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Green hydrogen could be a powerful driver of the global energy transition. Rather than extracting hydrogen from natural gas or gasified coal, the green hydrogen industry deploys electrolysis systems that “split” water into hydrogen and oxygen with an electrical current.

Assuming the electricity running the electrolysis equipment comes from wind, solar or other renewable resources, the result is a more sustainable source of hydrogen for zero-emission fuel cell vehicles. Green hydrogen can also shrink the carbon footprint of other hydrogen-dependent sectors, including the global chemicals industry, food systems, refining and steelmaking, among others.

The downside? Electrolysis systems need water — and plenty of it. It is commonly cited that it takes 9 liters of water to produce 1 kilogram of hydrogen through electrolysis, though the Rocky Mountain Institute suggests a total of 20 to 30 liters per kilogram is more accurate to account for water purification and cooling.

That sounds like a lot, but relative to conventional hydrogen systems, it isn't. Hydrogen systems based on fossil fuels require 20 to 40 liters of water per kilogram of hydrogen, according to the Rocky Mountain Institute. 

Still, with global freshwater supplies at substantial risk already, green hydrogen stakeholders have an opportunity to make a real difference. Instead of using clean, pure freshwater for electrolysis, they can use impure sources.

That sounds easy enough, but the devil is in the details. Impurities in water can quickly foul the delicate membranes in conventional electrolysis systems. New, more affordable pre-treatment systems are beginning to solve that problem, and innovators are developing hardier systems that can operate directly on impure water. Here are five emerging water-for-hydrogen developments to watch in the U.S. and around the world. 

1. Minnesota: Putting municipal wastewater to work

Water resource managers are adopting the phrase “water resource recovery facility” (or WRRF) as a more helpful and accurate description of what goes on at a wastewater treatment plant. The choice is timely, considering that WRRFs could form a practically limitless source of impure water for electrolysis. 

One showcase project is taking place in the city of St. Cloud, Minnesota, which is moving forward with plans to add a new electrolyzer system to its WRRF. The project includes substantial inter-agency partnerships and $3.6 million grant from the U.S. Department of Energy.

Once complete, the project will offset the fossil fuels that typically power the wastewater treatment process. The electrolyzers will run on renewable energy and produce oxygen as a byproduct, which will be used for the plant's aeration systems. The partners are also looking to support a fleet of hydrogen fuel cell buses with green hydrogen from the new electrolysis system.

2. Sweden: Seawater with an extra green twist

The oceans are another virtually infinite source of impure water for electrolysis. Researchers and innovators are drawing economical pathways for producing hydrogen from seawater, and offshore wind developers are already incorporating offshore green hydrogen production into their plans. 

One particularly interesting offshore project was proposed as part of a gigantic new wind farm off the southern coast of Sweden in the Baltic Sea. Called Neptunus, the wind farm project is a partnership between the renewable energy firm OX2 and the investments branch of Ingka Group, known as the leading franchisee of the iconic Swedish home furnishing company Ikea. 

In addition to feeding Europe’s growing demand for wind energy and green hydrogen, the partners proposed injecting oxygen from the electrolysis system into the Baltic Sea to help restore parts that are designated “dead zones” due to depleted oxygen levels.

3. Wales: Water from factories and rooftops, too

A project in Wales illustrates how green hydrogen production can work in concert with local industries and even the local weather. The utility Wales & West partnered with the global firm Hydrostar to explore the use of industrial wastewater for electrolysis.

The partners are investigating three membrane-free electrolyzer prototypes, which can be tailored to operate on specific kinds of industrial waste. These systems could be located at manufacturing sites that produce large amounts of wastewater, including textiles, electronic goods and processed foods.

In a nod to Wales’ rainy weather, the project also covers rainwater harvested from rooftops and storm runoff, which contains a variety of impurities.

4. Scotland: Water from spirits

In another project that makes use of local resources, a research team at Heriot-Watt University in Scotland uncovered a way to reuse the wastewater from distilleries for green hydrogen production. Every liter of malt whiskey generates about 10 liters of residue, adding up to an estimated 1 billion gallons of wastewater from the global whiskey sector each year, according to the researchers. 

Their solution is an affordable pre-treatment step that deploys nanoscale particles of nickel selenide, a semi-conducting material. Their initial findings suggest that the pre-treatment does not interfere with the efficiency of the electrolysis system and may even result in a slight increase in efficiency.

5. Oregon and California: Beyond electrolyzers 

Electrolysis is not the only way to produce hydrogen from water. Another method consists of an “artificial leaf” approach in which hydrogen is released through a chemical reaction started by sunlight, with the help of a catalyst substance that speeds up the process. 

At Oregon State University, scientists partnered with researchers from the tech company HP to develop a catalyst that can rid water of pollution from herbicides while producing hydrogen, too. 

Specifically, the catalyst is designed to tackle herbicides containing glyphosate, sold under the trade name Roundup. The leaching of glyphosate into soil and groundwater is a significant concern because crops only absorb a small amount of it. "We are showing that through photocatalysis, it is possible to produce a renewable fuel while removing organic pollutants, or converting them into useful products,” lead researcher Kyriakos Stylianou said of the findings.  

Another green hydrogen project underway in California aims to produce hydrogen from biomass instead of water. Set to open next year, the new biomass facility will use brush from forests, helping to reduce the risk of wildfires, as well as agricultural waste that would typically be burned or buried. Instead, the waste will be rendered into green hydrogen and biochar, which is gaining traction as an important carbon sequestration agent. Hydrogen from the new facility will be marketed as a replacement for diesel fuel at the Port of Los Angeles.

The bottom line: Creativity keeps green hydrogen on the cutting edge

Altogether, these initial projects illustrate how the green hydrogen industry could help resolve environmental challenges beyond simply replacing fossil resources with renewable ones. That should be all the more reason to adopt them into mainstream practice heading into 2024 and beyond. 

This story was originally published by Grist. Sign up for Grist's weekly newsletter here.

For decades, environmental advocates have been pushing back against “greenwashing,” when polluting companies misleadingly present themselves as environmentally friendly. Governments are finally starting to tackle the problem with stricter regulations: The European Union agreed to ban deceptive environmental ads in September, and the U.S. Fair Trade Commission is in the process of updating its guidelines around green advertising. 

But as new rules go into effect, they’re contributing to a different problem: Many companies, even honest ones, are afraid to talk about their work on climate change at all.

The practice of “greenhushing” is now widespread, according to a new report released last week by South Pole, a Switzerland-based climate consultancy and carbon offset developer. Some 70 percent of sustainability-minded companies around the world are deliberately hiding their climate goals to comply with new regulations and avoid public scrutiny. That’s in contrast to just a few years ago, when headlines were full of splashy corporate promises on climate change and even oil companies were pledging to zero out their emissions. The report suggests that this newfound silence could impede genuine progress on climate change and decrease pressure on the big emitters that are already lagging behind.

