What is a green lease?
A green lease is a lease between the landlord and tenant that aims to minimise environmental impacts from use and operation of the building. It is different to conventional leases because it incorporates ecologically sustainable development (ESD) principles and establishes a dialogue between owner, managers and tenants for iterative improvements over time.
Why negotiate for environmental leases?
Leasing premises is a slow cycle of more than five years. Many sustainability and efficiency measures move much more quickly than this. Using sustainability principles in a lease provides a framework for both the landlord and tenant to iteratively improve energy efficiency, set sustainability goals and maintain their results. It provides clear documentation for what the two parties are seeking to achieve and the roles and responsibilities of both. It also introduces a form of accountability and, subject to mutual agreement, some real liability if targets are not met.
How to approach green leasing
Organisations can get the most of out a green lease when contemplating office relocation and negotiation with a new landlord, but they can also be entered by existing tenants. Green leases have five key elements:
- Target environmental measurement standards
- Energy management plan
- Mechanism for administering green leases, e.g. a building management committee
- Metering and data reporting
- Dispute resolution process
See the Sydney Better Buildings Partnership Leasing Lifecycle Tool for step-by-step assistance.
Green leases do not necessarily cost any more than regular leases. This type of leases may require behaviour changes from the tenants, which some can see as a cost. However, the positive outcomes of changes and the operational savings gained should outweigh any management costs and perceived inconvenience. For example, modifying set temperature controls give greater comfort, while adjusting equipment settings reduces waste and saves on electricity costs.
In the videos below, Esther Bailey, City Switch National Program Manager explains the benefits of green leases and Paul Bannister, Managing Director of Exergy, explains how these five elements fit together.