Green leases are a great way of aligning landlord and tenant sustainability goals, enabling collaboration on sustainability so the whole building performance and occupant experience can improve. A study undertaken by JLL in 2013 found that buildings with green leases were almost twice more likely to be high performing than buildings without. The performance improvement was often achieved through low or no cost initiatives resulting in an extremely cost effective way of boosting sustainability performance.
Green leases traditionally were focused primarily on energy but increasingly we are seeing green leases reflect a broader sustainability focus encompassing water, waste, health and wellbeing, and engagement. Such leases are becoming the new norm with 72% of global participants in the GRESB Real Estate Assessment in 2016 now incorporating sustainability provisions as part of their standard lease contracts. This year in Asia for the first time, more than half the respondents (54%) do the same… So if you don’t have a green lease currently, it is increasingly likely you will sometime soon.
What does this mean? In Asia, the most common sustainability provisions from the 2016 GRESB Assessment are the sharing of utility data, obligations to do nothing to adversely affect the environmental performance of the building and energy efficient and/or environmentally responsible specifications in tenant works. These provisions are also the most common at the global level along with the sharing of information to facilitate green building certification. Getting these fundamentals in place can also be done without a green lease and is a great way to transition to a lease with enhanced provisions around sustainability and performance.
Once a green lease has been negotiated, it needs to be implemented in order to have any effect, so it is great to see GRESB introduce a question to this effect in the 2016 assessment regarding monitoring of green lease compliance. To get the most out of a green lease, ongoing active management is required. This is often best achieved by translating the lease requirements into a practical and actionable plan. This plan also outlines the roles and responsibilities of those involved in the green lease, establishes the baseline and the measures required to improve performance. One of the best ways to enable the action plan is to have a building management committee comprised of key stakeholders who meet on a regular basis to review performance, discuss proposed improvement measures and ensure alignment of landlord and tenant strategies.
If you have a green lease case study, we’d love to hear from you…
For more information on green leases, visit the following websites: