New Report: Green Investments Don’t Always Reach Where They’re Needed

The Greenlining Institute Urges Financial Firms to Consciously Address Communities of Color 

Contact: Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758 (cell)

OAKLAND, CALIFORNIA – Investment in green technologies, clean energy and climate adaptation continues to grow, and financial institutions are taking an increasing interest in this field. But many of these investments never reach communities of color and low and moderate income communities that are most in need of both the environmental and economic benefits of such investments, a new report from The Greenlining Institute finds.

“Lots of money is going into clean energy and other green technologies and programs, but far too few of those dollars reach the communities that need them most,” said report co-author Rawan Elhalaby, Greenlining’s Senior Economic Equity Program Manager.

The report, Investing in Climate Equity, looks at how banks and financial institutions presently support green investments in low and moderate income communities and communities of color, and what might be gained by incorporating green investments into the Community Reinvestment Act

It also considers how local and state governments have incentivized investments by financial institutions in green technologies in underserved communities and how such investments can translate into wealth and asset building opportunities for these communities. Finally, it makes recommendations for banks and community development financial institutions, urging them to be bolder and more specific about using green investments to help communities of color become healthier, more sustainable and more prosperous, and proposes regulatory changes to help make this happen.

To learn more about The Greenlining Institute, visit www.greenlining.org.

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THE GREENLINING INSTITUTE
A Multi-Ethnic Public Policy, Research and Advocacy Institute
www.greenlining.org
@Greenlining

Gov. Newsom’s $227 Billion Spending Plan Includes Stimulus Cash, Rental Relief, Job Training, and More

By Tanu Henry
California Black Media

Gov. Gavin Newsom sounded upbeat when he announced at a press briefing Friday afternoon that he has submitted a $227 billion budget for the 2021-22 fiscal year to the State Legislature for approval.

The spending plan reflects a brighter picture than the gloomier one Newsom presented last summer when he projected a steep budget shortfall of more than $50 billion. In this proposal, the governor’s office is estimating that there will be a budget surplus of about $15 billion over the 2020-21 fiscal year, with nearly $3 billion stashed in the state’s operating reserve.

“In these darkest moments of the COVID-19 pandemic, this budget will help Californians with urgent action to address our immediate challenges and build towards our recovery,” said Newsom. “As always, our Budget is built on our core California values of inclusion, economic growth and a brighter future for all.”

The proposal includes significant investments intended to shore up and revive the state economy battered by the COVID-19 global pandemic. It proposes $2.4 billion for a one-time payout of $600 per individual from the “Golden State Stimulus” fund for the lowest earning Californians, many of them essential workers, who have been hit hardest by the global health crisis and the economic dip it caused. The majority of workers that have been affected are African American, Hispanic or from other ethnic groups in California and across the country.

To ensure a swift economic recovery, the governor has allocated $372 million to facilitate the distribution and administration of COVID-19 vaccines across the state.

Sen. Steven Bradford (D-Los Angeles), chair of the California Legislative Black Caucus and the only African American lawmaker in the upper house of the California legislature, says he is pleased that the governor’s budget invests in equity. He told CBM that he will work with the governor’s office to make sure the proposals in the plan, particularly the relief for businesses, benefit Black Californians.

“Governor Newsom’s 2021-2022 budget proposal reflects what we are all hoping: that things are getting back on track and in a better way. The COVID-19 pandemic continues to devastate California, but thanks to the swift actions taken last year by the Legislature and the Governor, we are in a strong position to combat this crisis and rebuild our economy,” Bradford said

“We do not want to go back to where we were. We want a more just economy moving forward,” the senator added.

Workers at hospitals, grocery store clerks, public transportation operators and more had to continue showing up to work through the most difficult and uncertain phases of the pandemic last year. And entrepreneurs like barbers and beauticians and workers in retail, food and beverage service, hospitality and the leisure sectors suffered the most job losses. Newsom announced $777.5 billion in his budget for economic recovery, including assistance to businesses of all sizes – more than $500 million will go to small businesses — and money to support the state’s minimum wage increase to $14.

Bradford, who is also chair of the Senate Public Safety Committee, applauded Gov Newsom for including funding for improving prisons and criminal justice reform efforts.

“As Chair of the Senate Public Safety Committee, I am also pleased to see funding for the maintenance of California state prisons, Los Angeles County, use of force investigations by the Department of Justice, and rehabilitation and educational programs for our inmate population,” he said. “Following the work I began in 2018 with the California Cannabis Equity Act, I am delighted to see the permanent funding of the state’s local equity grant program, which is a momentous step toward a fair and equitable cannabis market.”

