ESG (Environmental, Social and Governance) and C-PACE

Office Building

ESG (Environmental, Social and Governance) is a hot topic in the world of company’s operations. Public sentiment, purchasing decisions and investment dollars are encouraging business entities, large and small, to be better:

  • stewards of nature (E),
  • managers of their employees and partners in their communities (S), and
  • leaders in regard to transparency, ethics, diversity, and executive pay (G).

With increased Wall Street scrutiny over claims of embracing the “E” or “Environmental” criteria, having verifiable and sustainable impacts on energy and water resources is a way for these organizations to meet the high demands and expectations of consumers and investors, alike.

One practical way toward accomplishing these goals is to incorporate Commercial Property Assessed Clean Energy (C-PACE). C-PACE is a financing tool which helps property owners with qualifying properties make energy or water efficiency upgrades sooner than later.By incorporating more efficient HVAC systems, LED lighting, cool roofs, and other items that reduce consumption, property owners reduce usage, positively and verifiably impacting natural resources and carbon emissions.  This unique financing acknowledges the financial constraints many businesses face, especially in light of COVID-19. In addition to helping finance the cost of these upgrades, most property owners see improved cash flow as a result of the decreased utility costs.

In places like Texas, with so many people relocating here, there are additional drains on water and energy resources. There are existing strains on the infrastructure, such as was experienced during the 2021 “snowmagedon,” and frequent blackouts in the summer. The need to take action is apparent. It is imperative to address existing structures and to support new construction going above code to address this urgent demand.

ESG and C-PACE provide a practical way for companies and property owners to be good stewards of the environment.  An investor, a concerned citizen or a potential employee will be encouraged when a business retrofits, renovates, or constructsa property in a way that achieves the goal of increasing sustainability.

Want to see if your property qualifies for C-PACE? Want to learn more? Please contact Lone Star PACE. Not convinced? The marriage of ESG and C-PACE will also support shareholder financial expectations: Energy Star calculates that a 10 percent decrease in energy use could lead to a 1.5 percent increase in net operating income (NOI).

Sources: https://www.energystar.gov/sites/default/files/buildings/tools/CommercialRealEstate.pdf