10 reasons for a green lease

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Michael Jordan
Strategic Consulting

A “green lease” can mean many things, but it’s always a good thing to value energy and sustainability issues in lease negotiations—good for tenants, landlords and the environment. Here are 10 reasons why:

 

  1. Save money. A 2009 report from the U.S. Green Building Council (USGBC) found that commercial and residential buildings account for almost 40 percent of all energy consumed in the United States. Our clients have identified short-term utility spend savings of 3-13% from easy-to-implement measures built into their green leases. On the high end that could be more than $350,000 saved on a 1 million-square-foot lease.
  2. Strengthen the landlord-tenant relationship.  Both tenants and building managers have roles to play in creating a sustainable workplace. By establishing those roles from the start, a green lease avoids problems later on.
  3. Support your corporate sustainability objectives. The majority of U.S. companies on the S&P 500 Index and the Fortune 500 list now publish sustainability reports, according to a new study by the Governance & Accountability Institute (G&A). Many companies have set public carbon footprint reduction goals in their sustainability reports that can only be achieved with the help of common-sense energy measures in the buildings they own and the space they lease. Although they may have focused on owned space previously, more and more are coming around to their leased space.
  4. Enhance your corporate brand.  Companies set those carbon footprint goals for a reason: organizations such the Carbon Disclosure Project have more and more authority with the investment community. With a green lease program, your company will have better answers for CDP—so you’ll score better on green rankings.
  5. Demonstrate vision. There’s still time to be ahead of the curve in pursuing a strong green lease program. While companies look for ways to differentiate their sustainability profile, surprisingly few have established portfolio-wide green lease programs with measurable results. You could be the first in your industry.
  6. Show civic leadership. Since buildings account for more than half of most cities’ carbon footprint, cities have a big stake in improving energy efficiency in leased space. In fact, last year’s USGBC Annual Report found that 442 U.S. cities have adopted LEED and green building-based policies. Companies leading this trend are gaining influence as members of civic organizations like New York’s Green Lease Task Force and San Francisco’s Business Council on Climate Change.
  7. Get certified. LEED certification can show sustainability in new or existing buildings as well as in tenant spaces. A green lease will look at sustainability criteria in line with LEED CI (commercial interiors) standards, even if certification isn’t a near-term goal. With 125,000 projects currently participating in LEED that comprise more than 17 billion feet of commercial space, buildings are simply more competitive when LEED certified.
  8. Improve employee productivity.  Shoot, I buried the lead! A 2% improvement in productivity virtually covers your company’s occupancy cost.  Productivity is not always easy to measure, but the available evidence is overwhelming: employees work better longer with fewer sick days–and enjoy higher job satisfaction—when the work environment promotes health and well-being, uses natural light and enables common-sense conservation.
  9. Get cash for your trash. It won’t be a line item on your P&L, but some recycled material is worth money. Reducing waste can save on handling costs, offsetting the cost of a recycling program. Collecting data on waste can also improve reporting practices and results, as companies find they can achieve diversion rates over 80 percent.
  10. Help the environment. Wherever you believe we stand on the path of global environmental upheaval, everyone can agree to do the things we can easily and profitably do to reduce waste, maintain clean water and air supplies, and conserve resources for future generations. We are all ultimately tenants renting space on planet Earth—hopefully with an option to renew.

One thought on “10 reasons for a green lease

  1. Diana Davidson

    Hi Michael.
    Analysis of the composition of trash can help organisations
    to reduce waste costs by making better procurement decissions:
    1. Reducing waste by buying items in bulk.
    2. Specifying less bulky packaging.
    3. Reviewing business processes and systems so waste can be edited out.
    Often, these ideas provide significant commercial savings too.

    Reply

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