The money for COVID economic recovery comes at a time when there looms the threat of another economic downturn. According to numbers released by the U.S. Department of Labor Friday, payrolls across the country decreased by 140,000 jobs in December. It is the sharpest drop in jobs since last April. The economy has not fully bounced back since the beginning of the pandemic last march when it lost 22.2 million jobs. Only 12.4 million jobs have been recovered so far.

Although the governor’s budget projects optimism, and it provides substantial funding for critical ongoing government priorities like education, transportation public safety, higher education, health care and green initiatives, it is short on details. It does however include a clear high-level breakdown of where the money

will be spent – if not exactly how. For example, Gov. Newsom calls for $2 billion to help schools across the state to reopen in the next couple of months. The budget also allots $85.8 billion for schools, which includes teacher training, early childhood education programs, teacher recruitment and money to extend learning into the summer. The governor is also proposing that the state invests $500 million in low-cost housing tax credits; $1.75 billion to continue purchasing motels to house the homeless under “Project Room Key;” and $353 million for job training and creation programs.

Over the next 5 months, Gov. Newsom says he and the Legislature will be working to hash out, distill and define budget priorities. Through the process, they will determine how and at which level of government – state, county or municipal – the monies will be spent. Then in May, he will present his revised, and more detailed, budget to the legislature for final approval before the fiscal year begins in July.

Senate Republicans say over 19,000 small businesses in the state have had to shutter since the pandemic began. Therefore, they are urging the governor to increase funding for them.

“Over the past ten months, the Governor’s shutdowns and COVID-19 challenges have made it difficult for millions of Californians,” said Senate Republican Leader Shannon Grove (R-Bakersfield) and Senator Jim Nielsen (R-Tehama) in a statement responding to the governor’s budget.

Some environmental groups complained that the budget redirects cash to emergency preparedness, “short-changing” programs that provide funding to underserved communities, some of them places where Black Californians live.

“The Greenhouse Gas Reduction Fund is meant to cut pollution in our most impacted communities,” said CEO Debra Gore-Mann, president of the Greenlighting Institute, a public policy and research organization based in Oakland. “Funding for wildfires should come from the utilities whose recklessness led to so many problems.

Gov. Newsom says now that he has presented his budget, the hard work begins.

“The Budget makes progress towards the goal I set when taking office to harness California’s spirit of innovation and resilience and put the California Dream within reach of more Californians,” Gov. Newsom said.

 

Newsom Budget Proposal Short-Changes Environmental Equity Programs

Contact: Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758 (cell)

OAKLAND, CALIFORNIA – Gov. Newsom’s proposed 2021-22 California budget short-changes programs financed by the Greenhouse Gas Reduction Fund that reduce pollution and boost the economies of underserved communities, The Greenlining Institute said today.

“The Greenhouse Gas Reduction Fund is meant to cut pollution and greenhouse gases in our must impacted communities,” said Greenlining Institute President and CEO Debvra Gore-Mann. “Funding for wildfires should come from the utilities whose recklessness led to so many problems, so that we can maximize funds needed to fight pollution and build resilience in low-income communities of color.”

Sanchez noted that while some of the expenditures listed in the Cap and Trade Expenditure Plan include important funding for programs with strong equity design and implementation like Clean Cars for All, it also continues to prioritize funding for AB 617 implementation, which needs fundamental, equity-centered improvements in order to better meet community needs — including emission reductions that are accountable to community priorities. “Real equity addresses the community’s priorities, driven by the needs of those in the most polluted and underserved neighborhoods,” said Greenlining Institute Environmental Equity Director Alvaro Sanchez. “California has great programs designed to do that, like Transformative Climate Communities and the Regional Climate Collaboratives created by SB 1072, but those programs get no money at all in this proposal.”

While the proposed budget includes important investments in broadband, housing, clean transportation and relief for families and small businesses, including $575 million in much-needed aid for small businesses and nonprofits, gaps remain. For example, critical investments are still needed to eliminate growing utility debt for low-income families, Gore-Mann said. “These important programs should be funded by taxing California’s growing population of billionaires.”

To learn more about The Greenlining Institute, visit www.greenlining.org.

