What is ESG?
ESG is a set of standards used to measure the sustainability of an organization regarding environmental, social, and governance initiatives.
Environmental reflects how a company’s operations affect natural resources and climate change:
Includes use of renewable energy sources, waste management programs, product packaging, raw material sourcing, biodiversity practices on company-owned land, and potential operations-related air and water pollution issues.
Social considers the effects of a company’s behavior regarding social issues:
Includes equitable employee compensation and benefits, employee-management engagement, employee turnover, workplace policies, ethical suppliers/vendors, and charitable contributions.
Governance examines how its executives and board of directors manage a company:
Includes financial reporting transparency, executive compensation, stockholder engagement, avoidance of conflicts of interests, diversity of executives and board of directors.
The tremendous growth of ESG is due to increasingly socially conscious employees, tenants, and tenant customers demonstrating their commitment to making the world a better place while aligning the use of their time, money, and talents with their values. In addition, as the circle of accountability expands beyond local and federal governments to include corporations, businesses are consciously taking additional and measurable steps to protect the environment, improve working conditions, and close pay disparities where they exist. ESG was initially publicly espoused by large global companies but is being embraced more by private and publicly traded companies of all sizes.
Integrating ESG Into Your Business
Commercial buildings consume 35 percent of all electricity in the U.S. and generate 16 percent of all U.S. carbon dioxide emissions1, providing an excellent opportunity to reduce energy use in those spaces and demonstrate a commitment to environmental issues.
While comprehensive ESG strategies should be thoughtful and include initiatives across all three pillars, a few simple yet impactful measures – LED conversion programs, indoor air quality (IAQ) improvements, and EV charging stations - can be implemented quickly. US LED manages LED conversion programs in support of these types of energy conservation and sustainability measures, allowing property owners to meet their ESG goals and tenant and consumer expectations right away. Additionally, there is financial assistance and alternative funding for LED lighting projects.
Property owners can lower energy and operational costs while meeting sustainability efforts by converting existing lighting systems to the most updated LED lighting technology. For example, converting from fluorescent and other inefficient incumbent lighting technologies or less efficient earlier generations of LED lighting, can provide:
Lower Energy Costs
LED technology uses up to 75 percent less electricity than incandescent and fluorescent options, resulting in substantial energy savings, especially in areas utilized for extended periods.
Lower Operational Costs
US LED lighting solutions are engineered for high quality and longevity, approaching or exceeding 200,000 hours L70 lifetimes, substantially reducing lighting maintenance needs for decades in most applications.
Environmentally Friendly LED Materials
LED lighting products are composed of non-toxic, recyclable components, effectively eliminating the old disposal programs associated with legacy technologies like CFLs, metal halide, and fluorescents that have mercury. In addition to the growing number of LED recycling programs, the lighting industry is improving the end-of-life cycle of LED light bulbs.
Reduced Carbon Footprint
LEDs consume less power than traditional halogen, mercury vapor, metal halide, and fluorescent light sources. When quantified using the EPA calculator2, reducing greenhouse and carbon dioxide emissions using LED lighting is substantial. For example, one retailer converted over 8,000 locations to LED lighting and saved 226 million kWh/year. As a result, 353,097,297 lbs. of CO2 equivalent were reduced. That’s the same as removing 34,510 gas-powered vehicles from the road and saving 189,542 acres of U.S. forests.
Employee and Customer Well-Being
A well-lit business increases productivity and helps employees and customers feel safer in parking areas by discouraging criminal activity and reducing vandalism and accidents.
Alternative Funding Sources
Most LED installations realize a beneficial return on investment (ROI) with paybacks of three years or less. Utilities and state programs offer rebates and incentives to encourage LED lighting use. In addition, Lighting as a Service (LaaS), a model used to implement energy-efficient lighting projects without upfront capital, has gained traction. This scenario allows the end-user to install new LED lighting and maintain it with only a monthly service agreement as payment over the program's life.
The energy and operational savings, reduced carbon dioxide emissions, and available alternative funding make LED retrofits a logical component of an effective ESG strategy for property owners or Real Estate Investment Trusts (REITs).
Thanks to our early history in LED lighting, US LED has decades of engineering expertise to offer innovative LED luminaires and lamps for every commercial and industrial business. In addition, US LED provides value-added services that support these types of projects, including on-site lighting audits, photometric studies, turnkey installation, and rebate management. Since we control the quality process and engineer and assemble products in Houston, we can offer our industry-leading Ten-Year Warranty to give the buyer confidence that their lighting will exceed safety and energy efficiency standards decades from now.
Leading The Charge
Providing electric vehicle (EV) charging infrastructure on your property can also play a significant role in your property’s environmental impact. The installation of EV charging stations:
Reduces carbon footprint
Attracts customers/employees and builds loyalty
Provides financial incentives
EV charging stations can build brand loyalty and demonstrate a commitment to non-polluting technology alternatives. These responsible choices can also yield healthy returns for property owners and shareholders.
The latest generation of investors and consumers are justifiably concerned about the future. They expect companies to make a meaningful impact on environmental, social, and governance issues. So, it makes sense that companies of all sizes throughout multiple industries have adopted new business strategies that support ESG. LED lighting, IAQ, and EV charger installations are simple and cost-effective projects that demonstrate a commitment to a triple bottom line philosophy: promoting environmental conservation, supporting the wellbeing of employees, and saving money on energy management.