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How Microsoft is integrating environmental justice into business development

The tech giant's close collaboration with the Just Transition PowerForce has informed renewable energy projects with equity as a central concern.

Two people facing away from camera standing next to solar panels.

A deal with Sol Systems to build 500 MW of solar projects is one component of the partnership between Microsoft and Emerald Cities Collective, as is a $50 million commitment for community-led grants and investments. Courtesy of Sol Systems

When Microsoft first approached the Emerald Cities Collaborative in late 2019, with the idea of working together on renewable energy projects that address climate justice issues, there was skepticism on both sides.

Emerald Cities Collaborative administers the Just Transition PowerForce, which includes more than a dozen organizations leading the movement for a just transition in frontline communities across the United States. The group was wary of big corporations with flashy promises.

"Mission alignment may be around climate, but our organizations … are intersectional, so while you may be doing the right thing in climate, your labor standards or your other business practices may actually not be aligned," said Denise Fairchild, president emeritus of the Emerald Cities Collaborative. "So we’re concerned about mission alignment, profit over mission. We’re concerned about tokenism, a lot of corporations step into the plate just to get the photo opportunity."

Fairchild had seen this play out before with other companies: "At the bottom line, there’s no real engagement of the community, there’s no decision-making and power-sharing opportunities. And there’s no significant impact in the communities that we are saying that we care about."

We’re concerned about mission alignment, profit over mission. We’re concerned about tokenism, a lot of corporations step into the plate just to get the photo opportunity.

On the other side of the relationship, Microsoft’s director of environmental justice, Danielle Decatur, had to show corporate leaders within the software giant the value of partnering with community groups to achieve sustainability goals.

"It's my job to create that architecture within our company to help folks connect to that mission and understand how their jobs can be a part of that," Decatur said.

Ultimately, Fairchild and Decatur say they’ve struck a unique agreement that avoids the pitfalls these types of partnerships often fall into. They shared their insights at the VERGE Net Zero conference this week, where they spoke on a keynote moderated by GreenBiz Chairman and co-founder Joel Makower.

The first step in solidifying the partnership involved the Just Transition PowerForce setting the rules of engagement. Crucially, the memorandum of understanding (MoU) that the groups developed gave both sides shared decision-making power and equal say in the governance structure.

As an example, Microsoft and the Just Transition PowerForce shared the responsibility of creating an evaluation matrix for grant funding. That may seem like just a matter of paperwork, but Fairchild says it largely determines what kind of projects get done, and the type of impact they make in the communities.

From there, Fairchild’s organization stepped up to facilitate a number of "learning opportunities" with Microsoft, essentially a series of workshops about what climate justice means, what frontline communities are facing and how Microsoft could help. It was something Fairchild said the collaborative is used to doing: The nonprofit network includes a wide range of members — from climate justice groups to labor unions and businesses — and knows how to help them find common ground.

"That was easy for us, to walk into the Microsoft space and try and build a similar kind of table, and have this kind of important conversation," Fairchild said.

One goal of these learning sessions was simply to build trust and understanding. But the workshops also helped define how renewable energy procurement — what Microsoft saw as its financial biggest lever for environmental justice — could be used to benefit frontline communities.

"Corporate buyers of renewable energy, like Microsoft, are really helping to drive the clean energy transition, and so it’s an imperative, important opportunity for us to also help to drive a just transition," Decatur said.

The initial result of the partnership was a renewable energy purchase agreement announced in July 2020 with Sol Systems, a national solar energy firm. As part of the deal, Sol Systems plans to build 500 megawatts of solar projects to power Microsoft data centers. But the agreement also invests $50 million in "community-led grants and investments that support educational programs, job and career training, habitat restoration and programs that support access to clean energy and energy efficiency," according to a press release.

While this sort of deal has obvious benefits for Microsoft's sustainability goals — notably, to become a carbon-negative company by 2030 — Decatur said it’s also part of a broader business strategy.

To the extent that Microsoft can create co-benefits for these communities, and have that support for operations there, I think it’s important for longevity of the business.

Decatur sees climate justice work as a means of building trust with the communities that Microsoft operates in, something that’s good for the bottom line, too.

"To the extent that Microsoft can create co-benefits for these communities, and have that support for operations there, I think it’s important for longevity of the business," Decatur said.

Especially for renewable energy installations such as solar farms, which can inspire fierce local opposition, Decatur said Microsoft will continue to take this type of community-led approach. (You can read more of its best practices here.)

"We need to make sure that those installations have communities in mind and really have communities co-leading," she said.

And if there’s one thing Decatur wants other companies to know about really committing to environmental justice, it’s this: "In doing this work, we need to move at the speed of trust."

Editor's note: This story was updated Dec. 13 to correct references to Just Transition PowerForce and Emerald Cities Collaborative.

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