A new day dawns in Pennsylvania for mixed use residential rental projects and C-PACE financing. C-PACE stands for Commercial Property Assessed Clean Energy Financing and has now been approved in over 28 states in the US,
C-PACE financing provides borrowers with a low-cost, long term financing option that typically supplements senior financing from traditional banks and can act to reduce required equity needed for a given project.
Terms of C-PACE vary by state but many C-PACE lenders will provide funds for up to 30 years, at approximately 5.25% for approximately 25-30% of the total project cost. As such, C-PACE financing is only slightly more expensive than conventional debt and has a much longer term, and is much cheaper than traditional real estate transaction equity.
C-PACE allows existing and new properties to improve their infrastructure, reduce operating expenses and thereby increase overall value. Eligible improvements typically include energy efficiency, renewable energy, seismic and storm water measures and are typically available for office, industrial, mixed use and hotel projects.
Prior to the passage of SB 635 earlier this week, PA’s C-PACE program did not allow for residential rental mixed use projects to participate. Due to the hard work of many constituents, the legislature amended their statute to now permit mixed use rental residential to qualify as a “qualifying commercial property.”
C-PACE acts as on-bill financing for the cost of applicable approved improvements. Costs are assessed much like a sewer easement or real property tax bill on the borrowers bill. C-PACE loans cannot be accelerated in the event of a default which works to protect the senior lender to the project from being outbid at a foreclosure. C-PACE lenders are willing to lend funds to projects despite this limitation as they have a first priority lien status for outstanding amounts then due and when a project continues to receive energy the bill will include the C-PACE charge – i.e., the C-PACE lender may have to wait a bit to get paid but they will be paid so long as the property is receiving and being billed for energy.
The focus of the C-PACE program is to enable energy and water efficiency upgrades at properties, as well as resiliency improvements, water conservation and renewable energy projects.
Fuel For Thought – once the Bill is signed by Governor Wolf and goes into effect in approximately 60 days, one of the hottest property types in Pennsylvania (i.e., multi family rental residential) will qualify for C-PACE on a go forward basis and will likely see a marked uptake in the amount of C-PACE lending in the Pennsylvania arena. New Jersey has also approved C-PACE lending but regulations have not been published by the NJEDA since passage of C-PACE in 2021 (stay tuned on that front),
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project and how C-PACE might apply with you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Jeff Hamera, Nanette Heide, Joel Ephross, Robert Montejos or David Amerikaner or the attorney in the firm with whom you in regular contact or the attorney in the firm with whom you are regularly in contact.
Data Centers – From the Clouds – Much Ado about ESG!
We had the opportunity to chat with some of the leading owners and builders of data centers space today on our Data Centers Task Force group meeting. Fascinating and fun conversation with Aaron Binkley of Digital Realty and David Hall and David Sitkowski from Clune Construction Company.
Some key take aways from the conversation:
– multiple new entrants into the data center space are putting pressure on rents (upward) with a lot of venture capital funding the new entries
– Increased focus by Owners (and customer/users) on renewable energy with an understanding that the renewable energy is cheaper but NOT Free.
– Energy markets remain a bit volatile for renewable energy with federal tariff on solar panels continuing to negatively impact supply
– Climate related reporting from the EU taxonomy, Singapore and potential SEC proposed rules creating a continued ESG focus by owners and customers in the Date Center space
– Supply chain issues continue to negatively affect delivery times and cost – causing consternation but opportunity as well
– Noting generators are taking in certain locations over 72 weeks for delivery and switch gear breakers taking over 16 months for delivery from the normal 6 months
– Labor Shortages continue in various markets delaying jobs – e.g., Pacific NW on carpentry and Phoenix on electricians and other trades
– Deals continue to increase in size and scale despite increased need for local based service of smaller scale
– Increased cooperating and sharing of work pipeline to enable design and build on time
– increased federal work in the data center site space
– increased interest by customers in LEED and Energy Star certifications but not everywhere
– increased interest in power coming from solar and wind sources both on site and off site through power purchase agreements (e.g., in VA, TX, CA, Illinois and NJ)
– customers and employees continuing to ask about sustainable features in buildings and in power supply and other areas of design
– Communities are beginning to wake up to data centers and in certain locations object to their noise and power consumption, noting the lack of traffic and school impacts given their use
– Water is becoming more and more relevant to the conversation and how water is or is not used in cooling systems (noting – Digital Realty does not use water in its cooling solution but towns where they operate are starting to ask about this resource)
– Permitting for generators which used to be relatively easy to obtain is now starting to get a bit trickier and harder to get on an over the counter baiss given potential air quality issues and diesel for generator issues – resulting in additional time for development permits
– Site Selection – certain jurisdictions with a high amount of data centers are beginning to increase real estate taxes for the data center user/owner which will likely, in turn, have these owners focus on other locations which are not so pricey by way of taxes.
