News – November 2020

UNDERSTANDING GREEN LEASES


Robert Harrow, Founder Director of Footprint Zero
Posted: 11 November 2020

A recent Knight Frank article explains how critical energy efficiency is for the future of UK commercial property

Government policies are forcing developers, landlords and occupiers to re-focus upon energy efficiency and sustainability throughout the whole life cycle of a building.

The Minimum Energy Efficiency Standards (MEES) prohibits the letting of a building if its EPC rating is below an E. One often overlooked area of impact of MEES is whether a lease sufficiently reflects the changed legislative environment.

What is a Green Lease?

A ‘green lease’ is a lease that incorporates clauses whereby the owner and the occupier undertake specific responsibilities/obligations with regards to the sustainable operation/occupation of a property, for example: energy efficiency measures, waste reduction/management and water efficiency.

The incorporation of green clauses is not limited to new leases. Where a lease is already in place, the parties can enter into a Memorandum of Understanding (MoU) which provides a roadmap for co-operation between the parties on improving the environmental performance of the property.

Why ‘go green’?

There are a number of reasons why landlords and tenants may want to enter into a green lease, including:

To achieve greater energy and resource efficiency to reduce costs
To comply with corporate social responsibility (CSR) policies
To comply with statutory requirements to report on environmental issues

The continued emergence of government legislation on sustainability issues is forcing businesses to re-evaluate the way they operate from properties they either own or occupy.

The introduction of the MEES restriction on lettings of properties with poor EPC ratings means that there is an increased focus on energy performance. From April 2018, owners of F and G rated properties are prohibited from leasing them until active steps have been take to improve the EPC rating to a minimum of E.

Government data suggests that up to a fifth of the UK’s commercial buildings may become unlettable as a result. One effective way to avoid this is through the incorporation of green clauses that allow owners and occupiers to work more collaboratively to enable improvements and to clearly identify the roles and responsibilities of each.

 

 

SOURCE – Knight Frank 2020 Knight Frank

Posts

11.11.20 – Understanding Green Leases

01.11.20 – It’s RealZero – That’s Our Target

IT’S REALZERO – THAT’S OUR TARGET


Says Tim Purbrick, Consultant Footprint Zero
Posted: 1 November 2020

NetZero carbon emissions imply that action in one place offsets inaction in another and that this is acceptable. As worthy as some carbon emission offsetting activities are, they ‘permit’ continued carbon emission, which means that the emitters continue to fail to address, or address more slowly, their RealZero issues.

Carbon emission offsets are pretty much anything that you can do in one place, which balances out the emissions that you continue to make in another. If you search the interweb, examples include reforestation, providing clean water, more efficient cooking stoves and even building renewable electricity plants in other parts of the world.

We can all agree that many of these offsets, in any part of the world, are a good thing. But, for a company in another part of the world to claim their offset activity elsewhere means that it is OK for them to continue to pump carbon into the atmosphere, while claiming Environmental, Social and Governance (ESG) kudos with their investors, their staff, their supply chain and their consumers, is a greenwashing hoax.

Companies could, and should, continue to deliver all their useful carbon ‘offsetting’ or reduction and soaking-up activity, without claiming it as offsetting, while addressing the real crisis that is the source of their continued emissions.

It is RealZero, not NetZero, that is our target.

RealZero means no carbon emissions. It must be our target if we are to stop and even reverse the continuing build-up of carbon in the world’s atmosphere, the most significant contributor to the climate change which threatens our way of life and even existence.

One route to RealZero today is solar PV on your commercial roofs. There are 250,000ha of south facing commercial roofs in the UK…. and only 5% have solar PV on them! Roof mounted solar PV provides an immediate and on-going reduction in CO2 emissions; it delivers on-site green energy security, a real and direct contribution to your ESG and to the Government’s carbon emissions reduction targets; an improvement to your buildings’ EPC; and an uplift in their capital value. A fully funded solar PV roof means that all these benefits can be acquired free of capital and operational expenditure and without requiring management time along with cheaper electricity than you are paying for electricity now with a fixed inflation rate, less than then Energy Price Index.

Start your RealZero journey today and let us help you get to Footprint Zero.