South Pole found that climate-conscious companies in fashion, consumer goods, tech, oil, and even environmental services are “greenhushing.” Nearly half of sustainability representatives reported that communicating about their climate targets has become harder in just the past year. But companies aren’t giving up on going net-zero — just the opposite. Of the 1,400 companies surveyed, three-quarters said they were pouring more money than before into efforts to cut carbon emissions. They just didn’t want to talk much about it.

“We really just cannot afford to not learn from each other,” said Nadia Kähkönen, a deputy director at South Pole and the report’s lead author. Companies should be sharing the lessons they’ve learned from trying to cut their emissions, engaging one another in hard conversations about “what is working and what is not, and how we can improve it,” she said.

Greenhushing was the most common, unexpectedly, among the greenest companies. Some 88 percent of those in environmental services, a category that includes renewables and recycling, said they were decreasing their messaging about their climate targets, even though 93 percent said they were on track to meet their goals. Consumer goods companies, like those that sell food, beverages, and household goods, were the next likely to be greenhushing (86 percent), more than the oil and gas industry (72 percent).

The survey, conducted anonymously, is the first to offer insight from companies as to why they’re keeping quiet. Environmental service companies had one of the same top reasons as oil companies: heightened scrutiny from investors, customers, and the media. Among all the companies that admitted to greenhushing, well over half listed changing regulations as a reason why they’re not talking about their climate pledges. Some companies also cited a lack of sufficient data or clear industry guidance around how to communicate their green claims.

Their hesitation has real consequences, researchers from South Pole said. For one, it cuts down on the sense of competition and pressure that can drive companies to be more ambitious with their environmental targets. “If you’re hiding what you’re doing, or not talking about it in a prominent way, it can hold back others,” said George Favaloro, South Pole’s head of climate solutions for North America. The trend also could also cut down on sharing tips and tricks for decarbonizing that could help others trim their carbon emissions. 

The report found that greenhushing isn’t unfolding equally across the 12 countries surveyed. American companies aren’t as quiet — likely because the United States has less regulation around environmental claims. U.S. companies were the second least likely to be greenhushing, behind Japan. European companies were on the opposite end of the scale. France, which has laws that explicitly limit greenwashing, led the pack with 82 percent of companies staying mum.

“They’re really up against it in Europe now, and in the U.S., it’s still a bit off in the future,” Favaloro said. “It’s coming, but it’s not quite here yet.” One of the first anti-greenwashing laws in the U.S. went into effect in California earlier this month, mandating that large companies disclose their emissions to back up climate-friendly claims. Lawsuits are also a growing threat: Last year, Nike and Delta Air Lines were sued for making questionable claims about their environmental impacts.

It might be surprising that U.S. companies are unafraid of communicating their climate goals considering the conservative backlash against ESG, short for “environmental, social and governance,” a set of standards investors use to assess companies. But the ESG drama has more serious consequences for asset managers like Vanguard and BlackRock, which removed references to sustainability goals on their websites last year, than for corporations.

The 1,400 companies surveyed in the South Pole report are some of the furthest along when it comes to corporate climate action. Overall, however, most companies haven’t even started yet. Only 8 percent of a broad group of 77,000 corporations, which includes global Fortune 500 companies, have set a net-zero target, the report found. “The more that even the leaders don’t talk about what they’re doing, it’s going to provide less motivation to get that group in the game,” Favaloro said.

This article originally appeared in Grist. Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

This story on the new train projects to watch is part of The Solutions Effect, a monthly newsletter covering the best of solutions journalism in the sustainability and social impact space. If you aren't already getting this newsletter, you can sign up here. 

When you look back at 2018, do you remember it as the year of the electric scooter? I do. Hordes of them appeared on city sidewalks across the country overnight, stirring up a frenzy. That year 38.5 million people rode shared e-scooters, and in 2019 ridership more than doubled to 88.5 million. Public interest in their mysterious appearance led to my brief stint specializing in scooter coverage. 

I had a gut feeling that e-scooters were more than a short-term trend. They’re a common sight in many cities today, but they’re still struggling to find their footing in some places due to a slew of safety and regulatory issues. 

Regardless of what the future holds for e-scooters, I have that same feeling about recent developments in the rail industry. If 2024 becomes the year of the train, it could benefit the environment and local economies. With that in mind, I’ll have my eye on these three trending train topics via solutions journalism coverage this year.   

High-speed passenger trains are connecting major U.S. cities

In 2018, Brightline became the first privately-owned passenger rail line to launch in the U.S. in 100 years. At the end of 2023, it opened one of only two high-speed lines in the country — the other is a popular Amtrak line between Boston and Washington D.C., which tops out at 160 miles per hour after recent upgrades. Soon after, Brightline announced another high-speed project connecting Las Vegas and Southern California that’s set to break ground this year. That project will be all-electric, and the company estimates it will be twice as fast as traveling by car, with top speeds nearing 200 miles per hour. 

The high-speed train Brightline already operates takes passengers from Miami to Orlando in just 3.5 hours. Among all of its train routes, the company estimates that it prevents carbon emissions equivalent to removing 3 million cars from the road each year. That’s due to the efficiency of shared transportation, as well as the company’s use of solar energy and biodiesel, a renewable fuel typically made from fats like vegetable oils that produces less emissions. Its high-speed Flordia route uses diesel-electric trains. 

Amtrak may also expand its high-speed offerings soon. The federally chartered train operator is exploring a partnership with Texas Central to build a line between Dallas and Houston with an estimated travel time of just 90 minutes. The project won a grant from the U.S. Department of Transportation’s Federal Railroad Administration in December to further develop the plan and budget. 

The growth of high-speed rail isn’t all positive, though. The projects are costly and can be slow-moving. The Brightline track from Las Vegas to California, for example, is estimated to cost $12 billion, and the Texas project has been in the works since 2014. The safety of those living near Brightline tracks has also come into question. Due to their high speeds, the company’s trains have the highest pedestrian death rate of any U.S. railroad, the Associated Press reports. Brightline is developing patrol drones, erecting barriers around tracks, and working with suicide prevention groups in hopes of keeping people safe and away from the tracks. 

Will Mexico’s Tren Maya project truly benefit the Yucatan’s inland communities? 

The first trains to operate on the new Tren Maya rail line shuttled passengers from Cancún to Campeche, Mexico, in late December 2023. The goal is to provide transportation to 34 major locations across five states in the Yucatán Peninsula, including two airports and plenty of popular attractions. But the $28 billion project is still nowhere near finished and the opening rides were riddled with delays, the Associated Press reported last month. The Mexican government aims to have all 947 miles of the rail line operational by the end of February. 

Providing a route to inland locations is particularly important because a lack of highways and roads makes many of these areas less accessible than popular coastal towns. Along with improving connectivity, the train project is designed to boost and spread tourism across the region, and in turn, provide economic opportunity for more communities, according to a project statement.

