How PACE Puts the “E” in ESG

How PACE Puts the “E” in ESG

1,014,443 gallons per year.

That’s the equivalent of 8,115,544 16 oz. bottles of water.(1) And it’s how much water was saved last year by Lone Star PACE projects. PACE stands for Property Assessed Clean Energy—a voluntary program that provides attractive long-term financing of qualified upgrades to commercial, industrial, and multifamily buildings in participating cities and counties.

At the heart of PACE, and at the heart of many corporate and civic sustainability goals and programs, is ESG (environmental, social, and corporate governance)—an approach to evaluating the extent to which a corporation works on behalf of environmental and social goals that go beyond maximizing profits on behalf of the corporation’s shareholders.

Focus on ESG is on the rise. In fact, ESG counts for one of every three dollars of assets under management, according to NASDAQ*.(2)

In this blog we explore the environmental component—the E—in ESG.

E is for “Environmental”

Highlights from a recent report by S&P Global tell us that, “Following the unprecedented market and policy momentum behind ESG in 2021, investors, corporate boards, and government leaders have raised expectations for progress on climate pledges in 2022.”(3)

One example of a PACE project is the Embassy Suites  Hotel and Convention Center in Denton, Texas. Under General Manager Jeff Pritts, this Embassy Suites is a two-time Connie Award winner, representing the highest hotel award for all brands across Hilton and marking the ‘best of the best’ for each brand within Hilton Worldwide. It is also in the top 1% in service four years running 2018-2022.

By obtaining the PACE loan, the property owner put the E in “environmental” when it added a 673 KW solar component to their LEED Gold certified 318-room hotel complex. The environmental impact? It generated 980,069 kWh/year which offsets 21% of the property’s energy demand.

The total impact from Lone Star PACE projects in 2021:

  • More than one million gallons per year of water have been saved,
  • Thousands of tons of coal have been offset
  • Carbon emissions averted.

Good for the Planet. Good for Business.

Let’s face it, nowadays people are paying closer attention to doing business with those that implement environmentally friendly practices against climate change. And companies that do so are more marketable than those which aren’t.

When property owners invest in efficiency upgrades to HVAC units or upgrade to renewable energy sources for buildings, the energy savings represent good corporate governance from a financial standpoint, and minimizing the building’s carbon footprint represents environmental responsibility when it comes to ESG.

Economic Development Through Job Creation

There is an additional “E” when it comes to PACE—economic development. By serving as an advocate, educator, and compliance manager, the Lone Star PACE team helps jurisdictions in Texas maximize the environmental and economic development impact of their C-PACE program.   

How does it work exactly? PACE not only allows commercial property owners access to more affordable financing, thus helping increase the amount of cash flow to the bottom line, it also allows counties and cities to increase their economic development, redevelop older buildings, and create local jobs. As Lone Star PACE expands the number of completed projects, PACE-related jobs are created throughout the state of Texas.

When we work with PACE lenders that provide financing for energy efficiency, renewable energy, and water conservation improvements to existing properties we serve as administrators to generate tangible benefits to property owners, local governments, contractors, and entire communities.

ESG is everyone’s responsibility. It’s also an opportunity for growth. To learn more about the environmental impacts of Texas PACE projects, download the 2021 Annual Report.