From the Cloud – on balance, labor shortages, supply chain and increased focus by customers on ESG is driving various changes to design and build in the data center space to ensure timely and on budget deliveries. While supply chain issues should clear up in Q4 to Q1 of 23′, the focus on ESG should continue well into the future as more and more customers are adopting GhG reduction targets and more and more owners follow the lead of big industry players like Digital Realty and Prologis.
Duane Morris has an active Data Centers Team as well as an ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your data center project and your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project with you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Jeff Hamera, Joel Ephross, Robert Montejos or David Amerikaner or the attorney in the firm with whom you in regular contact.or the attorney in the firm with whom you are regularly in contact.
ESG: – New York City Council Passes a Natural Gas Ban for New Buildings
Last week, New York City’s city council approved a ban on natural gas as a fuel source in newly constructed buildings.
Per reporting from NPR, nearly 40% of carbon emissions in the country — and more than 50% of New York City’s emissions — come from buildings.
The new natural gas ban in newly constructed buildings, by a vote of 40-7, applies to buildings that are up to 7-stories in height by the end of 2023; buildings that are taller than 7-stories have until 2027 to comply.
The bill contains several exceptions, including hospitals, laundromats and crematoriums.
As noted by NPR, the legislation also requires that the Mayor’s Office of Long-Term Planning and Sustainability conduct 2 long term studies. The first will examine the use of heat pump technology and the second is a study on the impact of the new bill on the city’s electrical grid.
Not surprising there has been massive pushback from the natural gas industry against these type of natural gas bans. This pushback, however, has not stopped cities around the country from proceeding with various types of natural gas ban efforts. By way of example, at least 42 cities in California have acted to limit natural gas in new buildings, and Salt Lake City, Utah and Denver, Colorado have also made plans to move toward required electrification in buildings.
Moreover, in Ithaca, New York, the city committed to ending the use of natural gas in all buildings — not just new ones.
Passing this type of natural gas ban for new buildings in New York City, the largest city in the country, marks a significant move for other cities trying to move similar legislation to attempt to cut down carbon emissions in the fight against climate change, joining cities like San Jose and San Francisco that have made similar commitments to reduce emissions.
The efforts to ban natural gas in new buildings in New York City is also being considered on a state wide basis in the New York Senate and House. Senator Brian Kavanagh (D) and Assembly Member Emily Gallagher (D) are working on legislation that would require any buildings constructed in New York after 2023 to be entirely powered by electricity. If their legislation passes, New York would become the first state to ban natural gas in new buildings on a state-wide level.
Triple Bottom Line – By passing this type of natural gas ban in new buildings, focusing on buildings as one of the largest emitters of green house gases, New York has provided other cities with a leader to attempt to follow if they are so inclined. As noted, California has been attempting this type of ban on a city by city basis and has passed 42 such bans throughout the state. If New York state follows the NYC lead it will become the first state to enact such a ban and would mark a bit of a watershed moment in the fight against greenhouse gas emissions showing that buildings can indeed be constructed in this manner if reduced emissions are one of the key goals attempting to be achieved by the builder/owner or the legislature.
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Seth Cooley, David Amerikaner, Jolie-Anne Ansley, Hari Kumar or the attorney in the firm with whom you are regularly in contact.
ESG – State Plastic Bag and Straw Bans – An Update
Earlier this year, Duane Morris Governmental Services published an Alert that discussed states and municipalities across the country banning plastic bags in force. In addition to putting prohibitions on plastic bags, states and localities have also been looking at plastic straw bans as advocates look to reduce plastic pollution as plastics are not biodegradable and cannot break down naturally. It is estimated that Americans use 500 million drinking straws every day. While some legislation only contains plastic straw bans, other legislation loops plastic straws in with other plastic prohibitions.