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THE GREENLINING INSTITUTE
A Multi-Ethnic Public Policy, Research and Advocacy Institute
www.greenlining.org
@Greenlining

Greenlining Institute Congratulates Georgia Winners, Urges Bold Agenda

Contact: Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758 (cell)

OAKLAND, CALIFORNIA – The Greenlining Institute congratulated Rev. Raphael Warnock and Jon Ossoff today on their victories in Tuesday’s Georgia Senate runoff elections. Greenlining President and CEO Debra Gore-Mann made the following statement:

“We congratulate senators-elect Warnock and Ossoff on the confidence Georgians have shown in them. The election of Georgia’s first-ever Black U.S. senator, the pastor of Martin Luther King’s church, is a truly historic moment, and politicians of all parties should note the decisive role played by voters of color and by Black, Latino and Asian American movement organizers.

“Without the constraints of divided government, this is the time for the Biden-Harris administration and congressional leaders to think big. America can now enact a bold, courageous agenda, an agenda that starts with a real plan to end the pandemic and provide ongoing relief to struggling families and small businesses, but also goes much farther.

“We need strong, decisive action to protect democracy, fight systemic racism, end economic inequality and harness the fight against climate change to build a prosperous, healthy and just economy. The needs have never been greater, but neither has the opportunity. President-elect Biden and congressional leaders must seize this moment, reject half-measures and achieve change on an audacious scale.”

To learn more about The Greenlining Institute, visit www.greenlining.org.

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 THE GREENLINING INSTITUTE
A Multi-Ethnic Public Policy, Research and Advocacy Institute
www.greenlining.org
@Greenlining

Was 2020 The Year That EVs Hit it Big? Almost, But Not Quite

By Nicholas Kusnetz
Inside Climate News

In the energy world, 2020 was both unsettling and exciting, a year when the coronavirus pandemic drove billions of people to change their patterns of driving, flying and public transportation use, just as an unprecedented transition away from fossil fuels was gaining speed. Oil markets cratered, but clean energy appeared to emerge unscathed, if not stronger.

For electric vehicles, the year paired a steady stream of boosterish headlines with largely stagnant growth, at least in the United States, an almost-but-not-quite year that some analysts say finally may have primed the market to take off.

“I would maybe characterize 2020 as, we were putting in place the final piece of the foundation before the really breakthrough year in 2021,” said Katherine Stainken, policy director for Plug In America, an advocacy group that calls itself the voice of electric vehicle drivers.

This year saw an acceleration in pledges by governments to ban vehicles that run on fossil fuels. In September, Gov. Gavin Newsom of California signed an executive order setting a goal to end sales of pollution-spewing light-duty vehicles by 2035. In November, the United Kingdom said it was advancing its timetable for phasing out sales of most fossil-fueled cars to 2030, from 2040. And this month, Japanese media reported that the government might ban sales of most gasoline cars by the mid-2030s.

At the same time, several major automakers ramped up their plans to shift away from the internal combustion engine. Last month, after debuting an electric Hummer, General Motors said it would spend $27 billion to offer 30 electric models globally by 2025. Also in November, Volkswagen’s chief executive, Herbert Diess, said the company was retooling factories and accelerating its move towards electric and self-driving vehicles as part of a “race with Tesla.” VW also began offering a mass-market electric SUV, the ID.4.

Smaller, all-electric automakers like Rivian and Lucid Motors raised billions of dollars and hit manufacturing milestones. And Tesla’s stock soared, catapulting its market value to $600 billion from less than $100 billion in January, and making its founder and chief executive Elon Musk one of the world’s richest people.

Last week, President-elect Joe Biden said he would nominate Jennifer Granholm, the former Michigan governor who has ties to the auto industry and has been a prominent advocate for clean energy, to be the next Energy Secretary. The position will allow her to help speed a transition to electric vehicles through the department’s loan programs and research and development budget.

Yet sales of electric vehicles—or EVs—declined over the first nine months of 2020 in the United States, part of a broader market slump tied to the pandemic, according to Atlas EV Hub. Electric cars made up only about 2 percent of new passenger vehicle sales—a figure that has remained static for several years—with Tesla accounting for two-thirds of all EV sales over the first nine months of the year.

Some experts point to Tesla’s vertiginous rise as a sign of things to come.

“This is kind of the year that Tesla really came into its own,” said Joel Levin, Plug In America’s executive director.

David Reichmuth, a senior engineer with the Clean Transportation Program at the Union of Concerned Scientists, said Tesla showed other automakers that people will buy electric vehicles, as long as they are marketed in the right way.

