• Investors who deal in debt and equity and seek to benefit from the risk and opportunity that climate change creates.
• Urban planners and nonprofits dealing in social equity and cohesion and eager to prevent harm based on risk and opportunity created by climate change.

Will these two paths converge in the wood, as Robert Frost put it? Or, is it never the twain shall meet as Kipling expressed it?

According to the United Nations-supported Principles for Responsible Investment, $70 trillion (U.S.) of assets under management integrate environmental, social and governance (ESG) factors into core operations. But, peeling back that good news, would we see more social equity ensuing? By and large, the positive and negative implications on communities of climate change aren’t being addressed.

I frequently note that climate change exacerbates the tale of two very different futures – rich getting richer from extraordinary resources for resilience and poor getting poorer due to precarious resilience in everyday circumstances. What would it take for those two futures to cause investors to integrate social equity into their climate strategies, creating what I call Finance “Adaptation Equity?”

First, though, they would have to grasp – and care about – social equity issues. Those investors already trying to achieve sustainability goals are likely to see social equity as material to financial equity because it:

1. Accomplishes two ESG pillars – Environment and Social – that link the mitigation of physical risks of climate change with the enhancement of communities. Think of aligning with international standards related to human rights or the 17 U.N. Sustainable Development Goals.
2. Unveils new investment opportunities in physical assets that can enhance community equity such as infrastructure and real estate.
3. Responds to an admittedly small group of impact investors who focus on beneficiaries and aim for responsible investment to be defined by social equity.
4. Portends new pathways for longer-term investors (e.g., pensions) and development funders (e.g., blended finance teams) to apply their assets to climate and inequity affected sectors and regions.
5. Enhances understanding of systemic risks within the financial ecosystem by connecting climate change and inequity, especially given that without concerted effort, climate change will make inequity worse – and inequity has been proven to impact markets.

Still, for finance equity to flow to social equity requires work. Here are three strategies for each.

Investment equity

1. Include social equity principles in investment policy statements and goals as well as in requirements for consultants and advisors. Ask, “Will this asset improve the lives and livelihoods of lower resourced communities?”
2. Make social equity a part of risk mitigation assessments for climate-exposed assets, broadening the scope of the Task Force on Climate-Related Financial Disclosure guidelines to ensure that social elements are privileged.
3. Insist social equity be part of green bond project frameworks, asking if the infrastructure asset will have an equal or greater number of lower-resourced beneficiaries.

Social equity

1. Include means to raise fees and taxes related within social equity projects to make them more attractive to financiers. Ask, “How can we make this project a revenue generator?”
2. Make calculations that show the market benefits of social equity in your geographies and communicate them to public and private stakeholders.
3. Insist that social equity be part of financial assessments for infrastructure and other projects by being present at negotiations and integrated design discussions.

As efforts create successes, failures and draws, both groups should communicate action on social and investment equity with their clients and beneficiaries to help build this field of practice.

This piece originally appeared in Triple Pundit.

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During a recent conference in Detroit–the annual convening of NEWHAB/Energy Efficiency for All, a growing network of urban and environmental activists dedicated to creating energy-efficient affordable housing–I went on a tour that revealed new dimensions of this area’s ongoing struggle with racism and poverty. The highlight was our group’s visit to Avalon Village, in Highland Park, a city within Detroit, just a few miles from where Brewster-Douglass once stood. At first glance, you might say that it’s nothing much: a street with empty lots and rundown houses. But the “village” is a vision that started with one person and has become a collective grassroots effort; it’s an entrepreneurial start-up, not a government project. the person is Mama Shu (Shamayim Harris), a former school administrator in one of the nation’s poorest cities who, as she tells it. had a vision of what could become of a street she glimpsed on the way to work.