Connecticut:
Lawmakers in Connecticut introduced HB 6502 earlier this year to prohibit the automatic distribution of single-use plastic straws at certain eating establishments. Specifically, the bill would, effective January 1, 2022, prohibit full-service restaurants from providing customers with single-use plastic straws unless they request it or if the customer has a disability. The legislation defines a “full-service restaurant” as an establishment that primarily services food to be consumed on-site and where an employee does the following: (1) escorts and seats the customer, (2) takes the customer’s food and beverage order after the customer is seated, (3) delivers the order and any requested related items to the customer, and (4) brings the check for the order to the customer’s table.
Violations under the bill would result in a restaurant owner or operator receiving warnings for a first or second violation and a fine for a third violation. The fine would be $25 for each day of the violation, up to $300 in a single year. Enforcement power would belong to a municipal or district health department that has jurisdiction over the restaurant. The plastic straw ban bill additionally does not prohibit municipalities from adopting or implementing ordinances or rules that further restrict a full-service restaurant from providing customers single-use plastic straws, as long as the ordinance or rule does not prohibit a restaurant from providing a single-use plastic straw to someone with a disability.
HB 6502 additionally would phase out the use of particular polystyrene trays and food containers.
Maine:
In March 2021, Maine lawmakers introduced LD 602, which would prohibit the manufacture, sale, and distribution, at retail or wholesale, of single-use plastic straws, splash sticks, and beverage lid plugs made entirely or partly of plastic.
The legislation further prohibits food and eating establishments from providing such items to customers at a point of sale or making them available to customers otherwise. However, food and eating establishments are allowed to provide single-use drinking straws, splash sticks, or beverage lid plugs not made of plastic only upon a customer’s request. The establishment must further collect a fee from the customer of no less than $0.05 for each item provided.
Massachusetts:
Massachusetts lawmakers introduced H. 998 earlier this year to restrict the distribution of single-use plastic straws by prohibiting food establishments from providing such straws to customers unless requested by the customer. H. 998 defines a “food establishment” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption, including but not limited to any establishment requiring a permit to operate under the State Food Code.
The bill states that the straw ban shall not include a straw made from non-plastic materials, such as paper, pasta, sugar cane, wood, or bamboo.
In mid-June, lawmakers scheduled a virtual hearing to address the plastic straw ban legislation. However, the bill has not seen any action since.
Mississippi:
This past session, Mississippi lawmakers introduced Senate Bill 2071, which would have prohibited a food establishment from providing a single-use plastic straw unless a consumer requested such a straw.
The bill’s definition of a “food establishment” is comprehensive. The bill’s definition of a food establishment is as follows: all sales outlets, stores, shops, or other places of business located within the State of Mississippi that operate primarily to sell or convey food directly to the ultimate consumer, including any place where food is prepared, mixed, cooked, baked, smoked, preserved, bottled, packaged, handled, stored, manufactured and sold or offered for sale, including, but not limited to, any fixed or mobile restaurant, drive-in, coffee shop, cafeteria, short order cafe, delicatessen, luncheonette, grill, sandwich shop, soda fountain, tavern, bar, cocktail lounge, nightclub, roadside stand, prepared food take-out place, catering kitchen, commissary, grocery store, public food market, food stand or similar place in which food or drink is prepared for sale or for service on the premises or elsewhere, and any other establishment or operation where food is processed, prepared, stored, served or provided for the public for charge.
SB 2071 died in committee in February 2021.
New York:
Two companion bills in New York have been introduced this year related to plastic straws. A207 and S1505 would allow restaurants to only provide single-use plastic straws unless requested by a customer. The legislation otherwise prohibits restaurants from providing customers with single-use plastic straws or single-use plastic stirrers. Further, the bill specifies that restaurants providing compostable straws or stirrers to customers must have access to curbside food waste collection for composting.
The bills define a restaurant as any diner or other eating or beverage establishment that offers food or beverages for sale to the public, guests, members, or patrons, whether consumption occurs on or off the premises.
Neither bill has advanced this session.
