Recent federal rollbacks of environmental justice policies by the Trump administration are exposing U.S. companies—and their boards—to mounting litigation and reputational risks. As federal protections fade, states and citizens are stepping up enforcement, particularly in regions with long histories of industrial pollution.
A new analysis in Financial Times Agenda warns that companies operating without robust environmental justice (EJ) tools, such as the rescinded EJ Screen, are more vulnerable to lawsuits and reputational harm. Investor advocates say this creates clear financial risks for firms ignoring the disproportionate impact of pollution on marginalized communities.
“Those communities are absolutely more exposed to environmental and human health harm without these screens,” said Alexandra McPherson, Director of the Investor Environmental Health Network (IEHN).“Companies operating in states like Louisiana, Mississippi, and Alabama are much more exposed to vulnerabilities, particularly litigation and reputational risk.”
The article also highlights how tools like EJ Screen once helped companies make informed siting and design decisions that minimized harm and reduced risk. With those federal tools gone, McPherson and others are urging companies to adopt best practices voluntarily and continue using publicly available alternatives—such as Harvard’s version of EJ Screen.
As public scrutiny rises and local regulations strengthen, companies must weigh short-term deregulatory benefits against long-term costs—including rising litigation settlements, reputational damage, and investor pressure.