“I always thought about it as some of the traditional car makers trying to convince you to buy this car even though it’s an EV,” he said, “whereas Tesla was very much in the mode of, ‘You need to buy this car because it’s an EV.” Now, he said, GM, Volkswagen and other companies are playing catch-up.

And there have been signs in recent months that the EV market may be picking up. Global sales of EVs and plug-in hybrid electric cars grew by nearly 130 percent in October from a year earlier, with some of the fastest growth coming in Europe, where EVs are expected to reach nearly 10 percent of new auto sales this year, according to Raymond James, a financial services company.

“The EV boom that we’ve seen in the last five months is striking,” said Pavel Molchanov, a clean energy analyst with Raymond James. “It is phenomenally strong.”

Still, Molchanov said that growth has been slower than automakers had expected, and that the global market share remains small. The ultimate goal is to wean drivers off of oil, and by that measure, there’s a long way to go. Molchanov’s research suggests that by 2025, EVs will displace less than two percent of global oil demand.

Ed Kim, vice president of industry analysis at AutoPacific, a research firm, said we haven’t yet hit the tipping point to an electric future.

“It’s going to take more automakers jumping on it as well before we have the critical mass to say, ‘OK, this is the moment in which the industry really started shifting towards full electrification,’” he said. “I’m not sure we’re quite there yet, but with GM’s announcements this year, certainly we’ve made a huge step in that direction.”

A Case of Range Anxiety

Of the barriers to the widespread adoption of EVs, perhaps the biggest is also the most obvious: There just aren’t many for sale in the United States, and most of those that are remain expensive and limited in number, largely restricting ownership to wealthier buyers.

And although less expensive models are on the way, they’ll need somewhere to charge when they arrive. Without that, consumers may suffer from what industry analysts wearing psychoanalytic hats have dubbed “range anxiety”: The fear of being unable to take that cross-country road trip lest one find oneself stranded by the side of the road somewhere, plug in hand, without a charger in sight.

According to data compiled by the Department of Energy, there are only about 28,500 publicly available charging stations across the country, and they’re clustered in states with more electric vehicles. While that number needs to grow dramatically, experts say it’s hard to predict by exactly how much, and that the nation’s network of gas stations is a poor analogy because the vast majority of charging will be done at home.

More than 60 percent of Americans have garages or carports where they could plug in their EVs. And cross-country road trips—and even somewhat shorter, multi-state drives—represent only a tiny portion of miles driven. A national charging network would fill in the gap exposed by that small portion of long-range trips, and by the minority of people who can’t charge at home, many of whom may have lower incomes. In other words, the nation needs a network of many chargers that won’t actually get much use, said Costa Samaras, an associate professor of engineering at Carnegie Mellon University who works on energy and climate change.

“It makes it hard to be profitable,” he said. “Some companies have figured this out, but many have not.”

Most chargers are owned by a variety of businesses looking for a new revenue stream—shopping malls, garages, restaurant chains and hotels, according to data from Raymond James. Some companies, including Tesla, have built their own networks to quell range anxiety and lure buyers, but they don’t necessarily expect to make money from the chargers, Samaras said.

He added, “There’s probably going to need to be a continued investment by the government to make sure there’s enough charging stations around not just for people who can’t get home with enough charge, but for people who don’t have access to a place to charge at home. So it’s an equity issue, and it’s a range anxiety issue.”

The Zero Emission Transportation Association, a newly formed industry coalition that includes electric vehicle manufacturers, utilities, battery makers and other companies involved in the EV supply chain, plans to ask the federal government to spend $30 billion over a decade on charging infrastructure, said Joe Britton, the group’s executive director. President-elect Joe Biden’s infrastructure proposal includes a plan to help build 500,000 charging stations across the country. Britton said that’s likely to be only a start.

Levin, with Plug In America, agreed that the country needs a huge investment in chargers, but said, “I don’t think that charging is the fundamental problem right now.”

He added, “I think the biggest barrier is that a lot of people look at the vehicles they like to drive, and then they look at what’s available in EVs, and they’re like, ’Oh, the kind of car I like to drive, they don’t make it as an EV, or they may make it, but I can only get it in California, I can’t get it here.’ So the supply of vehicles at a reasonable price is a big barrier.”