Rhode Island:
In July, Governor Daniel McKee signed House Bill 5131/ Senate Bill 155 into law. The new law prohibits a food service establishment from providing a single-use plastic straw to a consumer unless the consumer requests it. The bill will take effect January 1, 2022, and tasks the director of health with promulgating and adopting rules and regulations to enforce the new plastic straw ban.
Rhode Island’s new plastic straw ban defines a “single-use plastic straw” as a single-use, disposable tube made predominantly of plastic derived from either petroleum or a biologically based polymer, such as corn or other plant sources, used to transfer a beverage from a container to the mouth of the person drinking the beverage. Single-use straws, under the bill, do not include a straw made from non-plastic materials, including, but not limited to, paper, pasta, sugar cane, wood, or bamboo.
The bill further defines a “food service establishment” as any fixed or mobile restaurant, coffee shop, cafeteria, short-order cafe, luncheonette, grill, tearoom, sandwich shop, soda fountain, tavern; bar, cocktail lounge, night club, roadside stand, industrial feeding establishment, cultural heritage education facility, private, public or nonprofit organization or institution routinely serving food, catering kitchen, commissary or similar place in which food or drink is prepared for sale or for service on the premises or elsewhere, and any other eating or drinking establishment or operation where food is served or provided for the public with or without charge.
New Jersey:
On Nov. 4, 2020, Governor Murphy signed into law P.L. 2020, c117, which prohibits the use of single-use plastic carryout bags in all stores and food service businesses statewide and single-use paper carryout bags in grocery stores that occupy at least 2,500 square feet beginning May 4, 2022.
Beginning May 4, 2022, New Jersey businesses may not sell or provide single-use plastic carryout bags to their customers. Those businesses that decide to sell or provide reusable carryout bags must ensure that the bags meet the requirements as defined in the law.
The law defines reusable bags as ones that:
- Are made of polypropylene fabric, PET non-woven fabric, nylon, cloth, hemp product, or other washable fabric; and
- Have stitched handles; and
- Are designed and manufactured for multiple reuses.
Under the new law, polystyrene foam food service products and foods sold or provided in polystyrene foam food service products will also be banned as of May 4, 2022, and food service businesses will only be allowed to provide single-use plastic straws by request starting Nov. 4, 2021.
However, the following products will be exempt for an additional two years, until May 4, 2024:
- Disposable, long-handled polystyrene foam soda spoons when required and used for thick drinks;
- Portion cups of two ounces or less, if used for hot foods or foods requiring lids;
- Meat and fish trays for raw or butchered meat, including poultry, or fish that is sold from a refrigerator or similar retail appliance;
- Any food product pre-packaged by the manufacturer with a polystyrene foam food service product; and
- Any other polystyrene foam food service product as determined necessary by the DEP.
Triple Bottom Line – While it is often inconvenient to not be in a position to carry goods from a store or restaurant in a plastic bag or to drink from a plastic straw, as more states focus on the burgeoning problem of plastic waste entering the water supply and creating land fill capacity concerns, it is very likely that more and more states will continue to enact some level of plastic bag and plastic straw bans as a means to begin to combat this issue. Recycling of plastic would also start to begin to address the issue but has not become an economic reality as of yet given the cost to build facilities that could gather and recycle the applicable plastic in bags and straws and similar materials.
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Ryan Stevens, the author or Brad A. Molotsky, Nanette Heide, Seth Cooley, David Amerikaner, Jolie-Anne Ansley, Hari Kumar, or the attorney in the firm with whom you are regularly in contact.
ESG – EPA Announces National Recycling Strategy
Earlier this month, the Environmental Protection Agency (EPA) released its National Recycling Strategy. Interestingly, as they have not always been aligned on issues in the past, the American Chemistry Council’s (ACC) Plastics Division issued the following statement …“America’s Plastic Makers® today welcomed EPA’s National Recycling Strategy, which will help the U.S. achieve its goal of recycling 50% of post-use materials by 2030. EPA’s Strategy also recognizes the potential of advanced (chemical) recycling technology to transform plastic recycling rates in the United States. Advanced recycling is critical for achieving a more circular economy for plastics. Since 2017, 65 advanced recycling projects have been announced that have the potential to divert more than 5 million metric tons of waste annually from landfills.”