But environmental activists, archaeologists and Indigenous people have criticized the project. They say that in the rush of development, not enough care was taken to prevent damaging the local ecosystem, freshwater sources and archaeological sites. In general, locals’ opinions on the project seem split. Over 80 percent of people polled in the region are optimistic about the economic benefits of Tren Maya, while others highlight issues like not being compensated for land they lost from the project, the BBC reports. 

Move over, diesel. Electric freight trains are coming through

In the fall of 2023, we saw the first ever 100 percent battery-powered, heavy-haul locomotive that’s ready to transit goods on main rail lines. The rail tech company Wabtec Corp. spent decades developing it, and recent advances in energy storage technology finally made it a feasible option, Alan Hamilton, the company’s vice president of engineering, told Canary Media. 

This doesn’t mean the whole train will be emissions-free, though. Multiple locomotives are typically used to pull one train. For now, Wabtec’s battery-powered locomotive will only replace one of its diesel-powered counterparts in a group. The battery-powered locomotive will work alongside the diesel-powered ones and recharge itself with regenerative braking — a method that uses an electric motor to capture energy from the braking system to recharge the batteries, according to Wabtec.

Still, the swap is expected to produce a double-digit drop in emissions and fuel use per train, according to the company’s estimates. The machine will start hauling iron ore in Western Australia this year. 

Wabtec is one of many companies working to reduce emissions from freight trains. The startup Intramotev, for example, turns individual rail cars into all-electric, self-driving versions that can go up to 100 miles on a single charge, Fast Company reports. Mining companies also began using its tech toward the end of 2023.

Images courtesy of Brightline

Last year we saw global brands speak out on voting rights, LGBTQ+ equality, expanding access to renewable energy and more. And at the World Economic Forum's annual meeting in Davos, Switzerland, this month, issues top of mind for business leaders included the rise of artificial intelligence (AI) and the need to uphold democracy as half the world's population prepares to vote in national elections in 2024. Along with another critical year in the fight against climate change, these issues are sure to be at the forefront for brands as we head into the new year. 

"Anti-ESG" backlash in the U.S. still has leaders worried 

Environmental, social and governance (ESG) principles are used to measure and mitigate an organization's impact on society and the environment. Companies use ESG principles to understand the impacts they have today, as well as their future risks, and make plans to reduce them. Some investors then analyze corporate ESG strategies as they decide where to put their money, with the philosophy that the companies planning for the future may be wiser long-term investments than those that aren't. 

By any other name, this type of auditing and risk assessment is standard business practice and certainly nothing new, but pushback from a vocal minority of politicians and pundits has it seeming downright scandalous in the U.S. Their arguments against ESG are scattered: Some take aim at investors for using ESG screens in decision-making, saying it harms financial returns, while others dismiss brand ESG strategies as lip service and "woke capitalism" that wastes shareholder money. The uncertainty that comes with the moving target has many business leaders concerned, with some saying they now talk less about ESG or use other terms like "sustainability," although they haven't actually changed their ESG strategies. 

In the early weeks of the year, the newswires are brimming with thought leaders sharing their perspectives about how business leaders should cope with this complex environment. Impact communicators including Carol Cone, Susan McPherson, Andrew Winston, and TriplePundit contributors Tina Casey and Amy Brown are among those to weigh in over recent weeks. 

Specificity over jargon came out as a key theme. Trading vague claims about "ESG leadership" for clear language that explains specific programming and its value makes it less likely a brand will draw ire from ESG critics or be accused of greenwashing by regulators. As Daryl Brewster, who leads the nonprofit Chief Executives for Corporate Purpose (CECP), told the Wall Street Journal earlier this month: “You can be anti-ESG. It’s hard to be anti-responsibility.” While critics may take issue with an acronym, it's much harder to make a compelling case against saving water and energy, reducing pollution, or protecting human rights. 

Even some conservative lawmakers now see the ESG debate as a political football they'd rather boot to the sidelines. In a letter to the U.S. House Financial Services Committee, free-market groups with center-right political leanings advised legislators to avoid passing "more bans or mandates targeting the investment decisions of individuals, pension funds, or businesses," Axios reported last week. 

A changing regulatory and reporting environment comes with growing pains

Outside the U.S., jurisdictions are moving to make it mandatory for large companies to publicly report how they impact people and the environment. Canada and Australia are among the countries that will mandate ESG reporting starting this year.

Meanwhile the European Union's corporate sustainability due diligence directive (CSDDD) came into force in 2023, requiring large companies to disclose their risks and impacts related to the environment and human rights. By 2026, companies selling goods and services in the EU will also be banned from using terms like “climate neutral” that rely on carbon offsets, which lawmakers say mislead consumers. 

In the U.S., California's mandatory climate reporting law will come into force in 2026, compelling around 5,500 companies doing business in the state to disclose their greenhouse gas emissions. Federal climate reporting guidance from the U.S. Securities and Exchange Commission (SEC) is still pending as conservative Congressional lawmakers launched hearings and probes into the prospective regulation. New research finds many of these lawmakers received a combined $155 million in donations from the oil and gas industry as they fought the SEC rule. After being pushed back several times, the release of the SEC guidance is now expected this spring. 

All of these various requirements popping up around the world present real challenges for global companies. Adding to the confusion is that many companies use different standards to report on their impacts today — including those from the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD). A new unified reporting directive under the International Sustainability Standards Board could aid business leaders who are "choking on the alphabet soup" of various reporting requirements, but in the near-term, adapting to the unified standard will be a task in itself heading into 2024, TriplePundit's Amy Brown reported. 

Book bans threaten free discourse and education in the U.S. 

In last week's edition of our Brands Taking Stands newsletter, we took a closer look at how lawsuits against U.S. financial funds that support entrepreneurs of color put racial equity efforts in jeopardy. Another issue that should be on business leaders' radar is the increasingly common and decidedly dystopian practice of book banning at U.S. public schools. 

The nonprofit Pen America tracked more than 3,300 instances of book banning over the 2022-2023 school year, an increase of 33 percent over the year prior. "Authors whose books are targeted are most frequently female, people of color, and/or LGBTQ+ individuals," it found. Toni Morrison's "Beloved" and Harper Lee's "To Kill a Mockingbird" are among the titles banned at some U.S. schools, Deborah Caldwell-Stone, director of the American Library Association's Office of Intellectual Freedom, told CBS News. 

An estimated 18 U.S. states have also moved to restrict how race and gender are discussed in the classroom — which advocates say erases the country's violent and racist history of chattel slavery while ignoring the experiences of women and LGBTQ+ people. 

To be clear, these moves are hugely unpopular with voters: 85 percent of respondents to a 2023 survey agreed that public school students "should learn about the history of racism and slavery in the United States and how it continues to affect us today." Even some conservative lawmakers seem to agree the book bans have gone too far. In Florida, among the states with the most book bans in the country, lawmakers are considering legislation to make it more difficult to challenge books en masse by instituting a $100 per book fee for challenges brought by people whose children do not attend school in a given district, independent journalist Judd Legum reported this week. 

