Who Believes In ESG? The U.S. Department of Defense, That’s Who

A growing body of evidence has established that ESG (environmental, social, governance) principles are good for business. The U.S. Department of Defense (DoD) is also applying similar principles to decarbonize its operations and plan for the impacts of climate change. A new solar project in Hawai‘i illustrates how ESG principles are being put to service for national defense.

The Department of Defense embarks on an energy transition

During the Obama administration, the Department of Defense embraced a high-profile position as a market-mover and advocate for climate action, including solar energy, biofuels, energy efficiency and other clean technologies. Despite the lack of support for climate action by former President Trump,  the DoD continued to invest in decarbonization during the Trump administration as well.

The U.S. Air Force apparently could not wait for former President Trump to finish his term. Just a few weeks before Election Day 2020, the Air Force publicized a carbon-negative goal for itself and the entire DoD. The Army also announced a net-zero goal for itself last February.

New opportunities for U.S. businesses

All of this translates into new opportunities for U.S. firms that do business with the DoD, and the pile is growing. A Pew Research study from 2011 calculated that the U.S. Department of Defense increased its clean energy investments from only $400 million in 2006 to $1.2 billion in 2009. At the time, Pew anticipated that DoD would spend more than $10 billion on clean energy annually by 2030.

At a federal budget hearing last June, the DoD also emphasized the connection between clean technology and national security. “The department is addressing a change of technology operational and policy initiatives to enhance the use of energy and warfighting. To that end, we are requesting $4.3 billion in energy investments, including both insulation energy and operational energy," the DoD said.

The DoD is also pursuing the low hanging fruit of energy conservation, with the help of the Energy Resilience and Conservation Investment Program. The energy conservation program was established under the federal military code in 2006, as part of an agency-wide energy funding initiative aimed at resilience and readiness as well as conservation and cost-cutting. The Defense Department requested approximately $287 billion for the program in the FY 2020 budget.

Clean energy for the community, too

In addition to its interest in the energy resilience and health of its own facilities, the DoD also recognizes that a strong national defense depends on the health and resilience of the surrounding communities. 

That approach is illustrated by a new solar array and energy storage project to be constructed on 131 acres of federal property at Joint Base Pearl Harbor-Hickam's (shown above) West Loch Annex in Hawai‘i, on the island of O‘ahu. The 42-megawatt Kūpono Solar Project broke ground last week. Once up and running in 2024, it will deliver enough clean energy to the grid for 10,000 homes.

Ameresco, the project developer, estimates that the project will shave 50,000 tons of carbon dioxide from the carbon footprint of Hawai‘i.

“This is a great example of climate action, building access to clean, reliable energy sources inside and outside the fenceline,” emphasizes Meredith Berger, Assistant Secretary of the Navy for Energy, Installations, and Environment.

“The Department of the Navy is proud to partner with the Kūpono Solar team and Hawaiian Electric as we enhance mission and community resilience and move purposefully towards Hawai‘i and Navy’s energy goals,” she adds.

Military contractors are on board with ESG

There is clearly some tension between military operations and ESG principles. That has tested the limits of ESG funds, which tend to avoid defense and aerospace stocks.

Nevertheless, military contractors have begun advocating for ESG principles within the DoD. The leading DoD contractor and advisor Noblis, for example, has noted that DoD’s annual Sustainability Report and Scorecard could be expanded.

Specifically, Noblis makes the case for expanding the Executive order that established the Scorecard, to implement science-based targets and other hallmarks of mature ESG reporting.

“Expanding EO requirements involves increased disclosure and planning related to sustainability, climate risks and environmental justice which apply to all DoD program areas as well as the Department’s overall mission,” Noblis explains.

“The DoD has also identified environmental justice as a critical practice while its national defense mission is working to include it as a key consideration in its governance structure. An ESG framework to reporting and planning meets EO requirements, strategically incorporates insights from relevant stakeholders and leadership and advances DoD missions,” the DoD concludes.

Next steps for ESG

The ESG movement has come under fire from Republican office holders, candidates and other allies in recent months. The attacks are as timely as they are political, as the ESG movement is increasingly at odds with the issues selected by GOP leaders to satisfy and motivate their electorate. That includes climate change conspiracy theories and the election fraud lies, in addition to attacking LGBTQ rights and abortion rights, among other issues.

In contrast, the national defense and corporate focus on climate action, human rights, civil rights and transparency dovetails with the positions espoused by an overwhelming majority of Democratic office holders and candidates, and their allied stakeholders.

The political consequences are clear. The ESG movement has cut the Republican Party adrift from both business and national defense. They continue to soothe the shattered nerves of their voters with a barrage of lies about election fraud, because that is the only case they can make.

Image credit: DoD Media