Cost Still a Prohibitive Factor

A transition to electrified transport stands to provide enormous benefits to low-income communities and people of color, who are more likely to be exposed to higher levels of pollution from cars and trucks.

report by the Union of Concerned Scientists last year found that communities of color in the Northeast breathed in 66 percent more pollution from vehicles than white communities. So progress on electric vehicles often translates into progress on environmental justice, said Leslie Aguayo, environmental equity program manager at the Greenlining Institute, a nonprofit in Oakland, California, that works for racial and economic justice.

“There’s a perception that EVs are for the rich, for the white, are mostly folks driving their Teslas,” she said.

In many ways, though, that perception reflects reality. Electric vehicles remain significantly more expensive than their conventional cousins. The federal government provides a tax credit of up to $7,500 to make up the difference in cost, but the incentive is skewed towards higher earners: Not only are buyers required to pay in full up-front, but they need to owe at least $7,500 in federal income tax in order to take full advantage of the credit. It is also limited by how many vehicles a manufacturer has sold, and has already been phased out for Tesla and GM.

California has an income-based credit program, but Aguayo said the relatively high caps mean that much of the funding has gone toward middle-class people buying expensive cars. And again, because it is structured as a rebate, she said, rather than a grant, it generally excludes people who don’t have enough money to pay the full sticker price up front. Charging also remains a significant barrier for low-income communities. People who live in apartment buildings are unlikely to have a way to charge their car at home.

“Historically, these kinds of new technologies have not thought about people of color, have not thought about low-income folks in their design processes,” Aguayo said. “What we started to notice was that there were not a lot of folks of color, not a lot of folks that were low-income in these conversations.”

The Greenlining Institute has an “equity toolkit” that highlights barriers and opportunities for policymakers to ensure that people in low-income communities can have access to EVs, including how to structure incentive programs. But Aguayo added that any set of policies to build out an equitable electric vehicle network has to go beyond credits for purchasing new cars and include programs to expand electric buses, car sharing and electric scooters and bicycles. One study, by researchers at the University of California, Davis, for example, found that electrifying the fleets of companies like Uber and Lyft can have three-times the emissions-cutting benefits of replacing the average private car, because of how many miles the ride-sharing cars drive.

New Opportunities

The announcements by California and the United Kingdom that they will phase out new gasoline and diesel cars are in line with broader climate goals of reaching net-zero greenhouse gas emissions by mid-century. An estimate by the Union of Concerned Scientists found that California’s goal would likely push the state’s light-duty fleet to be more than 90 percent emissions-free by 2050. That would require EVs to make up a significant portion of new sales within just a few years.

China has not yet announced a plan to phase out conventional vehicles, but the country dominates the global EV market. China accounted for about half of all light-duty EV sales in each of the last several years, and 95 percent of electric bus sales, according to data collected by Raymond James; the city of Shenzhen alone has more electric buses than all other countries combined. Six of the top 20 best-selling EV models this year are Chinese.

Stainken, of Plug In America, is optimistic that federal lawmakers and the incoming Biden administration will recognize the opportunity presented by electric vehicles for economic recovery packages. New factories are ready to start churning out EVs, several of them in Republican-leaning states. New charging stations would be a natural fit for a major infrastructure bill. Stainken and Levin said the biggest difference between Europe, where sales took off this year, and the United States, where they didn’t, is policy, and that the biggest obstacle to better policy was the Trump administration.

Biden’s clean energy platform contains several proposals to speed adoption of electric vehicles, including “a major federal commitment to purchase clean vehicles for federal, state, tribal, postal, and local fleets,” rebates for people to trade-in older and less efficient vehicles, public infrastructure investments and a goal to make all new American-built buses emissions-free by 2030.

Samaras, of Carnegie Mellon, said there’s no time to waste.

“It is correct to be excited and it is correct to be optimistic,” he said, “but we also have to be real and think about how far we are from where we need to get to and what else still needs to get done to get us there,” including policies and incentives that not only encourage a switch to electric vehicles but also encourage people to get out of cars altogether by choosing to walk, bike or use public transportation.

He added, “My summary of this space is, we’re going to need everything.”

Dan Gearino contributed to this article.

Infill housing is critical for a healthy region and climate

By Zack Subin and Zoe Siegel
San Francisco Chronicle

Bay Area cities and the state government have taken great steps recently to reduce greenhouse gas emissions and address the climate crisis. Recent bold action to switch from fossil fuels to renewable energy include the exclusion of fossil gas from new buildings in major Bay Area cities, Gov. Gavin Newsom’s series of executive orders to phase out gasoline-powered cars, and state legislation to bring a carbon-free power grid.