Given how the U.S. public feels about book banning, it's surprising more brands haven't spoken out about the issue, and this is clearly an area for attention in 2024. 

U.S. abortion restrictions put employees and incoming talent at risk

In the 2022 Dobbs v. Jackson Women’s Health Organization decision, the U.S. Supreme Court overturned the federal protections for abortion that existed since the landmark Roe v. Wade case in 1973. In the months since, 14 U.S. states have passed laws that almost completely ban abortions, according to tracking from The Guardian. Others restricted access after six weeks of pregnancy, before many know they're pregnant. 

These bans carry dangerous implications for those already living in these states and also make others less inclined to move there, which could have a heavy impact on businesses and their ability to attract top talent, TriplePundit's Tina Casey observed earlier this month. For example, 66 percent of surveyed workers who do not live in Texas said its strict abortion ban would "discourage them from taking a job there," and 63 percent said they wouldn't even consider a job in a state that banned reproductive care, according to an amicus brief filed in a Texas case that seeks to clarify how the state's law is applied in medical emergencies. 

Shortly after Dobbs, large companies including Salesforce, JPMorgan Chase, Levi Strauss and Condé Nast publicly pledged to cover travel expenses for employees who need to leave their state for an abortion due to restrictions. Although helpful to some seeking care, pledges like these fail to account for emergency services — and in places like Texas, medical workers are not required to provide an abortion under existing laws, even in cases where the patient's life is at risk. 

Companies including the dating app Bumble signed on to the amicus brief in support of clarity on the Texas law for emergency medical providers and their patients. In her analysis, Casey sees moves like these as a new way for companies to find their voice on abortion care, without making moral judgment and instead focusing on how ambiguities in these laws can cause harm. 

What's on your mind in 2024?

What topics, trends and challenges are on your mind heading into 2024? Your feedback is a constant source of inspiration for our coverage, and we always love to hear from you. Please share any thoughts here, and here's to a great year ahead! 

Critics have raised plenty of fire and brimstone in their opposition to investments made through the lens of environmental, social and governance (ESG) principles, but most of that energy has gone to waste. The ESG movement continues to gain momentum globally, and research shows that anti-ESG laws passed in the U.S. had a limited impact. In fact, the only clear losers appear to be the very people that anti-ESG legislation ostensibly aims to protect.

ESG investing gains global momentum while facing headwinds in the U.S. in 2023

The firm Russell Investment has surveyed how the investment management industry integrates ESG principles for the past nine years. Its 2023 survey, released in October, observed “the United States remains mired in a contentious debate” over ESG. That presents a sharp contrast with global jurisdictions that have strengthened their ESG reporting mandates, most notably Canada, Europe and Australia.

The contrast is also reflected in the adoption of the Net-Zero Investment Framework, a set of guidelines to help investors align their holdings with the global push to cap temperature rise at 1.5 degrees Celsius this century. Russell found that 80 percent of the managers surveyed in Europe had already signed on, with the U.S. lagging far behind at just 20 percent.

Others including the sustainable investing asset manager Robeco also noted a growing "ESG backlash in the U.S." in 2023. 

The big question is how financial firms are handling the oppositional environment in the U.S. Some have simply decided not to use the acronym “ESG," without actually changing how they use ESG principles. Those taking this approach include the world's largest asset manger, BlackRock, CEO Larry Fink said at the Aspen Ideas Festival in June. 

Marjella Lecourt-Alma, CEO and co-founder of the ESG and risk management platform Datamaran, has noticed a similar shift in the way clients talk about ESG. “Some of them say we watch our words a little bit. They are bringing back things like 'corporate sustainability,'” she told TriplePundit in December.  

Kris Tomasovic Nelson, senior director and head of ESG investment management for Russell Investments, agreed. “ESG factors are increasingly driving investment decisions,” he told Pensions & Investments reporter Hazel Bradford earlier this month, but “the door is open to using different terminology.”

He hastened to note that strategies at many U.S. financial firms still include ESG principles, even if companies are more careful in talking about them, and said he doesn't see the U.S. situation impacting the global landscape. "Outside of the U.S., I don't see any slowing of momentum," he added.

Taking the anti-ESG bull by the horns heading into 2024

As of last year, 22 U.S. states adopted some form of "anti-ESG" legislation that seeks to limit how ESG principles can be used in investment decision-making or minimize investment in specific funds and firms, according to the law firm K&L Gates. Republican legislators in 12 different states enacted such legislation in 2023 alone, according to an S&P Global analysis. Many were “revised and weakened as they moved through the legislative process,” S&P reported, though they still have had a “chilling effect.”

In another strategy for navigating this complex landscape, some U.S. investors are taking advantage of vague language in these laws to forge ahead. 

Earlier this week, for example, Financial Times reporter Will Schmitt highlighted the case of the Texas Permanent School Fund, which deployed an opening in the state’s strict anti-ESG law to put $300 million into an energy transition fund under the Macquarie Green Investment Group. The investment occurred in 2022, shortly after the Texas state comptroller published a “blacklist” of forbidden firms that included Macquarie's energy transition solutions fund.

“The investment highlights how fiduciaries are finding ways to navigate gaps in rules designed by conservative officials to keep environmental, social and governance considerations out of public investment portfolios,” Schmitt observed.

In other states, fiduciaries are taking matters even further into their own hands. The Oklahoma Public Employees Retirement System, for example, avoided a potential loss of $10 million when its board voted to retain BlackRock and State Street as investment advisors, even though the two firms were on an anti-ESG blacklist compiled by the state treasurer, S&P reporter Karin Rives observed in an analysis published last week.

"If we thought that we could have abided by the law without hurting the pension fund, we would have done that in a heartbeat. But we have a fiduciary responsibility," Oklahoma's insurance commissioner, Glen Mulready, told Rives.

Some U.S. firms have also lobbied their representatives in state government for changes to proposed legislation, in hopes of preventing the worst damage.

U.S. public funds face outsized risk under anti-ESG legislation, new analyses show

Despite these workarounds, anti-ESG legislation is impacting public funds, and not in a good way. The supporters of anti-ESG legislation claim the laws are needed to protect the financial interests of pensioners and other members of the general public. However, they neglect to mention that financial firms can simply pack up and take their business out of state.

One such example occurred in Texas, where legislators passed an anti-ESG law in 2021. The new law immediately reduced competition in the municipal bond market, costing the small city of Anna an estimated $277,334 on its bond sale.

That’s just the tip of the iceberg. Texas cities could pay up to $532 million in additional interest on their bonds in less than a year under the legislation, according to an analysis from the University of Pennsylvania and the Federal Reserve Bank of Chicago. 

“In Indiana, a bill to limit ESG investing could cut state pension returns by $6.7 billion over the next 10 years,” former Maryland Attorney General Brian Frosh and former Maryland State Treasurer Nancy Kopp wrote in Bloomberg last year, while the Arkansas Public Employees Retirement System risks losing $30 million to $40 million annually.