“There is significant alignment in what America’s Plastic Makers are calling for in our 5 Actions for Sustainable Change and what EPA has laid out in its National Recycling Strategy. This is particularly evident in the Strategy’s support of increasing domestic markets for recycled material, creating national recycling standards to reduce contamination and measure results more effectively, and enhancing recycling infrastructure.
Further to this end, the ACC called on Congress to further help the EPA implement its strategy and achieve its recycling goals by enacting policies such as a national standard requiring plastic packaging to contain 30% recycled plastic by 2030 and an American-designed producer responsibility system to improve recycling access and collection of all materials. While some might view this as enlightened self-interest given the 70% no- recycled plastic, this author prefers to focus on the positive attribute of having a 30% recycled content requirement and the positive progress this will represent on this front.
Per the ACC, “consumers want packaging with more recycled plastics material, more than 400 brands have committed to increasing the amount of recycled material in their packaging, and America’s Plastic Makers have set a goal to have 100% of plastic packaging to be reused, recycled, or recovered in the U.S. by 2040. EPA’s Strategy lays the groundwork to make much of this possible.”
Triple Bottom Line – While it is sometimes easy to be cynical about alliances and partnerships in the ESG and sustainability space, in this instance it is nice to see the alignment of the EPA and the ACC regarding increasing recycled content and setting industry wide standards with the ultimate goal to create a 100% goal for recycled, reused or recovered for particular materials. N
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Jolie-Anne S. Ansley, David Amerikaner, Seth Cooley, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.
ESG – NJ Single Use Plastic Ban becomes effective as of November 4, 2021
Beginning this coming week, on Thursday, November 4th, restaurants, convenience stores and other food-service businesses are required to comply with a new NJ state law that prohibits them from providing customers with single-use plastic drinking straws unless the customer has specifically requested one.
The new restriction does not impact the sale of beverages that are prepackaged with a plastic drinking straw, such as juice boxes, nor does it apply to the sale of boxes of straws in food stores.
Per NJBIZ, the by-request-only restriction on plastic single-use drinking straws applies to all food-service businesses, including restaurants, convenience stores and fast-food establishments.
Additional restrictions, which take effect May 4, 2022, include bans on single-use plastic carryout bags, single-use paper carryout bags at grocery stores of 2,500 square feet or more, and polystyrene foam food-service products.
For additional information, the state has created a new website at www.nj.gov/dep/plastic-ban-law which includes information on who are “regulated entities”, a Frequently Asked Questions page, a list of establishments and how the law impacts them, and more.
Additionally, the NJ Business Action Center has created a clearinghouse at https://business.nj.gov/bags/vendorclearinghouse to aid businesses in identifying vendors and manufacturers who sell reusable carryout bags permitted by the new law.
Triple Bottom Line – New Jersey joins a growing list of cities, counties and other states who are clamping down on single use plastics as a source of pollution which is exacerbating a growing issue within our sea life as plastics find their way to streams, rivers and oceans, break down and are ingested by the fish we often eat.
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Jolie-Anne S. Ansley, David Amerikaner, Seth Cooley, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.
ESG – NJ BPU awards 165 MW of Community Solar in Yr 2 of Pilot Program
Earlier this week, on October 28, 2021, the New Jersey Board of Public Utilities (“BPU”) approved 105 applications under New Jersey’s Community Solar Energy Pilot Program. The applications and awards will create 165 megawatts of clean energy – enough energy to power approximately 33,000 homes – available to low-to-moderate income and historically underserved communities. Year 2 of the pilot program represented a significant increase in the amount of power generated (i.e., from 78 MW to 165 MW) and the number of applications seeking to install community solar.
According to Governor Murphy, “our Community Solar Pilot Program is a national model for clean energy equity and environmental justice, This program not only makes solar available to those in historically underserved communities, but also will spur economic growth and create career opportunities for a diverse, more inclusive workforce. Community solar is a key pillar in our commitment to transition New Jersey away from harmful emissions and towards 100% clean energy by 2050.”
A community solar project is a solar array whose output is divided between multiple homes or businesses that want to use renewable energy but don’t have a solar array on-site.
Community solar programs aim to create a more equitable solar market.
According to NJ BIZ, the projects will each allocate a minimum of 51% of their capacity to low- and moderate-income participants and will all be located on landfills, brownfields or rooftops.
Though 105 projects were approved, the NJBPU received 412 applications, representing almost 804 MW, for the second year of the pilot program.