She bought the house on the corner for $3,000 and started to fix it up. She partnered with a nonprofit in the city, Soulardarity, that erected a solar street light next door; the area’s streetlights had been removed because the city didn’t pay its utility bills. With donations–cash, in-kind help–she began to buy lots at $300-500 apiece and a few of the houses. She turned the lot next door into a park for her infant son, killed by a car. She is turning the house next to that into a “homework house” for the neighborhood children–a safe place to meet, work, eat, and do school work. A Kickstarter campaign raised $243,000 in 30 days. She brought in a metal shipping container and turned it into a neat, well-decorated small shop–filled with incense, candles, and other goods for sale by women in the area. She and her allies have been at this for years.

When Mama Shu takes us on a walking tour of the neighborhood, more of the vision unfolds. Here will be a wellness center. There will be a park. This house will be torn down, that one will be fixed up. She points out a basket of flowers on a stand along the street. It covers the base of a removed streetlight–a small touch to bring beauty and caring where ugly loss occurred.

Yes, it’s a feel-good story. She’s been in People and on Ellen. On some days I might discount it as being at such a small scale and taking so long to get results–a drop in the bucket, hardly a “system change” effort. But two things captured me, beyond Mama Shu’s infectious can-do attitude and the tasty lunch she served us in her son’s park.

First, large changes almost always start with small changes, and small changes start with self-drive, the will to make a change. Self-drive in a person or a community can be suppressed and extinguished. But here it was, alive and well.

Second, Mama Shu’s vision for Avalon Village is quite different from the vision that built Brewster-Douglass. She wants a place that runs on renewable energy and is highly efficient in its use of energy and water, a place that is green, not just built up, and taps nature’s healthfulness, a place that is resilient, much like she has been. This vision–at the heart of what NEWHAB is about–is taking hold in cities around the world, especially the affluent cities and gentrified neighborhoods. Avalon Village says, in its small way, that this is a vision for everyone.

Mama Shu photo: Eclection Media

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Last year, Americans endured an unrelenting series of climate calamities: hurricanes in Texas, Florida and the Caribbean; wildfires and mudslides in California; drought in the Dakotas; flooding in the Midwest. Those disasters caused more than 360 deaths and more than $300 billion in losses.

And there is more where that came from. As the planet warms, climate-related disasters are becoming the new normal. Over the past five years, Americans experienced at least 10 major disasters a year-double the average number of such events since 1980.

News accounts sometimes portray disasters as great levelers, affecting rich and poor alike. But the reality is that it is the least fortunate who bear the greatest social, economic, health and environmental costs. Three months after Hurricane Maria struck Puerto Rico in September, for example, roughly half of the island’s population remained without power. The flooding in Houston caused by Hurricane Harvey had a disproportionate impact on low-income communities and communities of color. And in fire-torn California communities, many poor and elderly residents were displaced and made homeless.

Why do the poor and marginalized take the brunt of climate impacts? There is, of course, discrimination against and indifference to the fate of communities that lack political power, as in Puerto Rico. And, as in Houston, low-income people and people of color are more likely to live in or near a floodplain, in industrial areas that spread pollution when they flood, and in neighborhoods with substandard infrastructure. In California and elsewhere, the poor are more likely to live in rental housing, may not be able to afford insurance, and often hold jobs that don’t tolerate unexpected absences from work. In short, the poor are less able to insulate themselves from harm.

This is true of not only of individuals but of communities at all scales. A study published last year in the journal Science documented that the poorest one-third of U.S. counties sustain greater economic hardship than their wealthier counterparts from hurricanes, rising seas and higher temperatures. By disproportionately affecting the poorest people and communities, climate disasters deepen poverty and widen inequality. How can we prevent that from happening? As we plan for a changing climate, equity must be a top priority. That is the goal of the “climate justice” movement, a diverse coalition of national, regional and grassroots organizations.

Climate justice holds that poor and marginalized people, who bear the least responsibility for contributing to the causes of climate change, should not bear the greatest burden from its impacts. Ensuring that climate risks do not disproportionately harm those who are already vulnerable demands a deep analysis of what puts some communities at risk, including racial and socioeconomic disparities. A useful resource for that analysis is the federal government’s Social Vulnerability Index, which looks at factors such as poverty and mobility to assess vulnerability at the census-tract level.