Karin Rives of S&P Global also cited an analysis by Econsult Solutions Inc., which estimates that six U.S. states could be hit with $708 million in higher borrowing costs due to anti-ESG laws impacting municipal bonds.

In the face of these swift and damaging results, it is fair to ask how legislators and other public servants could miscalculate the impact of anti-ESG laws so badly, especially when they were warned of the risk. They're poised to lose more ground in 2024, as analysts including Thompson Reuters predict ESG will have a transformational impact on business models as more companies focus on reducing their Scope 3 supply chain emissions.

And investors will follow the money, as they always have.

Mining, the process of extracting useful materials from the earth, cannot be done without producing a negative environmental impact. While the increasing use of renewable energy means there may be a reduction in mining for coal and other fossil fuels, this does not signal the end of humankind’s extractive industries. Instead, at best, it will merely lead to a shift in focus.

The electrification of transportation, for example, means valuable minerals such as lithium, manganese and cobalt are in high demand — not just for our cars, but for our phones and other electronic devices, too.

Mining is not going away, but that doesn’t mean it cannot advance to be better and safer while reducing the environmental impact.

“The biggest problem with mining today is the social license to operate,” said Thomas Krom, environment segment director at the infrastructure software company Seequent. 

Seequent develops subsurface modeling technology that shows what is below the earth’s surface in a specific location. TriplePundit spoke to Krom, a hydrogeologist with a background in engineering, about the company’s software tools that are deployed in the mining industry.

The brute force of digging things out of the ground — a practice that goes back to the dawn of the Industrial Revolution — may seem like an unusual pairing with the high-tech, virtual world of software technology. But utilizing Seequent’s software makes the process of identifying resources to mine more efficient, Krom said. 

This precision prevents random drilling and reduces environmental damage. For Seequent’s customers, it reduces the time needed to set up mining operations by providing highly accurate resource locations.

Without this software, locating a site for mining typically goes something like this: You start with a geological map that indicates that a certain resource is available to mine or look in areas where resources were found historically. Then, you sample and survey the land before any new mining operations begin to determine the likely location and viability of a mining project. 

Traditionally, the survey would entail drilling holes in the ground. These days it's possible to survey land with electromagnetic remote sensing techniques, which involve gathering data about the earth by scanning it from above using a helicopter. This method allows greater areas of land to be surveyed more rapidly than older methods. 

The important point to understand is the information these modern remote sensing techniques provide was impossible to get before — namely, measurements of resources up to thousands of feet beneath the surface. That’s game-changing compared with traditional surveying methods.  

These electromagnetic surveys collect massive amounts of data, Krom said. That’s where Seequent comes in to make sense of all the information collected. Its software processes and filters the data and turns it into useful information. Then, it uses the data to create an accurate three-dimensional picture of the location of the different types of resources underground (see above). 

The information can be continually updated, too. Even when drilling begins, new data can be fed back to update it. “The tool lets you always have the best possible understanding of what is around you, and if it’s a resource or not a resource,” Krom said.

Accurately understanding what is beneath the surface also leads to safer mining operations by, for example, knowing the structure and stability of the land around a proposed mining location. And by more accurately targeting resources, mining operations can also reduce waste streams and water usage. 

The tools Seequent provides are not just valuable for mining minerals. The company's software is also used in collaboration with nongovernmental organizations to locate underground water resources and has even identified locations for safely burying nuclear waste, Krom said.

The software is deployed widely in lithium mining across the globe and can locate any mineral that is commercially mined today, Krom said. It allows these mining operations to be more targeted, efficient and less environmentally harmful.

While mining inevitably negatively impacts the environment and no tool in itself is able to prevent the poor policymaking that leads to a negative social or environmental impact, this software can certainly help to avoid negative impacts when it’s in responsible hands.

Humanity must adapt to deal with the impacts of climate change as we work to reduce emissions and hold global temperature rise to 1.5 degrees Celsius. Despite its drawbacks, artificial intelligence (AI) has an important role to play in both climate solutions and climate change adaptation, alongside other technologies like cloud computing.

When programmed and used correctly, AI’s ability to synthesize and interpret data to find patterns and predict outcomes makes it a valuable tool with significant potential for positive change. It’s no surprise that technology-driven solutions were prevalent in 2023 or that they continue to be a big deal as 2024 begins. Here are five climate solutions that hit our radar in 2023 that we will continue to watch this year. 

Reducing carbon emissions from aviation

Limiting carbon emissions isn’t just about the biggest sources of pollution. Reducing emissions from smaller sources can add up to significant gains or losses in the long run. That’s the idea behind EMMA (Environmental and Movement Monitoring for Airports), a cloud-based AI management platform that cuts unnecessary taxiing time at airports around the world.

The average taxi time for departing flights is over 16 minutes, according to the U.S. Federal Aviation Administration. The average is nearly nine minutes for arrivals. While that might not sound like much, the wasted fuel and unnecessary emissions add up in the end. By better predicting how delays and disruptions will impact arrivals and departures, EMMA helps air traffic controllers improve their decision-making and efficiency. This dynamic enables reduced taxiing time and lowers unnecessary carbon emissions. 

Founders Mohammad Hourani and Wisam Costandi spoke with 3p last year about the implementation of EMMA and their plans for its future. They estimate that cutting even a minute off the average taxi time could save a significant amount of emissions.

Read more about EMMA and reduced taxiing time here.

Limiting peak power use

Logical Buildings has been around for a decade. Through its GridRewards app and SmartKit AI software, users can plan their energy consumption to avoid peak use times — leading to fewer carbon emissions from peaker power plants. These plants are brought online to help meet demand during peak hours. They are fossil fuel intensive and emit substantially more carbon than base load plants. Logical Buildings’ software allows residential customers and building operators to plan to use the most energy when renewable energy is readily available. Recently, the company stepped up its game to include not just multi-family housing and larger building operators but individual users, as well.

“That's really one of the key prerequisites to empower people to combat climate change — to know what to do and when,” Jeff Hendler, the company’s CEO, told 3p. “Certain times of day, there's more carbon being generated by the grid. And if you were to know that, you had that visibility, that access to information as an end user, that will change your decisions and how you behave.”

Read more about Logical Building’s tech here.

Assisting the grid transition

Transitioning from fossil fuels to renewables is a core strategy that world leaders are relying on to slow increasing global temperatures, but the energy transition comes with tough challenges. Electrical grids were originally developed around fossil fuels, a supply of which is delivered from power plants 24/7 and can be increased by peaker plants when demand is high. Renewables don’t deliver energy in the same way. Their energy supply fluctuates based on things like sunlight and wind.

That lack of a steady flow can destabilize the grid and, in the worst case, cause issues like blackouts. While it’s not feasible to build a new grid from scratch, technology-driven climate solutions can hep.

This is where the cloud computing power of Reactive Technologies comes in, measuring stored energy and system strength. “Using this system, operators can accurately map any deviations in levels of voltage and electrical frequency, allowing an almost instantaneous response to keep the grid in balance,” Frederico Rauter, chief revenue officer at Reactive Technologies, told 3p. “With GridMetrix in place, operators around the world can reduce the risk of grid instability and bring more renewables online, safely and cost-effectively.”