In order to more completely address climate change, we need to think beyond energy infrastructure and tackle our housing crisis as well. To do this, we need to change the way we build, and in doing so change the environmental rhetoric around new housing. This change requires us to build dense infill developments as well as “missing middle housing” (like townhouses, fourplexes, and courtyard apartments) in existing communities, while discouraging sprawl development in high risk zones most vulnerable to climate change.

Simply allowing for more people to live in Bay Area cities is one of the most potent means of reducing climate pollution with local policies. According to research led by UC Berkeley’s Chris Jones (available interactively at coolclimate.org), it could be the single most impactful measure for Bay Area cities ranging from San Francisco to Oakland to Mountain View. This is because cities in the inner Bay Area already have relatively low carbon footprints, particularly within the transit-rich core.

Housing we don’t build in cities ends up in outlying suburbs where folks are forced to drive for most daily activities, burning gasoline and necessitating far more asphalt, steel and concrete. A drumbeat of reports from state and national organizations, including the California Air Resources Board, have said that the continued upward trend in miles driven is a threat to our emissions goals, even considering a continued shift to electric cars. Moreover, continued development on the suburban fringe threatens the very natural and working lands we need intact to reach carbon neutrality.

Infill housing (built within areas that are already largely developed) is one of the best ways we can drive down emissions, while also allowing us to limit further sprawl and displacement. Yet time and time again, when new infill housing is proposed, there are almost always people opposing the project for “environmental reasons,” usually citing issues around traffic and green space.

What they should instead come to realize is that infill housing supports the environment and represents a critical solution to both the climate and housing crises. Building more housing in existing communities will allow more people to live in walkable neighborhoods, reducing traffic and opening the possibility of returning urban space from cars to people and trees. Eliminating mandatory parking requirements and instead charging fair prices for use of public street space are key steps to ensure this outcome.

Low income and communities of color are already disproportionately affected by the impacts of climate change, and the compounding effects of gentrification make it even more challenging to live in the Bay Area. Rising rents are displacing lifelong residents, forcing them to move to the outer edges of the region. When we add new housing, we need to prioritize the considerations of communities that have borne the brunt of disinvestment and displacement.

Unfortunately, though infill housing is one of the main climate interventions that is squarely within the power of local governments, there are still racist and exclusionary policies which continue to get in the way of creating the healthy, resilient communities we need. In many communities around the Bay Area, affluent homeowners are resisting needed land use change. Just this past election, the city of Alameda had the chance to repeal a racist housing law that prohibits multi-family homes by passing Measure Z. Instead, they voted no.

Housing activists and environmentalists need to work together as climate champions for our region in order to promote development, reduce sprawl, and protect our critical natural and working lands. Throughout the Bay Area, we see nonprofit organizations stepping up to make the case for infill housing as a climate solution, beginning with removing barriers to building homes in high-opportunity neighborhoods. Organizations like SPURGreenbelt Alliance and the Greenlining Institute are building platforms for housing advocacy that support our environmental goals and redress our inequitable residential patterns. Additionally, a group of us co-founded Urban Environmentalists in 2019 to bring together voices for housing and for climate action. Join us with your ideas and your volunteer hours to help build an inclusive, climate-resilient Bay Area.

Zack Subin is a volunteer co-lead of Urban Environmentalists, living in San Francisco; Zoe Siegel is director of Climate Resilience at Greenbelt Alliance, living in Oakland.

Greenlining Institute Launches Diversity Guide for Cleantech Start-Ups

Contact:
Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758 (cell)
Sona Mohnot, Greenlining Institute Senior Policy Analyst and Program Manager, 504-377-7594

OAKLAND, CALIFORNIA – With climate change and environmental justice rising higher on the national agenda and startup companies bringing new ideas into the cleantech arena at an accelerating pace, The Greenlining Institute has released a guidebook designed to help these emerging companies address issues of diversity, equity and inclusion.

“Communities of color have disproportionately borne the burdens of pollution and climate change, and we need to ensure that they reap the full benefits of the growing clean energy economy,” said report co-author Parwana Ayub, Greenlining Institute Environmental Equity Fellow. “Cleantech startups will play a critical role in this economy, and we want to help them be as welcoming as possible to a diverse workforce and diverse customers.”

