stakeholders.
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Velma Deleveaux, PhD is an independent board director and strategic advisor to corporate executives, with distinct expertise in corporate growth strategy, enterprise risk, and supply chain risk management.