Read more about how Reactive Technologies is aiding the energy transition here.

Predicting flash floods

Highly sensitive, accurate forecasting and robust early warning systems are even more vital as natural disasters increase in both frequency and destructive force. As far as sounding the alarm on extreme weather events goes, flash floods present a particularly difficult challenge — currently, only very short notice is possible. A partnership between IBM and the University of Illinois strives to change this using an AI model capable of anticipating heavy rainfall and flash floods, starting in the Appalachian Mountains.

“It's very important for local populations, because in mountainous regions … the small towns, the villages, schools, infrastructure, they're all located at the lower elevations for the most part because that's where access is easy,” Ana Barros, professor and engineering department head at the University of Illinois, told 3p. “If one of these flash floods comes through, it tends to kill many people and destroy infrastructure. It's really the complete disaster in terms of all of its social and economic implications.”

If the team is successful, the hope is that the same AI model could be calibrated to work in other mountainous regions around the world. By integrating this enhanced forecasting with early warning systems, significant loss of life could be prevented. 

While it’s too early to know how this will play out, the ability to better predict disasters like flash floods could tie in with the U.N.’s Early Warnings for All initiative. The effort aims to make extreme weather notifications available for everyone on Earth by the end of 2027, regardless of where they live or the types of storms involved. Of course, it remains to be seen how far ahead the AI will be able to predict flash floods and what stakeholders will do with that information.

Read more about IBM and the University of Illinois’ work to predict flash floods here.

Using technology to measure the success of climate solutions like reforestation

IBM recently partnered with NASA to develop new AI models capable of interpreting satellite data from a specific geographic location, learning from it, and applying patterns and predictions to real-world circumstances to help communities combat and adapt to climate change.

In the case of Kenya’s natural water towers — mountainous, forested regions that collect and filter the rain and snow that eventually fills rivers, lakes, springs and the groundwater supply — this partnership seeks to measure outcomes from the government’s conservation and reforestation efforts in mountain rainforests.  By determining which tactics are working, the AI model informs decision-makers on how to best focus their efforts.

Although IBM’s role in Kenyan sustainability efforts is relatively new, it shows that climate solutions can be measurable. The technology can motivate individuals, businesses and governments to support projects by providing evidence of tangible payoffs. The AI models developed by IBM also demonstrate the potential for such technology to be used anywhere that satellite images can give before and after pictures of sustainability efforts. By utilizing AI in this manner, we can avoid spinning our wheels on ineffective methods and more accurately focus our actions on what’s proven to work. 

While the model is already yielding some results, IBM intends to tune it further with higher-resolution photos, Juan Bernabe-Moreno, the director of IBM Research Europe in Ireland and the U.K., told TriplePundit. Higher resolution will improve the accuracy of the model’s interpretations.

Read more about how IBM and NASA are helping the Kenyan government achieve its sustainability objectives here.

Moving forward with AI and technology-driven climate solutions 

AI faces substantial criticism for promoting its programmers’ biases, threatening jobs and more. But it can also be used to do a lot of good, especially in the realm of climate solutions. It behooves humankind to make the most of it — and other technology options like cloud computing — in ways that can benefit the planet. We’re excited to see how these technologies develop in 2024, as well as what new climate solutions the year may have in store.

Extreme weather is becoming more common, making the ability to better predict major weather events an increasingly important part of climate adaptation. Better forecasting already saves lives, as providing advanced notice of the need to evacuate or take shelter can prevent the significant loss of life a disaster may have otherwise caused, and artificial intelligence (AI) could prove to be a game-changer in this regard. AI’s ability to use data to make predictions from the patterns it finds suggests that its forecasting ability could drastically improve with further development. 

The tech company IBM is among those bringing AI into the sphere of mitigating the impact of weather-related disasters, and together with NASA, it's hard at work on revolutionary foundational models. These models learn from a broad dataset to make using them for many different tasks quicker and easier, as opposed to task-specific models that are trained with data designed to teach them to do one job. This way, a dataset doesn’t need to be painstakingly created for each new task, because the AI can apply the information it’s learned from other situations to teach itself.

Among the projects its working on, IBM partnered with the University of Illinois to develop a foundational model capable of anticipating heavy rainfall and flash floods in the Appalachian Mountains. 

The problem of predicting flash floods

Rain doesn’t fall the same way everywhere. The result depends on geography. The same storm that may drench flat land with few negative consequences becomes much more intense in mountainous regions, said Ana Barros, professor and engineering department head at the University of Illinois. The terrain in the southern Appalachian Mountains essentially captures the storm, causing an extreme amount of rain to fall at once.

“That's what the flash flood is about,” she said. “You are having a very strong storm system and having a very heavy precipitation storm that comes through and stays in place for a little bit — for 15 minutes or so.” 

Precipitation is one of the most difficult types of weather to predict, Barros said. It becomes even more complex to precisely predict the location, time, and amount of rainfall in mountainous regions because of the way storms interact with the terrain. 

Existing weather prediction models can be improved by training them on the wealth of data that is now available to allow for more advanced warnings. This is where the AI model that IBM and the University of Illinois are developing comes in. 

At present, warnings are only available about six hours before a flash flood is expected, Barros said. Even then, it’s hard to quantify just how bad a flood may be. She’s hopeful that the improved model will predict flash flood risk 18 to 24 hours ahead of time. Increasing the warning time empowers people, authorities, and emergency managers to plan accordingly and avoid dangerous situations. 

“We will not be able to actually stop the [storm],” Barros said. “But what we can make sure of is that people are not there.” 

AI model in progress

The new foundational AI model is still in its infancy. The University of Illinois team, led by Barros, is part of the IBM Sustainability Accelerator — a social impact program that supports projects using tech to help vulnerable populations address environmental threats. 

“We kick off every project with what we call the IBM garage, which is a process for unpacking these needs, hearing from the community, doing early design work for the technical solution that would come up with the project, and writing a technical roadmap for its implementation,” said Michael Jacobs, sustainability and social innovation leader for corporate social responsibility at IBM.

It’s not just about improving the AI model’s capabilities, either. Once that process is completed, the technology will be scaled up so its insights can be shared with the affected community, Jacobs said. From there, community members will be taught to interpret those insights.

“There are human limitations to all of this,” he said. “Even if we build the perfectly trained or tuned model for this specific use case, the question ... needs to be answered: How are the insights actually implemented or leveraged to help people?”

It’s one thing to know a flood is coming, but another to know what to do about it, Jacobs said. That’s why engaging locals and teaching them to use the tool is important. 

Improved outcomes are on the horizon

“Last year we had almost 100 deaths in the southern Appalachians,” Barros said. That’s what the team is aiming to prevent in the future. While the Appalachian Mountains are the starting point for the AI model, there’s potential to expand what is learned there to other regions. 