The guide, Building a Diverse, Equitable and Inclusive Cleantech Industry, was inspired by Greenlining’s ongoing work with companies participating in the California Sustainable Energy Entrepreneur Development Initiative, or CalSEED. It includes sections covering:

  • Definitions of diversity, equity and inclusion
  • The moral and business cases for diversity, equity and inclusion
  • Increasing workforce and leadership diversity
  • Creating an inclusive workplace culture
  • Promoting accessible cleantech products and services

“Early stage companies may have a small staff, limited resources and no formal HR department, but that doesn’t mean they can’t make progress on diversity, equity and inclusion,” said report co-author Sona Mohnot, senior policy analyst and program manager for Greenlining’s Environmental Equity team. “We hope this guide will give them the tools they need to get started.”

To learn more about The Greenlining Institute, visit www.greenlining.org.

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 THE GREENLINING INSTITUTE
A Multi-Ethnic Public Policy, Research and Advocacy Institute
www.greenlining.org
@Greenlining

Banks could face deadline for board diversity requirements

By Anna Hrushka
Banking Dive

The lack of diversity among leadership in the banking industry has long been used as a rallying cry for lawmakers and consumer interest groups who say the makeup of the sector’s decision makers doesn’t accurately reflect the demographic the industry serves.

But a new California law, and a recent Nasdaq proposal, could give banks a deadline to diversify their boards.

“Banks are going to need to plan ahead and start expanding their networks and looking for diverse directors now,” said Vicki Westerhaus, a partner in the law firm Bryan Cave Leighton Paisner.

Nasdaq this month asked the Securities and Exchange Commission (SEC) for permission to adopt new listing rules related to board diversity and disclosure. The proposed rules would require companies to have at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority or lesbian, gay, bisexual or transgender.

The Nasdaq proposal would provide each company one calendar year from the approval date to provide statistical information regarding its board-level diversity. Companies will be expected to have at least one diverse director within two years of the SEC’s approval and two diverse directors within four years. Under the proposal, companies that don’t meet the criteria within the designated time frames will be required to explain why.

The proposal, which first needs to be approved by the SEC, follows the passage of a California law signed by Gov. Gavin Newsom in September, requiring public corporations headquartered in the state to achieve diversity on their boards of directors by 2023.

recent analysis by The Greenlining Institute found efforts by the state’s banks to improve diversity over the years have stalled.

The nonprofit research group, which examined the racial and gender makeup of the boards of the top 15 banks in California, as measured by deposit size, found on average that 22% of board members in 2020 were people of color, a decline from 30% in 2019.

The analysis also found only two of the 15 banks had more than one-third people of color on their boards, and on average, women comprised 29% of board members, unchanged from 2019.

“In a state that’s 64% people of color, and projected to be 70% by 2040, the leadership of our most important financial institutions should reflect that diversity — and right now it doesn’t,” De’Zhon Grace, the report’s co-author, said in a statement. “This isn’t an academic question. Our recent analysis of mortgage data found Black, Latino and Native American borrowers still lagging behind. More diverse bank leadership could push these institutions to work more cooperatively with California’s diverse population communities.”

But the recent initiatives have been met with some pushback.

The Wall Street Journal’s editorial board accused the world’s second-largest exchange of “virtue signaling.”

“Imposing its own identity politics on some 3,300 listed companies meddles in corporate management and will harm economic growth and job creation,” the paper’s editorial board wrote.

Conservative watchdog group Judicial Watch, which filed a lawsuit in September aimed at blocking the California law, also opposes the Nasdaq proposal.

Judicial Watch President Tom Fitton told CNN the proposal “may violate the law for Nasdaq to seemingly require a discriminatory quota system for race and gender.”

Despite the pushback, Westerhaus said there is a good chance the SEC will approve the Nasdaq’s proposal for diversity requirements, and banks should start planning accordingly.

“The proposal is, either add the directors or explain why not,” Westerhaus said. “I think, ultimately, the SEC will probably agree because it’s not an absolute mandate.”

The New York Times, citing data from the Nasdaq, claims more than 75% of the exchange’s roughly 3,200 companies do not meet the criteria.

That percentage is reflective of the roughly 300 banks that trade on the exchange, Westerhaus said.

While the majority of the Nasdaq’s companies would meet one of the requirements — to have at least one woman director — it’s with respect to the second requirement for an underrepresented minority where most companies are failing, Westerhaus said.

