TC4: ESG-Specific Requirements in Lease Contracts (Green Leases) – Above Green

Intent

This indicator describes the strategies to promote ESG performance through lease contracts. The content of lease contracts is the starting point for the relationship between the landlord and the tenant, and defines both parties’ respective rights and duties.

Requirements

Select yes or no. If yes, select all applicable sub-options.

Does the entity include ESG-specific requirements in its standard lease contracts?

Yes
- Select all topics included (multiple answers possible)
  - Cooperation and works
    - Environmental initiatives
    - Enabling upgrade works
    - ESG management collaboration
    - Premises design for performance
    - Managing waste from works
    - Social initiatives
    - Other: ____________
  - Management and consumption
    - Energy management
    - Water management
    - Waste management
    - Indoor environmental quality management
    - Sustainable procurement
    - Sustainable utilities
    - Sustainable transport
    - Sustainable cleaning
    - Other: ____________
  - Reporting and standards
    - Information sharing
    - Performance rating
    - Design/development rating
    - Performance standards
    - Metering
    - Comfort
    - Other: ____________
    - Percentage lease contracts with an ESG clause (by floor area)
      
      ________________________
No

Validation

Other:

Other: State the cooperation and works requirement.
Other: State the management and consumption requirement.
Other: State the reporting and standards requirement.

It is possible to report multiple other answers.

See Appendix 2a for additional information about GRESB Validation.

Scoring

1.5 points, E

Scoring is based on the number of selected options. It is not necessary to select all options to achieve the maximum score.

Other: The 'Other' answer is manually validated and points are contingent on the validation decision.

See the Scoring Document for additional information on scoring.

Terminology

Comfort: Clauses can relate to cooperation between the parties to achieve comfort, including complaints monitoring, and programming of the building management system to maximise efficient supply of air-conditioning.

Design/Development ratings: Encourage, facilitate or require the parties to commit to / not interfere with a design/development rating of the premises or building. Clauses can relate to achievement or maintenance of a rating, cooperating with the other party to assist them in obtaining a rating or in achieving a higher than previously achieved rating, sharing rating certificates when achieved or as requested, etc.

Design for performance: A design approach based on measurable performance outcomes to ensure projects meet their design intent and minimize the performance gap.

Enabling upgrade works: Encouraging, facilitating or requiring the parties to upgrade the building or premises to improve the efficiency or environmental performance of the building during the term. Clauses can relate to cooperation between the parties to facilitate the carrying out of works designed to improve the efficiency or environmental sustainability of the building.

Energy management: Clauses can relate to installation of metering equipment to measure energy consumption, programs to reduce the consumption of energy, including education of employees, sharing of energy consumption data between the parties, allowing a party to read the other’s energy meters, installation of energy efficient products, etc.

Environmental Initiatives: Any type of initiative relating to environmental sustainability, such as recycling, green cleaning or land use ecology.

ESG clause: A particular and separate article or element as part of a contract that is directly related to ESG

ESG management collaboration: The lease must require one or both parties to appoint a representative responsible for sharing the ESG-related information.

Information sharing: Encourage, facilitate or require information sharing, related to energy or water consumption, production of waste or greenhouse gases, recycling rates, etc. Clauses can relate to providing the landlord access to the tenant’s meter, or to monthly automated reports being sent to both parties.

Managing waste from works: Clauses can relate to the landlord accepting a make-good payment in lieu of reinstatement works, the monitoring/minimisation of waste from works, enabling fitout to be reused, recycled, repurposed, or redirected from landfill, etc.

Performance rating: Clauses can relate to achievement or maintenance of a rating, cooperating with the other party to assist them in obtaining a rating or in achieving a higher than previously achieved rating, sharing rating certificates when achieved or as requested, etc.

Performance standards: Clauses can relate to works and maintenance contractors being required to adhere to waste programs, or not to interfere with building performance.

Social initiatives: Encourage, facilitate or require initiatives that are designed to improve the wellbeing of the premises’/buildings' surrounding communities. Initiatives can relate to provision of healthy food, commitments to gender equity or diversity, health and safety or above-award pay for building management, responsible use of ground level and surrounding public space that results in enhancement of the surrounding community, etc.

Standard lease contract: Standard lease format that is used by the entity as the basis for negotiations between landlord and tenant.

Sustainable cleaning: Clauses can relate to cleaners being required to use environmentally friendly cleaning products, adhering to the building’s waste strategy, etc.

Sustainable procurement: Encourage, facilitate or require the reduction of consumption of goods within the building or premises and/or the sourcing of sustainable or ethical goods. Clauses can relate to reduction of paper consumption, supply of biodegradable materials, use of recycled paper, building materials, etc.

Sustainable transport: Clauses can relate to preparation of an alternative transport report, sharing of information relating to public transport, environmentally low impact transport, end of trip facilities, bicycle racks, car share services, etc.

Sustainable utilities: Encourage, facilitate or require the parties to discuss procurement of more sustainable utilities/offsets, or install plant and equipment to enable the generation and on-sale of sustainable utilities. Clauses can relate to on-sale of electricity, gas or water, on-sale of certified renewable sources of a utility, installation of renewable energy plant and equipment, installation of recycled water facilities, etc.

Waste management: Issues associated with hazardous and non-hazardous waste generation, reuse, recycling, composting, recovery, incineration, landfill and on-site storage.

Water management: Clauses could relate to installation of metering equipment to measure water consumption, sharing of water consumption data between the parties, allowing a party to read the other’s water meters, installation of water efficient products, etc.

References

Better Building Partnership

Leasing Lifecycle Tool

Green Lease Library and Green Lease Leaders Recognition Program

SASB-Real Estate Owners, Developers & Investment Trusts, March 2016: IF0402-10