Though this AI-enabled advanced warning is focused on flash floods, “There's another level of forecasting that can be done, which has to do with landslides, because they often happen together,” she said. “There's a lot of hazard predictability and hazard response planning that this kind of work can help.”

Improved flash flood warning and response are proven to save lives. By increasing the amount of time people have to prepare and leave the area, foundational AI models are integral to climate change adaptation.

Wind power accounts for about 10 percent of the electricity in the U.S., representing a remarkable growth spurt in recent years. Still, with the climate crisis looming overhead, the wind energy industry needs to grow even further, and faster, than ever before. Competition for land can pose hurdles, but wind industry innovators are coming up with solutions that open up new pathways for rapid growth.

TriplePundit last rounded up five wind energy trends to watch back in 2020. Much has happened over the past four years, and here are the trends we’re watching now.

1. Repowering old wind farms

Wind turbines typically have a lifespan of about 20 years. Assuming the land remains permitted for wind energy, the turbines can be replaced with new, more powerful models as they age out.

These existing sites are already procured, zoned and prepared for wind development. That includes transmission infrastructure and road access, helping to speed up the timeline for a repowering project.

The repowering industry is already scaling up. GE Renewable Energy's RePower program, for example, has upgraded 2,500 wind turbines over 40 different wind farms in the U.S., since launching in 2017. “On average, wind turbines repowered by GE have seen a 20 percent increase in annual energy production,” according to the company. 

Some repowering projects are designed to reduce the number of turbines on the site. In Illinois, for example, the firm Leeward Renewable Energy is completing an upgrade of its 80-megawatt GSG Wind farm. The wind farm’s 40 turbines and their towers will be replaced with just 26 new, more powerful models. In addition to producing more energy from the same site, Leeward expects to reduce operational costs, too.

Other repowering projects keep the supportive tower structures and only replace the turbines and the blades, potentially helping to shorten the construction timeline.

The Clean Energy branch of AES is anticipating a 20 percent increase in output from the 100.5-megawatt Clinton wind park in upstate New York after it completes the replacement of old 1.5-megawatt turbines with more powerful 1.62-megawatt models. New, longer turbine blades will contribute to the improved output.

Replacing the blades alone can also make a big difference. AES is expecting a 20 percent increase in output from its Ellenburg site in New York after it refurbishes the existing 54 turbines and installs new, longer blades.

2. Floating offshore wind turbines

Offshore wind presents another opportunity to accelerate the wind energy industry. That’s easier said than done in the U.S, where offshore wind energy projects have already encountered opposition. In addition, two-thirds of the U.S. coastline is too deep for conventional offshore wind turbines.

New floating turbines can help resolve both obstacles. Instead of sitting on monopiles fixed into the seabed, floating turbines rest on platforms tethered to the ocean floor with slim cables. They can be placed farther offshore than conventional turbines, alleviating the aesthetic concerns raised by coastal communities.

One early leader in the floating wind field is the U.S. startup Principle Power. The company has been scaling up commercial production with plans to deliver 300 floating wind turbines by 2030.

Under Joe Biden and Kamala Harris, the U.S. federal government has also set a goal of 15 gigawatts in floating offshore wind by 2035. In December, the nation took a big step toward that goal when five floating wind companies won federal leases along the California coast, totaling a potential capacity of more than 4.6 gigawatts.

3. Vertical axis wind turbines at sea

Vertical axis wind turbines represent another way to open up new opportunities for wind energy in the U.S. In contrast to the familiar long, tall, three-blade configuration of horizontal axis turbines, vertical axis turbines have a more compact, complicated shape.

Vertical axis turbines were once thought to be best suited for urban areas where space is at a premium. As it turns out, the compact footprint of vertical axis wind turbines also makes them a good fit for floating wind farms. Because they are inherently stable, they reduce, or practically eliminate, the bulky, expensive platforms needed for conventional floating turbines.

The Swedish company SeaTwirl, for example, has developed a turbine in which three vertical blades circle around a central axis. The turbine sits on a single, vertical floater that is stabilized by a satellite of small buoys.

The Norwegian company World Wide Wind has also come up with a platform-free design. Instead of buoys, the turbine is self-stabilized by two sets of vertical axis blades that rotate in opposite directions.

Here in the U.S., the Energy Department is funding floating turbine innovations that cut costs. Sandia National Laboratories for example, has introduced a new, teardrop-shaped turbine with a vertical axis. It replaces the turbine tower with tension cables, in addition to eliminating the platform.

4. New territory for small wind energy turbines

Small-sized wind turbines represent another untapped resource. Today, they are mainly used in rural and suburban areas, where land is available for the turbine towers at homes as well as farms and businesses.

For urban areas, one solution would be to place the turbine on a rooftop instead of a tower. In the past, that posed a number of technology hurdles, as well as competition for roof space from the solar industry.

Those obstacles are beginning to fall. Among the new solutions to emerge are hybrid designs that pair wind turbines with solar installations. Last September, the World Economic Forum took note of a hybrid vertical axis wind and solar rooftop system developed by a French startup called Unéole. Instead of competing for space on the existing roof, the turbines are placed under a new solar roof for even more renewable power generation.

A U.S. startup called Accelerate Wind has developed another type of solution. Its small horizontal-axis turbine is designed to sit on the edge of a roof, leaving plenty of space for other uses in the middle.

Yet another approach involves compact, standalone hybrid systems comprised of both solar panels and wind turbines. One example is a leaf-like turbine designed by the U.S. firm New World Wind. It can be arranged in tree-like clusters, with or without solar panels, to double as a form of urban sculpture.

5. Harvesting slower wind speeds

Regardless of their size or shape, wind turbines are rare in areas of U.S. where wind energy is uneconomical due to low wind speeds. That includes the Southeast, the Gulf Coast and parts of the East Coast.

New technology can boost the economic case for low-speed wind turbines in these areas. The question is whether or not they will be commercially available any time soon.

But, according to the National Renewable Energy Laboratory, this technology is on the horizon. In September, the lab reviewed up-and-coming innovations likely to reach the market before 2030. With these in hand, NREL estimates that the contiguous U.S. could economically tap into 80 percent more wind potential than it does now.

Among the elements identified by NREL are new turbines specially designed for low-speed winds. New cost-cutting manufacturing systems also play a role, including spiral welding and 3D printing. NREL also took note of new “climbing” cranes that reduce the cost of taller wind turbine towers, along with new strategies for reducing the cost of transporting longer turbine blades.

Another new technology to emerge involves control systems that tilt or turn individual turbines in a wind farm to avoid blocking the wind from one turbine to another, NREL observed.

Technology is only part of the solution to grow the wind energy sector

Against this backdrop of activity, opposition to wind development continues. A new study published in September notes that opposition can be especially intense when large wind farms are involved. Race and wealth are also factors in the opposition to large wind projects.

