Solstice at the site of a community solar farm in Massachusetts. (Photo courtesy of Solstice)
A 1983 US government study documenting the placement of hazardous waste landfills in low-income and Black communities was one of the first studies to highlight the intersection of environmental issues and racial inequity. In the nearly 40 years since, tackling climate change has become an increasingly important aspect of the environmental justice movement. In this period, surface temperatures across the United States have increased by a relative average of 1.2 degrees Fahrenheit (0.65 degrees Celsius) and between 6 to 7 billion metric tons of greenhouse gases have entered the atmosphere each year.
While these increases present a powerful threat to all life, they have a disproportionate impact on indigenous communities and communities of color. According to the US Environmental Protection Agency, Black and African American people in the United States are currently 40 percent more likely to live in areas that are predicted to have the highest climate change-related increases in mortality rate. This is predicted to rise to 59 percent should we reach 7.5 degrees Fahrenheit (4 degrees Celsius) of global warming.
Decarbonization and the corresponding transition to a low-carbon economy need to happen quickly. In its latest report, the Intergovernmental Panel on Climate Change predicts that greenhouse gas emissions will need to nearly halve by 2030 to limit warming to around 2.7 degrees Fahrenheit (1.5 degrees Celsius). But the process also needs to be just, ensuring that the most vulnerable people and communities are at the heart of climate action. New commercial and development opportunities need to reach the communities most impacted by climate change.
The Global Financial Markets Association estimates that achieving a just transition will require between $3 and $5 trillion each year for the next 30 years. At the same time, Black and Indigenous communities and communities of color have limited access to financing, including for activities that would support their active involvement in the shift to a green economy. Only 1 percent of Black business owners were able to obtain loans in their founding year, for example, and the mean value of business equity held by Black Americans is four times lower than that of white Americans.
Despite this, studies show that minority-owned businesses contribute $400 billion to the US economy and support more than 2.2 million jobs. And where most of us see challenges, entrepreneurs often see opportunities. Many of these business owners want to drive a just transition, mitigating the impacts of climate change on their communities and including them as part of that solution. Rooted in local, social networks and equipped with on-the-ground knowledge, these entrepreneurs are working toward sustainability and racial equity—and there's a significant incentive to support them with the resources that they need to grow and scale their impact.
Scaling Working Solutions
Companies building climate justice solutions are not easy to scale at speed, especially against the timescale necessary to reach net-zero targets. While start-ups excel at creating innovative solutions, larger companies know how to scale concepts. Unreasonable Impact, a collaboration between Unreasonable Group and Barclays, aims to bring these two together. In addition to financing and mentorship, the program supports entrepreneurs solving pressing social issues by connecting them with partners that can help their organizations grow.
While traditional accelerators focus on early-stage entrepreneurs, Unreasonable Impact concentrates on business owners who have working solutions. These companies already have financing, staff, and revenue, and most have been running for four years or more. Entrepreneurs are invited to join the program based on their companies’ ability to scale, solve social and environmental problems, and spur job growth. To date, it has worked with more than 250 entrepreneurs, who have raised more than $9 billion in financing. At least 50 percent of the companies included in the last two US programs were owned, founded, or led by Black, Latin, Asian, or Indigenous leaders.
Here is a look at how three of these entrepreneurs are driving climate justice change in their communities and how the program is contributing to their growth.
1. Easing the Energy Transition
In the United States, Native American reservations represent only 2 percent of the land but hold approximately 20 percent of the country’s fossil fuel reserves. This includes coal, oil, and gas worth some $1.5 trillion. Even though the coal industry has provided work and tax revenues to people in these areas, some Indigenous groups are looking to help drive the shift toward renewable energy. They want to preserve their land, increase employment, and fight global warming.
Brett Isaac, executive chairman of Navajo Power, grew up in the shadow of a coal mine on the Navajo Nation reservation in Arizona. Recognizing that the end of coal would mean an energy transition and that his community needed to prepare to participate in it, he set up Navajo Power to develop solar and storage projects and replace coal facilities on his tribe’s lands.
One important aspect of his work was getting buy-in from the tribal community. He explains, “The hardest thing to do is develop on tribal lands because there’s such a unique aspect to getting consent and getting approval, which has to be communicated back to investors.” But today, the community shares in the company’s success. Navajo Power reinvests 80 percent of all profits into new projects within the communities it’s partnered with.
The company joined Unreasonable Impact in 2021, just three years after it launched. Its focus was on entering new markets and Isaac was looking for connections to authorities in transmission and energy planning. The program helped position Navajo Power as a nascent leader in the space and introduced Isaac to experts who could advise on finance and energy markets that were important to the company’s growth. He explains, “It was really beneficial to figure out cost parameters and what the markets expect for large projects. Unfortunately, in tribal communities, this is very difficult information to come by.”
