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| 22/05/2008 | GREEN LEASES: A PARTNERSHIP APPROACH TO SUSTAINABILITY |
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Retail property organisation BCSC has today (22 May) published a guidance paper to help explain the complexities of green leases and the role they can play in improving the environmental performance of buildings. The BCSC Occasional Paper sets out the key principles involved in the use of green leases and their practical implications for landlords and occupiers. Throughout the retail property industry there is now an increasing emphasis on sustainable practices across a range of activities including energy and water consumption, transportation, and waste management. Green leases bring a new factor to the equation by offering voluntary clauses as well as legally binding clauses in commercial contracts. This means that a green lease will cover the traditional rights and responsibilities of landlord and tenant as well as additional benchmarks that create a basis for monitoring and improving energy performance and sustainability practices. These may include fit-out requirements, responsibilities for repairs and services, monitoring and reporting energy consumption figures, service charges and operating costs amongst others. Green leases were first developed for government agencies by the Australian Department of the Environment and Water Resources and the Australian Government Solicitor and were rolled out to the private sector on a voluntary basis. These Green Lease Schedules (GLS) establish a legal mechanism for achieving energy efficiency targets in line with the Australian Building Greenhouse Rating (ABGR) and provide a support tool for achieving standards and preventing failure. Australian policy requires the GLS to be included, where feasible, in all leases exceeding two years for buildings over 2,000 sq m. Although no such standard exists in the UK, the EU Energy Performance of Buildings Directive on EPCs – effective from October 2008 – applies to the construction, sale and leasing of commercial buildings over 1,000 sq m. While green leases serve to set out the roles and responsibilities of both landlord and tenant, BCSC supports a partnership approach as a means to help guarantee the successful implementation of a green lease. Bringing together landlords, managing agents, tenants and energy consultants to set overall goals and to define individual roles makes standards easier to manage and achieve. For example, tenants can sign-up to an agreed level of energy consumption - which might cover lighting and air-conditioning use - during the fit-out stage. Selling the benefits of a green lease is also key to gaining buy-in from tenants and agents. Major benefits might include increased profitability resulting from lower costs, higher property values and improved operating conditions, enhanced corporate image, and effective compliance with new laws and regulations. Paul Cornes, Chair of BCSC’s Sustainability Taskforce comments: “There are many benefits of a green lease for landlords and tenants. Green leases ensure both landlord and tenant work in partnership to reduce occupational costs such as energy, waste and water for the benefit of both.” More information on how green leases work in practice and examples of where they have been successfully adopted by the retail property industry are available in the BCSC Occasional Paper, available for £15 to BCSC members and for £25 to non-members. Please contact Davinder Jhamat at BCSC on 0207 227 4480. |
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