It is also essential to make sure that marginalized people have a voice and a seat at the table. A community group in New York City called WE ACT for Environmental Justice, for example, has initiated a climate resilience planning process led by neighborhood residents. In a series of public meetings over six months, the residents drew on their own knowledge and vision to produce the Northern Manhattan Climate Action Plan, which calls for community-controlled renewable energy, emergency preparedness, social hubs and participatory governance.

Other communities are effectively integrating equity into climate adaptation. In Baltimore, for example, the city’s Office of Sustainability has cultivated the art of engaging at-risk communities in disaster planning. City staff make it easy for residents to attend meetings by providing free transportation, food and child care. And at those meetings, staff do more listening than talking. Kristin Baja, Baltimore’s former climate and resilience planner, calls this approach “sharing power.” One outcome of this initiative is a network of “resilience hubs” throughout the city that provide shelter, backup electricity and access to fresh water and food during emergencies.

As we brace for more frequent and devastating storms, wildfires and heat waves, it is also crucial to address the roots of the climate crisis. That means an all-hands-on-deck effort to slow the advance of climate change. If greenhouse gas emissions remain on their current trajectory, the earth could warm by up to 9 degrees Fahrenheit the end of this century, with sea-level rise of up to 8 feet. In that scenario, vulnerability will not be confined to those at society’s margins; it will engulf all of us. Today, we have the power to bend the curve of that trajectory and move toward a sustainable, equitable future for all.

For more on the subject of environmental justice and climate change, see “Rising to the Challenge, Together,” a recent report prepared for the Kresge Foundation.

Article originally appeared in Governing

Image: wikipedia Migrant Mother (Florence Owens Thompson), taken by Dorthea Lange in 1936

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1 SCIENTIFIC FOUNDATION – Capacity to assess and understand climate risks and vulnerabilities of city’s built, natural, and economic assets and its populations, and use these analyses for ongoing adaptation planning.

2 COMMUNICATIONS – Capacity to communicate with and educate civic leaders and community members in ways that build and sustain a sense of urgency to adapt for climate changes.

3 EQUITABLE ADAPTATION – Capacity to make social and economic equity a central driver of the city’s adaptation approach.

4 INCLUSIVE COMMUNITY ENGAGEMENT – Capacity to fully engage stakeholders and the public, especially vulnerable and underrepresented populations, in developing, implementing, and monitoring adaptation plans

5 INTERGOVERNMENTAL ALIGNMENT – Capacity to coordinate planning and action across governments at local, regional, state, tribal, and federal levels.

6 TECHNICAL DESIGN – Capacity to design, test, and implement adaptation actions that require engineering, legal, and other highly specialized details, as well as performance metrics for monitoring

7 FINANCIAL RESOURCES – Capacity to repurpose, leverage, and obtain public and private funds to invest in infrastructure development and other adaptation actions.

This work was supported by the Summit Foundation and the willingness of 35 city practitioners, climate-adaptation experts,city-supporting and conservation NGOs, and funders of urban adaptation work to share their knowledge with us. See report

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The key to sustainability and social impact, in the most practical sense, is housing. It all starts with “oikos” or “ecos,” the Greek word for house and the root of both ecology and economy, two legs of sustainability’s three-legged stool.

In 2003, when we launched a research project at New Ecology/MIT that culminated in the first comprehensive study of the costs and benefits of green affordable housing, we thought simply greening more buildings was a high-impact strategy.

We missed the point.

Especially now that green building is increasingly mainstream (though honest-to-goodness net-zero energy buildings remain a stretch goal), the real challenge when it comes to creating sustainable communities, and delivering social impact, I think, is building enough housing, of all types but especially for low- to middle-income earners, to achieve the right jobs/housing and supply/demand balance in any given place, which in turn allows for a socially and economically diverse community, to say nothing of a connected, transit-oriented one, without which there is, by definition, no true sustainability, no real smart, responsible, equitable growth.

