According to the UK Green Building Council, the built environment contributes around 40% of the UK’s total greenhouse gas emissions.
Together with the impact of the climate emergency and extreme weather events around the world and the fact that the UK government has set a legislative target to achieve Net Zero by 2050, sustainability in the built environment has never been more important.
It is understandably a hot topic, and most occupiers are stipulating certain green criteria as part of their commercial property specifications to meet their own Environmental, Social and Governance (ESG) requirements, not to mention landlords and lenders wishing to meet their own ESG goals in return.
Improving the sustainability of buildings can deliver significant benefits for landlords – from playing a role in protecting the planet, to delivering potential energy cost savings, all whilst enhancing tenant satisfaction. That is why the integration of sustainability is now at the forefront of commercial property asset management.
What role do property managers have in delivering sustainable commercial property?
Property managers have a crucial role to play in shaping sustainable commercial real estate and work closely with both landlord and tenant to ensure a mutually beneficial approach to sustainability of assets.
Your property management company should ensure that your building is complaint with the current EPC standards and work towards future proofing your assets with the zero net carbon by 2030 in mind.
And, when it comes to the introduction of new sustainability initiatives, there is no need, necessarily, to wait until the end of the lease – landlords and tenants can work collaboratively throughout.
To work together towards a more sustainable building, whilst demonstrating a commitment from property owners to the cause, it is becoming increasingly important for landlords to put in place green lease clauses or a green memorandum of understanding between parties.
What is a green lease or memorandum?
A green lease or memorandum requires a declaration of dedication by all parties to a lease to ensure that the building is managed and operated sustainably, with both sides working together towards the same goal.
The landlord and tenant commit to specific responsibilities and obligations to “minimise carbon emissions arising from the sustainable development, operation and occupation of a property”.
This can include everything from energy efficiency measures and EPC Ratings, data sharing on utilities consumption, waste reduction and recycling, to a commitment to improving overall energy efficiency through the meeting of certain statutory requirements such as MEES Regulations or BREEAM ratings.
To work towards these goals, property managers might work with both their landlord client and their tenants to install EV Charging points for example, or will work to reduce energy consumption through installation of more efficient appliances and M&E, or by moving to new renewable energy sources.
