GREEN INITIATIVE
Green Lease Clauses & MoU's to Influence Tenant Attitudes and Behaviours
Wherever possible we attempt to have our tenants adopt a green clause or amendment to their lease which encourages improvements in environmental performance arising from their operation or use of a property.
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January 2023 |
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Topic Area: |
ESG |
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Service Line: |
Asset Management |
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ESG Inititative: |
Green Lease Clauses & MoU's |
Key Goals
Reduced electricity & gas consumption
Electricity purchasing from renewable sources
Lower water consumption and discharge
Decreased waste generation,
management & recycling
Typical Situation
In a triple net lease (NNN) situation it is often the case that the landlord has very little influence over the tenant's ESG activities in a property.
While large corporate groups are more often adopting their own ESG strategy, unfortunately the environmental footprint of their operating properties is too often either not considered a priority or is more often, simply not fully understood.
Hence we have a responsibility to educate our tenants as to how they can improve their ESG credentials, and the positive impact doing so can have on the environment, employee and customer wellbeing and their financial bottom line.
Planned Actions
By adopting a partnership approach and using industry group led reference toolkits for green leases, we strive to work together with our occupiers to reduce the environmental impact of our properties.
By helping our occupiers to agree carbon, energy, waste and water reduction strategies which best fit the circumstances of the specific property, we consult with our tenant to identify a practical step-plan for them to achieve positive changes which enhances sustainability.
Accordingly, we aim to either enter into a Memorandum of Understanding (MoU) with each tenant or to integrate (via an amendment to their existing lease or at the time of renewal), “green” clauses appropriate to prevailing circumstances.
Most often, this entails upgrades and or changes to building management systems (BMS) controls, where the tenant controls the hours of operation of heating, lighting and air conditioning services to the building.
Expected Benefits
Improvement in environmental performance usually includes reduction in, or improved efficiency of energy consumption with resultant energy cost savings for the tenant, reduction in generation and/or emission of greenhouse gases to contribute to a net zero carbon target by 2030; reduction in, or improved efficiency of water consumption or discharge, a reduction in waste generation which saves a tenant on disposal transportation costs and in many cases, a higher rate of waste recycling.
Target Green Initiatives
Green Lease Clauses
Green Initative
Energy Conservation
Green Initative
Waste Recycling
Green Initative
Case studies presented herein are for illustrative purposes only, and are select examples in order to illustrate how our ESG policies can be applied in practicality as it relates to our future portfolio investments. Nothing contained therein should be assumed to be an undertaking or commitment that all investments we make are suitable candidates for such ESG initiatives or that such improvements are even achievable in different circumstances. Certain information has been sourced from third parties and may be incorrect or incomplete.