“This suggests an environmental justice challenge we term ‘energy privilege, wherein the delay and cancellation of clean energy in wealthier, Whiter communities leads to continued pollution in poorer communities, and communities of color,” the researchers from the University of California and University of Michigan explained.

The nature of the opposition indicates that a more vigorous effort to remedy environmental equity and justice issues could help accelerate wind development in the U.S., but that is a job for policymakers to tackle. 

"The inseparable twin of racial injustice [is] economic injustice," Rev. Martin Luther King Jr. wrote in a 1958 essay titled "My Pilgrimage to Nonviolence." When it comes to racial equity in the United States today, "the statement is still real," said Lenwood V. Long Sr., CEO of the African American Alliance of CDFI CEOs, a coalition of Black-led community development financial institutions, credit unions and venture capital firms. 

Indeed, the income gap between white and Black workers in the United States has actually increased since the 1970s, and districts serving predominantly students of color receive substantially less funding on average than those serving mostly white students. Black applicants are also nearly twice as likely as white applicants to be denied mortgage loans to purchase a home, one of the most powerful vehicles for building generational wealth. Black Americans who do own homes are more likely to have them appraised for lower than their true market value. These factors and more add up to Black families having an average 24 cents in wealth for every dollar owned by white families. 

Efforts to push racial equity forward hinge on interventions to address these very problems. Pointing to a chilling legal environment, Long and other advocates see these efforts as under attack. 

The U.S. Supreme Court effectively outlawed affirmative action at colleges and universities in a pair of cases decided in June of last year. And 2023 lawsuits led by conservative groups targeted funds aimed at investing in business leaders of color — including a suit against the Fearless Fund, which invests in women entrepreneurs of color, and the LiftFund supporting women and minority entrepreneurs. 

Both affirmative action and investments in business leaders of color target longstanding areas of discrimination. Affirmative action dates back the Civil Rights Movement as a means to address racial discrimination in education and hiring, while funds like Fearless and Lift aim to correct imbalances in venture capital that result in Black entrepreneurs receiving less than 2 percent of all VC funding. 

"What they're trying to do is go at the vital organs of the Black community — education and economic development — and say, 'Look here, you're trying to close the racial wealth gap. We’re going to stop you.’ And I think it's shameful,” Long said. "As vital as your heart is, as your lungs are, as the blood pumping in your veins, what is more vital to a just economy than education and economic development?" 

In the lawsuits against investment funds in particular, the complainants argue that, by targeting specific entrepreneur communities, the funds discriminate against other entrepreneurs based on race. But narratives like these don't tell the whole story of where that money really goes, Long said.

In a murky legal landscape, racial equity programming can be labeled discrimination 

The African American Alliance of CDFI CEOs represents 76 Black-led community development financial institutions (CDFIs) and credit unions serving customers across all 50 U.S. states. Like all financial institutions, CDFIs and credit unions take in deposits from customers and use the money to make loans and investments to grow their bottom lines. But unlike big banks, which tend to seek out the largest and most lucrative investments possible, CDFIs and credit unions invest their money locally in the form of loans to entrepreneurs and for local development projects. 

Along with providing capacity-building support, the Alliance runs the Black Renaissance Fund to provide its members with grants and loans. "Our fund is designed to go to Black-led CDFIs only, and they lend to their members," Long said. "They lend to entrepreneurs. They provide housing. They provide capital. If you follow the money flow: We're Black, they're Black, but the outflow, the output, is to not only Black and Brown organizations and entrepreneurs, but they're white as well. So, the final product of that, where the money goes, is to everybody."

Still, in the current legal environment, the simple fact that the Alliance is a group for Black-run institutions in particular, and that it invests in those institutions through the Black Renaissance Fund, could potentially put the organization in the crosshairs. 

"We could be very vulnerable to somebody knocking on our door saying, 'You can't do this because you are lending to only Black-led CDFIs,' without looking at the output or the outcome of the dollars invested," Long said. "But, you know, let 'em come. We're not retreating. We're not changing anything. And we'll do whatever we need to do to fight back, to push back, to claw back, because enough is enough. We need conscious people to begin to look at what's happening and realize … what it is: It's a racist attempt to cripple and stop the progress of Black America in education and economic development. That's what it comes to."

Returning to the roots of the Civil Rights Movement to push racial equity forward today

Like targeted funds such as the Fearless Fund and LiftFund, the Alliance's work aims to counter longstanding racial imbalances: White-led CDFIs own more than six times the assets of Black-led CDFIs in the U.S., according to 2020 research from the Hope Policy Institute. 

Once the only way for Black Americans to access financial services, the number of Black-led CDFIs and credit unions is now dwindling. "The Black credit union used to be the norm — it was the only resource that Black folks could use to get a loan, to get a car, to get a house," Long said. "We created them, and then we left them suffering. And many of them are now closed. For example, in North Carolina, at one time there were 18 Black-led CDFIs or Black credit unions. There’s not one that’s Black-led today. All of them are under some other institution." 

The Alliance has been supporting Black-led CDFIs since 2018, but it's not enough on its own to keep these organizations growing. Long called on Americans, and particularly Black Americans, to consider banking with these institutions to provide them with the capital they need to keep making loans and investments in their communities. "We are making white banks richer and starving our Black banks," he said. 

If you look back at King's words, he felt the same way. "We've got to strengthen Black institutions," King said in his last speech before he was assassinated, delivered in support of striking sanitation workers in Memphis, Tennessee. "I call upon you to take your money out of the banks downtown and deposit your money in Tri-State Bank," he continued, referring to the Black-led bank founded in Memphis in the 1940s. "We want a 'bank-in' movement in Memphis." 

While most know him as a civil rights visionary, King was also a fierce proponent of economic equity as essential to a truly racially just society. He led the charge for fair housing through the Chicago Freedom Movement and spearheaded the Poor People's Campaign to bring together "poor people of all colors and backgrounds to assert and win their right to a decent life and respect for their culture and dignity," to name just two examples. 

Many, including his oldest son Martin Luther King III, speculate it was this work on poverty that got King killed, but there's much all of us can do to honor his legacy and continue his fight today. 

Beyond the general public giving a second thought to where they bank, Long called on companies and financial institutions to take a closer look at the investments they make in support of community development projects — and where that money really goes. The Alliance offers a tool to help with this, called the African American Equity Impact Score Card. He also challenged individuals to put more of their retirement investments in Black-run institutions and for organizations like Black churches — already among the largest investors in Black-run financial institutions — to earmark a certain percentage of their donations to hold in Black-led CDFIs and credit unions. 

"We need to go back and not forget, and again to make investment — not just penny investment, we need dollar investments in Black-run institutions that are doing the work in Black communities, run by people who spend their lifetimes building up housing or giving loans to Black entrepreneurs," Long said. "We have economic attitude changes that we have to make, and we have to look at how we invest in our communities that we care about." 

In upcoming coverage on TriplePundit, we'll take a closer look at how organizations can analyze their investments and their balance sheets through the lens of racial equity, and what leaders at financial institutions learned when they did.