Advancing Energy Equity: Three Tips to Create More Diverse and Inclusive Climate Tech Companies
Diverse teams are proven to be more innovative, successful, and inclusive of broader customer bases, and yet within the clean energy workforce only 8% of workers are Black, 16.5% are Latinx and only 27% are women. Meanwhile, the adoption of established clean energy technologies such as solar has not been equitable across racial groups in part due to the legacy of racist policies such as redlining that contributed to higher pollution burden and fewer economic opportunities such as homeownership. A recent study showed that Black homes were 69% less likely and Latino homes were 30% less likely to have solar installed than White homes of similar median income in 2019. Creating a more inclusive clean energy economy that is representative of communities of color and low income communities can help increase accessibility of the technologies. There is immense opportunity within the clean energy industry to address the disproportionate impacts of climate change on communities of color and low-income communities, all the while creating high quality jobs within these communities. To close this gap and ensure that communities of color don’t continue to bear the worst burdens of air pollution and climate related disasters, we have summarized key takeaways and tips for cleantech companies to take when creating the workforces of the future.
Programs like The California Sustainable Energy Entrepreneur Development Initiative (CalSEED) provide support and funding with the goal of bridging these gaps in opportunity. Funded by the California Energy Commission and administered by New Energy Nexus, CalSEED is an early-stage grant funding and professional development program. Rooted in a vision of an equitable clean energy economy that drives affordability and resilience, CalSEED supports innovators from diverse socio-economic backgrounds in California who are developing technologies that advance equitable access to clean energy solutions. CalSEED realized that there are high barriers to entry in the industry. Climate tech companies often face a “valley of death” because it takes a significant amount of investment to develop technologies before companies become profitable and can sustain themselves. Therefore, they need additional funding support to develop technologies and build successful companies. Early stage funding and support through programs like CalSEED is crucial, especially for first time entrepreneurs and those from underrepresented backgrounds who may not have existing relationships within the clean tech space and those who invest in it.
The Greenlining Institute provides training to CalSEED awardees on how to advance social impact and energy equity. Since the companies are at a very early stage, it is a perfect opportunity for us to meet one-on-one with CalSEED entrepreneurs to provide coaching on their internal and external diversity, equity, and inclusion goals and questions about how to reach them.
Based on our work with CalSEED entrepreneurs and equity groups, we have discovered that there are three essential tips that can be applied more broadly throughout the clean energy industry to bridge opportunity gaps and support equitable climate tech development.
Companies should:
Tip 1. Develop a robust internal DEI strategy with specific actions to take, and set goals to track progress
- Why it matters: Research has shown that more racially and gender diverse teams perform better and can better reach a wider range of customers in an increasingly diverse country.
- Define what equity outcomes matter most to your organization in your vision, mission, and goals. This will help you start making tangible steps towards embedding equity into each part of your company’s operations. It’s important to be as specific as possible and take input from the communities you will be impacting through your company. This Greenlining report has some examples of specific outcomes and questions to ask as programs and companies develop their social impact statements. Understanding how your product will help address external inequities in the energy sector can help guide your internal policies and your hiring strategy.
- Start developing an internal diversity, equity, and inclusion plan. The early stages of a company are a huge opportunity to build the diverse and inclusive culture you want to see from the beginning. While it takes an initial investment of time and resources, it can help guide the growth of the company. This Greenlining report has strategies that companies can use to develop their internal and external equity plans. Grid Alternatives is an example of a clean energy organization that has publicly published progress reports on their internal diversity and inclusion goals.
- Create SMARTIE goals to keep you on track to achieving your goals. Massive and flashy commitments can be overwhelming and can set employees up for failure. It’s more effective to start with clearly defined and tangible goals you can measure progress towards. The Management Center has a helpful worksheet on how to create goals that are strategic, measurable, ambitious, realistic, time-bound, inclusive, and equitable (SMARTIE). Committing and implementing these SMARTIE goals and sharing outcomes can help build accountability. Remember that not everything needs to happen all at once; focusing on a few priorities at a time can help build trust and set your team up for success.
Tip 2. Develop trusting and lasting relationships with community-based, workforce development, and environmental justice organizations
- Why it matters: Making sure you have trusted relationships with groups that work closely with workers and impacted community members can help you build the pipeline of talented workers with deep knowledge of the communities and markets you wish to serve. Getting community input early-on can make your product more impactful and relevant to the needs and assets of the people in the regions you will be working in and maximize environmental and economic benefits and help you proactively mitigate harms.