A component of the proposal means banks will have to be prepared to ask candidates if they are willing to self-identify their diverse characteristics as part of the recruitment process.

“A diverse director could take the position that they don’t want to disclose or self-identify their diverse characteristics,” Westerhaus said, in which case the Nasdaq recommends a company explain the situation but continue to search for additional diverse directors who are willing to identify.

“As they recruit, banks are going to have to ask the question in the recruiting process, ‘Are you willing to self-identify so we can publicly disclose our diversity statistics as we’re going to possibly be required to do?'” Westerhaus said.

The Nasdaq proposal and California legislation come as lawmakers have been pushing for more transparency from banks when it comes to sharing their diversity data.

House Financial Services Committee report published in February suggested lawmakers pass legislation to force banks to share diversity data with their regulators and make it public.

The report found 29% of senior- and executive-level positions at U.S. banks with more than $50 billion in assets are held by women. Racial and ethnic minorities comprise 19% of senior- and executive-level employees at those banks, the report found.

Several banks are taking progressive steps to promote diversity among their ranks.

In response to shareholder pressure, Citi began disclosing unadjusted gender pay gap data last year, finding that the bank’s female employees made 29% less on average than its men. Citi also found nonwhite employees were paid 7% less on average than its white workers.

The bank has also pledged to improve those numbers, setting a goal to increase representation to 40% women and 8% Black at certain management positions — assistant vice president through managing director — by next year.

In January, investment bank Goldman Sachs said it would refuse to take public any company whose board was composed of all straight, white men.

More recently, the bank said its asset-management arm will pressure U.S. companies to appoint more women and members of underrepresented groups to their boards, Catherine Winner, Goldman’s head of stewardship efforts, told Reuters on Thursday.

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Boards of Top CA Banks Still Skew Heavily White, Male, Greenlining Institute Study Finds

Progress toward Increasing Diversity Stalls 

Contact: Bruce Mirken, Greenlining Institute Media Relations Director, 415-846-7758 (cell)

OAKLAND, CALIFORNIA – The boards of directors of California’s leading banks still lack diversity, with women and people of color seriously underrepresented, a new analysis released today by The Greenlining Institute finds. Banks had been making slow progress in improving diversity over the years, but now that progress appears to have stalled.

“In a state that’s 64% people of color, and projected to be 70% by 2040, the leadership of our most important financial institutions should reflect that diversity – and right now it doesn’t,” said report co-author De’Zhon Grace. “This isn’t an academic question. Our recent analysis of mortgage data found Black, Latino and Native American borrowers still lagging behind. More diverse bank leadership could push these institutions to work more cooperatively with California’s diverse population communities.”

Greenlining examined the racial and gender makeup of the boards of the top 15 banks in California, as measured by deposit size. Key findings include:

  • On average, 22% of board members in 2020 were people of color, a decline from 30% in 2019.
  • Only two of 15 banks had more than one third people of color on their boards.
  • On average women comprised 29% of board members, unchanged from 2019.
  • Women of color were severely underrepresented, averaging just nine percent of board members. One fifth of banks studied had no women of color on their boards.

The business world is increasingly recognizing the need for diverse boards. This week NASDAQ announced a new board diversity requirement for listed stocks.

Greenlining’s report urges greater transparency and increased attention to diversity from financial regulators. “Banks, nonbank lenders and fintech companies should be required to disclose data on their boards and staff, broken down by race and ethnicity, as well as what they have done to increase diversity,” said Rawan Elhalaby, the report’s other co-author. “This problem won’t solve itself. It requires focused effort and a push from regulators.”

To learn more about The Greenlining Institute, visit www.greenlining.org.

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THE GREENLINING INSTITUTE
A Multi-Ethnic Public Policy, Research and Advocacy Institute
www.greenlining.org
@Greenlining

Are nonbanks likelier to lend to Black, Latino homebuyers?

By Kate Berry
AmericanBanker

As policymakers and consumer advocates seeks ways to narrow the racial gap in homeownership, a new report suggests nonbanks are doing a better job of lending to minorities than banks in the largest state.

The findings by the Greenlining Institute, a nonprofit based in Oakland, Calif., show the eight largest nonbank mortgage lenders in California lent more of their respective portfolios to Black and Hispanic homebuyers than top bank lenders in the state.
Independent mortgage bankers say the main reason for the difference in lending to minorities is that nonbanks are focused solely on mortgage lending rather than selling a wide array of products to the same customers.
Read more here.