As stated above, there are a number of paths to decarbonization. Kokernak enumerated a handful of them–improving HVAC systems, windows and “anything on site that will improve the energy efficiency of your building.” This also includes avoiding embedded carbon in building materials and their transportation. Onsite renewables, such as solar photovoltaic panels on the roof, are certainly key, as is grid interactivity, which means “working with utilities to focus on demand response.” And certainly, taking advantage of offsite renewables when possible and getting renewable energy credits all fit into the net-zero strategy.
Last, but integral to the discussion, is tenant alignment. This is an all-hands-on-deck approach, focusing, she said, on “how building owners can work with tenants on that journey to net-zero.
“The biggest challenge here is split incentives,” said Kokernak. Most lease structures disincentivize one party from investing in sustainability upgrades. “Oftentimes, the party that pays upfront for the cost of those efficiency improvements is not always the one who benefits from future energy savings.” For instance, a tenant paying for programmable thermostats may not be paying a lower cost because the lease agreement specifies a set rate.
One solution is the green lease. “Green leases might sound simple,” said Saunders, “but there’s no one-size-fits-all solution. It’s all about what works for your company and what you’re trying to achieve. There’s a lot of work we have to do to get green leasing integrated,” and many stakeholders to engage. “We have to do a lot of work with multiple parties–our legal team, our asset management team, and certainly with my team to ensure best practices are in place to achieve our goals.”
As just one example of a green lease clause, Duffy cited charging tenants for additional HVAC hours, which helps lower energy consumption–and ultimately costs–for all concerned. It should be noted that, in her experience, much of the push for green leases is actually coming from the tenants.
Ultimately, no matter the specific path to net zero an owner or manager chooses, the panelists agreed that tenant engagement can be the toughest row to hoe. “Tenants and owners must work together to achieve net zero,” said Saunders.
“But it’s difficult to make someone care about sustainability,” added Duffy. Two solutions arose: Find a sustainability champion within the organization and communicate goals and progress every step of the way.
About the Author
John Salustri is editor-in-chief of Salustri Content Solutions, a national editorial advisory firm based in East Northport, New York. He is best known as the founding editor of GlobeSt.com. Prior to launching GlobeSt.com, Salustri was editor of Real Estate Forum.