Barclays’ energy finance team gave Isaac advice on how to create a profitable business model and how to leverage Navajo Power’s powerful story. Isaac explains, “Our business strategy became more apparent because of Barclays’ expertise and that guidance has translated into a higher quality product offering.” Following the program, Navajo Power secured $10 million in investment, led by W.K. Kellogg Foundation.
Networking opportunities with fellow CEOs through Unreasonable Impact have also helped Isaac become a more sophisticated leader in areas such as growing remote teams and building partnerships. The company is now focused on accelerating its growth and expanding its work from the American West to the Midwest. It continues to lift up tribal communities through the development of clean energy products on tribal land.
2. Cutting Food Waste Emissions
Nationwide statistics in the United States show that nearly 20 percent of Black individuals experienced food insecurity in 2021 and that Black children are almost three times more likely than white children to live in a food-insecure household. Meanwhile, the US Environmental Protection Agency estimates that 35 percent of the overall food supply is lost or wasted. This waste contributes to 170 million metric tons of greenhouse gas emissions and contains enough calories to feed more than 150 million people a year.
Jasmine Crowe began providing food to people experiencing homelessness and hunger in downtown Atlanta, Georgia, after being “blown away by how much food was going to waste while so many people were going hungry.” In 2017, she founded the company Goodr to address food insecurity, while also uncovering profitable solutions for businesses that want to reduce food waste while combating food poverty. “I look at hunger as a matter of logistics,” she says, “not as an issue of scarcity.”
To achieve this mission, Goodr uses an app that allows partner nonprofits and companies to schedule edible surplus food pickup. It also offers logistics consulting to help organizations reduce landfill waste.
To date, the company has served more than 30 million people in need and diverted more than 5 million pounds of food from landfills—and it’s well-poised to grow exponentially. Through Unreasonable Impact, Crowe is currently connecting with large enterprises and other potential strategic partners to extend Goodr’s reach. With the help of senior leaders at Barclays, she’s been able to streamline the business and solidify a contract for Goodr to service Barclays’ corporate cafés in the United States. Other mentors from the Unreasonable community also contributed to Goodr’s Series A investment round, positioning Goodr to provide 50 million meals per year by 2025 across the country.
3. Making Solar More Accessible
Solar energy offers a sustainable alternative to fossil fuels, given its low impact on the environment and the potential for any country to produce it. According to the US Energy Information Administration, in 2022 solar energy will provide about 45 percent of new US electric generation capacity, compared to just four percent in 2010. But while it’s growing, solar power’s benefits don’t shine equally on everyone. Research shows that areas where more than 50 percent of the population identifies as Black or Latino have significantly less access to rooftop solar than areas with a majority white population.
In Massachusetts, Sandhya Murali co-founded Solstice in 2016 to address both problems. “Solar energy isn’t something that only a privileged group of people should be able to participate in,” she says, and the company believes clean energy can power every community. Solstice’s customers sign up for a portion of a “solar garden” located in the local community. Similar to a community food garden, members sign up to support a shared resource and benefit from its production. In this case, they receive credits toward their electricity bills. “It gives the community equal access to the economic and environmental benefits of solar power regardless of space or homeownership,” says Murali, including “renters and low- to moderate-income customers that have been traditionally locked out of the renewable energy transition due to cost.”
Solstice also works with community organizations and local houses of worship to reach customers that big-business solar providers might overlook. It’s also building connections with larger tech companies that will pass along any savings they get from using clean energy to lower-income households.
When Murali joined Unreasonable Impact, she was four years into her business and was “no energy industry expert.” The program gave her opportunities to brainstorm strategy ideas with Barclays’ experts in utilities and renewable energy companies. “Their ideas and opinions about Solstice gave me a whole new perspective on my business plans,” she said. She is now collaborating with an Unreasonable Group mentor on a business plan for a new solar product.
Collaborative Advantage
Ventures that operate at the intersection of profit and purpose will play an important role in achieving a just transition to a more sustainable future. The job of investors and large businesses is to create global support systems for entrepreneurs who are addressing challenges they see in their communities in ingenious ways and who need partners and strategic financing.
Programs like Unreasonable Impact give climate justice entrepreneurs working within their communities a collaborative advantage. They may already have solid business models, but to scale they need best-in-class mentorship, access to global networks, and strategic industry advice. Larger businesses can apply their expertise, networks, and capital to rapidly scale local, innovative solutions. It’s not only the right thing to do for entrepreneurs who haven’t had equitable access to mainstream capital markets, but also imperative to the survival of businesses in the transition to a lower-carbon economy. What’s more, just as Goodr is helping Barclays channel surplus food to those in need, innovative startups can help larger businesses achieve their own climate justice goals.
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Read more stories by Daniel Epstein & Travis Barnes.