In the pilot program’s first year, the BPU received a total of 252 applications representing more than 650 MW of total capacity, and approved 45 applications providing almost 78 MW in solar energy capacity.
Earlier this month, the BPU announced that it will be moving forward to make the Community Solar Pilot Program permanent.
Triple Bottom Line – New Jersey continues to be a factor in the US solar market place. Making the community solar pilot program a permanent program will continue to position the state as a leader in solar deployment and per capita renewable energy use. The power creation represented by the program will likely solidify existing solar jobs and create new ones to service the demand for installations and service. Low and Moderate income families will benefit by the cheaper cost of energy given the renewable nature of the deployment. As the program moves to a permanent status we will continue to keep an eye on the regulations and report back with our findings.
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Jolie-Anne S. Ansley, David Amerikaner, Seth Cooley, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.
#ESG – NJ Utility PSEG announces two new environmental commitments and issues 2021 Sustainability Report
Local utility Public Service Enterprise Group (“PSEG”) announced earlier today, October 15, 2021, that it has joined The Race to Zero and Business Ambition for 1.5°C, two campaigns that use science-based targets to aid the fight against climate change.
The Race to Zero and Business Ambition for 1.5°C campaigns are designed to help mobilize support from businesses, cities, regions and investors for a healthy and resilient zero-carbon economy, in line with global efforts to limit warming to 1.5°C.
PSEG’s also issued its 2021 Sustainability and Climate Report, which updates the company’s achievements and goals for a wide range of topics, including air emissions, energy efficiency, transportation and waste minimization.
PSEG Chairman and CEO Ralph Izzo said “Climate change is one of the preeminent challenges of our time, and PSEG has an obligation to help address climate change and its effect on our environment, our customers and communities around the world.”
Their Report showed PSEG’s generation portfolio emission rates for NOx and SO2 were down year-over-year by 58% and 77%, respectively, reflecting emission rates that are significantly below industry averages.
The Report also provides updates on PSEG’s progress across a range of sustainability categories, including:
- Energy efficiency: PSEG’s energy efficiency targets have been updated and remain on track. New Jersey regulators approved $1 billion of energy efficiency spend for the three-year programs, designed to help the state achieve its updated framework for energy efficiency and peak demand reduction programs, setting five-year savings targets of 2% for electric distribution and 0.75% for gas distribution companies. PSEG’s targets are aligned with New Jersey’s Clean Energy Act (2018), which calls for these savings to be achieved by 2023.
- Transportation: PSEG aims to reduce fossil fuel use in its own transportation fleet through vehicle electrification, rightsizing the fleet and utilizing renewable fuels. By 2030, PSEG aims to convert its passenger vehicles, such as sedans and SUVs, 60% of medium-duty vehicles and 90% of heavy-duty vehicles to battery electric vehicles, plug-in hybrids or anti-idle jobsite work systems.
- Waste minimization: Companywide, waste and recycling programs successfully diverted 95.5% of material from landfills in 2020. The ongoing goal for its utility, PSEG to focus on new waste streams for recycling, which will continue to decrease landfill tonnage. The waste minimization goal for PSEG is to divert in excess of 95% of material from landfills.
- Air emissions: PSEG is reducing air and other emissions by updating its operations and transitioning to cleaner sources of energy, and, per their Report, already has one of the lowest emissions rates among investor-owned power producers, according to MJ Bradley’s Benchmarking Air Emissions report, July 2021. As of 2020, PSEG has reduced its greenhouse gas emissions by more than 54% since 2005 through switching to lower-carbon fuels, improving energy efficiency and modernizing its electricity and natural gas networks, among other strategies.
- Biodiversity: PSEG is committed to promoting and enhancing biodiversity through natural resource conservation while continuing to operate in a safe and reliable manner. PSEG established the Estuary Enhancement Program in 1994. Protection of natural resources and biodiversity informs their environmental philosophy and the planning process considers the potential impacts on regional biodiversity.
- Diversity, equity and inclusion: PSEG has a target of 30% of total applicable spending allocated to diverse suppliers, including minority-, women-, veteran- and LGBTQ+-owned suppliers. During 2020, PSEG had a sixth consecutive record-setting year by buying more than $644 million worth of goods and services from diverse suppliers, a 15% increase over 2019. More than 28% of the company’s purchases were with diverse vendors. And PSEG is helping develop New Jersey’s clean energy workforce through innovative training and development programs, emphasizing low- to moderate-income and underrepresented communities.