Whether it’s Portland or Palo Alto, Denver or Detroit, Boston or Austin, affordable housing and housing supply are among today’s most wicked problems. And there will be 100 million more of us living in the US within the next 40 years. Where will we, where will they live?

In places like Boulder, where I live, rents are increasing at four and five times wage growth or more. Meanwhile, the state has a shortfall of 50,000 housing units. And Colorado is no different from any other fast-growing area. Unless and until we get closer to a reasonable balance between jobs and housing, supply and demand, the rest is commentary.

In 2009, I told an audience at the annual Boulder Economic Summit that “Density is the new open space” because I believed then, as I do now, that just as communities like Boulder, the Bay Area, Portland and so many other sought-after places were bold innovators in conserving land for agriculture and recreation 40 years ago, today we need a different kind of audacious innovation, one focused on creating livable, affordable, inclusive communities. In 2016, after I paid my last $5000/month rent check for 800 square feet in the Presidio, I changed my tune just a bit: Affordability, density’s flip-side, is the new sustainability.

More Shutkin: Prologue and All Things Are Connected

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After 9 hours on an inter-coastal ferry and 6 hours on a river ferry I found myself in Ketapang on the remote south side of the island, staring at a solar powered LED streetlight.  My inner Leslie Knope (the most hilarious public servant to grace American sitcoms) smiled at the progress of this municipality and snapped a picture (see photo).  That night, after watching the evening rush of commercial goods being delivered to the ferry dock, my thoughts turned back to the solar powered streetlight. Had that fixture, and pole, and screws, and screw drivers arrived in Ketapang after 15 hours on boats from the international airport where we landed 222 miles away? They certainly weren’t made on this island; were they? How reasonable is it to expect places like Ketapang to leap frog industrialized nations into an energy transition if so many other parts of their infrastructure are in equal or greater need of innovation?

This notion distracted me again when I found myself staring at another streetlight on the Malaysian side of the island in a town called Marudi. Did I tell you I’m pretty into streetlights? I led an initiative in my home town of Asheville, NC to convert all of our streetlights to LEDs in 2012; we were the first city in the U.S. to do this.

This second fixture wasn’t nearly as elegant as the solar powered LED fixture in Ketapang. Yet it made me smile for their municipal leadership just the same.  This time, also, for the ingenuity of it. You see, this light had a cover of scrap roof tin, a single CFL bulb, and a beat up plastic water bottle light shield (see photo).  Many of us can understand the vulnerability of above ground power lines connected to an inconsistent grid and power source. But even with that, Marudi was able to provide a municipal service to their citizens via a quick install of readily available and reusable materials.

These two examples beg the question: Which approach is more sustainable? A homemade streetlight with reusable materials you can find in country or a solar powered LED streetlight manufactured abroad? When facing puzzles of this sort, I start by asking, “What problem is that city trying to solve?” We don’t always acknowledge that answering questions about sustainable energy, and ultimately climate change, isn’t about the right answer, it’s first about the right question. We have to understand that needs on the ground, especially in developing countries, are rarely only focused on CO2 reduction.  Sometimes they are just about a little bit of light.

If you want to invest in a life after carbon, I encourage you to understand what the problem feels like on the ground, then ask yet another question, “How can I support the problem solvers in these cities?” After all, it will be their knowledge of their problem that will guide their solutions.  It’s these homegrown solutions in cities at home and abroad that should disrupt current practices, policies, and technology for a carbon-free future.

Maggie Ullman is a contributing author to Investing Strategically in Social Impact Networks, the companion guide to Connecting to Change the World. She leads Ullman Consulting (www.UllmanConsulting.net) which specializes in helping philanthropy invest in climate change at the local level. They work with foundations and their grantees to translate theory of change into action. Maggie lives in Asheville, NC and day dreams of orangutans in Borneo.

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