- Build relationships early with community-based organizations and workforce development groups. Relationship building takes time, especially when working with stakeholders such as community-based organizations, workforce development, labor, and environmental organizations. Often, when companies wait until right before a grant deadline, there is not enough time to build meaningful relationships and build trust. Strong relationships are built on a foundation of reciprocity and consideration of how your solution is connected to the needs and assets of local communities (both where your solution will be manufactured as well as implemented). Collaborate closely and transparently with each of the organizations you work with, and seek their input on your product, business model, or manufacturing processes early on as you are developing your product so you will have time to incorporate this feedback to make changes. Consider having community based organizations and/or members on your advisory board or a community engagement committee and seek their input on how to best pilot and scale the technology. Charger Help is an example of a company that has built trusting relationships with workforce and community partners and has created a training program that creates career paths in electric vehicle repairs for local communities.
- Source diverse talent at multiple levels of the company. In recruiting for senior positions, make your applications as clear and inclusive as possible. Create a clear prioritization of what skills are needed, which are transferable, and which can be learned on the job. This is important because research has shown that women are less likely to apply for jobs they don’t meet 100% of the criteria for than men. Tap existing professional networks of professionals from underrepresented groups (such as women, LGBTQ+, veterans, youth, people of color etc.) with transferable skills in energy, business, sales, engineering, and other key skill sets. Build relationships with these professional groups by attending events, providing support for their initiatives, and posting on their listservs and job boards. This document from a CalSEED training has a list of over 50 reports, listservs, and other resources that can be a good starting point for finding organizations to connect with as part of your outreach and hiring strategy. When hiring interns and early career professionals, consider working with programs like EDICT that help select a diverse pool of candidates as well as with local community colleges and universities.
- Be intentional about what types of partnerships make sense for your business model. While community partnerships might be different for the types of business types, there are strategies you can use to ensure community benefits and workforce benefits. Community Benefits Agreements (CBAs) are formally drafted documents often used to facilitate partnerships and address community needs. A business that creates hardware and sells directly to end customers may have agreements more focused on hiring locally, conducting inclusive sales and outreach, and working with community based groups to ensure equitable distribution of their product. On the other hand, one that manufactures products for another business may choose to prioritize partnerships with local, women, and minority-owned suppliers throughout their supply chain. Regardless of your business model, however, there is always an opportunity to be intentional about promoting meaningful engagement with communities of color, women, and others who have been underrepresented in the clean energy industry.
Tip 3. Align with funders, companies, and accelerators that support and can help advance your DEI values and vision:
- Why it matters: Finding funders that prioritize energy equity and DEI can provide you the support and resources you need to meet your goals and maximize your social impact. Working with supportive funders and accelerators can also help set you up for success to unlock future opportunities and funding.
- Apply for government grants that prioritize energy equity and community benefits. Increasingly, social impact is being considered for government and some private grants. Be proactive about finding these sources and use these pitches and grants as opportunities to articulate and share your vision, internal and external equity plans, and the specific actions you are taking. The Department of Energy offers grants for small businesses and other funding opportunities with guidance on how to create a Community Benefits Plan in the application process. Many other state and federal grants prioritize funding to businesses that demonstrate a measurable commitment to reinvesting in their communities. For example, the California Climate Investments initiative aims to fund programs and businesses that maximize benefits to disadvantaged communities.
- Research and apply to funding from private funders who explicitly state their focus on social impact and equity in their investment criteria. There are many impact investing funds, venture capital firms, and angel investors who prioritize companies that generate positive social and environmental outcomes. DiverseCity Ventures and Radicle Impact are two venture capital firms that fall in this category. Philanthropic organizations are also a great place to seek funding – the Kresge Foundation and Schmidt Family Foundation actively update their social investment portfolios and seek projects that align with their values.
- Find other companies who share similar values and goals to exchange ideas
- Accelerators like CalSEED, Elemental Excelerator, Los Angeles Cleantech Incubator, and similar programs can be a great way to identify companies with similar goals of prioritizing equity. Utilizing these programs can facilitate connections with industry partners, potential customers, suppliers, and other stakeholders. Building a strong network of companies with shared values can greatly benefit cleantech startups through partnerships and technical support.
While advancing equity in the clean energy sector can seem like a daunting task, setting clear and achievable goals along the way can go a long way. Three ways climate technology startups can take action today are to:
- Read and share resources in this blog with others in your team or network
- Create and implement one SMARTIE goal for an internal and/or external equity outcome in your company in the next 6 months
- Learn more about CalSEED and other programs designed to support entrepreneurs in this journey
Intentionally following these tips in your early-stage company will magnify the social impact of your technological innovation, advance energy equity in communities of color and low income communities, and contribute to the diverse and inclusive energy workforce the industry needs to build.