- Environmental justice: According to the Report, PSEG is developing an environmental justice commitment in support of the many diverse communities it serves across the region and believes such a commitment should convey the importance of centering environmental justice considerations across the organization so that customers — especially those in underrepresented communities — can benefit from the coming changes of a decarbonized future.
Triple Bottom Line – PSEG is one of a growing number of public utilities that have pivoted and started to embrace climate goals and climate change as being critical to their future success. While not all utilities are aligned this way, many are beginning to take real steps to make change in this regard. Much still to do for sure but good, solid, accountable and reportable steps in the sustainability and ESG arenas. Kudos for the effort and the transparency.
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Darrick Mix, Jolie-Anne S. Ansley, David Amerikaner, Christiane Campbell, Sheila Slocum-Hollis, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.
ESG: Boston University Joins the Growing List of Universities Divesting from Fossil Fuels
Earlier this week, Boston University’s Board of Trustees announced that they had decided to divest its endowment from fossil fuels.
According to an open letter dated Sept. 23 and posted on the school’s website, President Robert Brown said the board made its decision earlier that week.
As of Sept. 22, the school will no longer commit direct investments in companies that extract fossil fuels. It will also divest from current, direct investments in fossil fuel extractors and will not commit to any new investments in dedicated fossil-fuel focused products in any asset class.
However, the school has private fossil fuel investments that will likely take more than a decade to wind down per reporting from Justin Mitchell.
The release also indicated that the endowment will seek out investment managers that can provide opportunities in renewable energy sources and “fossil-fuel-free products.”
Brown’s letter also stated that only “a very small fraction” of the university’s endowment is invested in “fossil fuel producers and extractors,” rendering the move to divest “economically inconsequential.”
According to Mr. Mitchell, the endowment is valued at more than $3 billion, according to Boston University’s website and it had approximately $2.4 billion at the end of the 2020 fiscal year, according to an annual report from the National Association of College and University Business Officers.
Boston University is the latest prominent university endowment to announce a divestment from fossil fuels, joining the University of California, Brown University, Cornell University, Georgetown University and Harvard University, in committing to this type of divestiture program.
Triple Bottom Line – BU has joined the growing chorus of major institutions that have begun divesting their endowments of fossil fuel investments. While BU’s announcement is not individually overly statistically significant numerically, the number of major higher educational institutions is continuing to grow and gain momentum. As more institutions of higher education join this chorus, it is likely that fossil fuel divestiture will become more than a few one offs and has the potential to become a trend in the ESG space.
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Darrick Mix, Jolie-Anne S. Ansley, David Amerikaner, Edward Cramp, Katherine D. Brody, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.
ESG – Wynn Resorts Announces Sustainability Goals with public ESG Reporting – Big Moves!
Earlier this week, on September 21, 2021 Wynn Resorts issued its Environmental, Social and Governance (ESG) Report, which included the Company’s collective pledges and defined goals to decrease emissions and confront the mounting risk of climate change.
According to the report, Wynn Resorts has achieved various ESG and Diversity, Equity and Inclusion (DEI) goals, with strides being made in community outreach and crisis relief efforts, responsible business practices, and human rights.
In the report’s forward, Wynn Resorts CEO Matt Maddox remarked, “…operating in today’s socially and environmentally-fraught world, [the company] is called to a higher standard: to take responsibility, not just for our decisions, but for the all future impacts of those decisions. Impacts we ourselves may not live to see, but will have caused, nonetheless. Decision-making with careful consideration to the impacts 20 or 30 years from now isn’t just essential, it’s an existential imperative. That is what the future demands of us.”
The Wynn Resorts sustainability program, known as Goldleaf, attempts to bring solutions to the wide range of environment and climate challenges that are unique to each resort that Wynn Resorts operates.
Under the direction of CEO Matt Maddox and Chief Sustainability Officer Erik Hansen, the Company has committed to the following Wynn Resorts Corporate Sustainability Goals:
Net-Zero by 2050: To reduce or offset all carbon dioxide (CO2) produced by our operations no later than 2050.
Carbon Dioxide Emissions Peak by 2030: To stop and reverse year-over-year growth of operational carbon dioxide (CO2) emissions by 2030.
50% Renewable Energy Procurement by 2030: To increase Wynn Resorts supply of renewable energy produced or procured to at least 50% of total consumption by 2030.
The above commitments are aligned with the recommendations made by the Intergovernmental Panel on Climate Change (IPCC) for limiting global warming to below 1.5 degrees Celsius, as referenced in the 2015 Paris Climate Accord.
In 2020, Wynn Resorts completed several major projects in renewable energy, waste diversion, and emissions reduction, including:
Wynn Resorts installed 23 Megawatts of solar power capacity in the United States, which offsets 100% of the energy consumed in the 560,000 square-feet of convention space in Las Vegas, and up to 75% of the peak power demands of the entire 10-million-square-foot Las Vegas resort.
Wynn Las Vegas reduced its annual energy consumption by 20% in 2020 relative to 2015 through capital investments in critical energy-reducing technologies and operational efficiencies, most notably the 160-acre Wynn Solar Field and a concerted effort on preventive systems maintenance.
Encore Boston Harbor received 100% of its energy from renewable and green sources of power and, according to the Report, is the first integrated resort in the Unites States with an onsite microgrid balancing solar energy production, combined heat and power co-generation, and battery storage.
Wynn Las Vegas reduced Carbon Dioxide (CO2) emissions by over 80,000 metric tons from 2019 to 2020, achieved by offsetting energy procured from traditional fossil fuel-based generation with renewable and green energy products.
Encore Boston Harbor diverted 100% of waste from the landfill in 2020 during its first full year of operation, utilizing its comprehensive waste management infrastructure of recycling, composting and waste-to-energy conversion to ensure no waste goes to a landfill.
Wynn Resorts CEO Matt Maddox spearheaded the creation of one of the hospitality industry’s first science-based Health & Safety Plan, which Maddox presented during the White House Business Council on Reopening. The plan became the preeminent roadmap to a successful reopening effort, with policies adopted by several other international brands and industries.
Wynn Las Vegas collaborated with University Medical Center (UMC) to open the UMC COVID-19 Vaccination Center, the first vaccination site to be located onsite at a resort, which administered over 50,000 vaccinations to eligible Nevada residents.
Wynn Las Vegas built and opened the Lighthouse Lab COVID-19 testing facility, a 3,000-square-foot facility at the resort staffed by medical professionals from Lighthouse Lab Services who administer up to 7,000 PCR tests per day, helping usher the return of convention business and group events.
Globally, per the Report, Wynn Resorts donated $23 million USD in funds and in-kind donations to charities in 2020, which included $4.75 million in direct COVID-19 relief efforts, almost $1 million in food and meals, and over 2.5 million pieces of personal protective equipment to recipients like the Nevada National Guard and the Macau Government. In addition, Wynn Resorts global workforce volunteered over 34,000 hours of time in 2020.
The Wynn Resorts Human Rights Policy was broadened in 2020 to include specific expectations and core principles for diversity, inclusion, and non-discrimination. In addition, the Wynn Resorts Diversity Council drafted the first Wynn Resorts DEI Policy to codify goals that foster a culture of inclusion, embrace a diverse workforce, and develop vendor partnerships that create a fair and equal economy.
According to the company, extensive training and security procedures were enhanced in 2020 to combat human trafficking and commercial sexual exploitation, including the development of a company-wide training program for trafficking awareness that will be mandatory for all employees.
The Wynn Resorts ESG Report presents information that references select Global Reporting Initiative (GRI) Standards and Sustainability Accounting Board Standards (SASB).
Triple Bottom Line – Wynn’s public announcement of their Sustainability Goals is a big step and will likely put pressure on their competitors to make similar announcements regarding their plans. Time will tell. Care to take a bet on this front?
Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on Sustainability and ESG planning and initiatives within their own space. We would be happy to discussion your proposed project with you. For more information, or if you have any questions about this post, please contact Brad A. Molotsky, Nanette Heide, Darrick Mix, Jolie-Anne S. Ansley, David Amerikaner, Adam Berger, Frank DiGiacomo, Vijay Bange, Stephen Nichol, or the attorney in the firm with whom you are regularly in contact.