Government, Industry Leaders and Tenants Join Forces
The industry is listening. In 2014, IMT and the U.S. Department of Energy created the Green Lease Leaders program to encourage owners and tenants to align ESG objectives and commitments, and BOMA International serves as a supporting partner of the initiative. The program has enjoyed a 390% jump in enrolled companies, the organizations said, since its founding and has achieved more than 20% growth per year since the COVID-19 pandemic began.
Ron Becker, senior vice president of operations and sustainability for Brandywine Realty Trust, said he has noticed a green lease revolution during the last six to seven years, as tenants formulate their own ESG goals and demand as much or more from managers and owners.
“We can’t continue under an antiquated way of thinking, where occupants aren’t ‘allowed’ to touch the thermometer or turn off the lights,” he said. “It’s now a team-oriented game, where tenants have their own goals, and landlords can help them by working together to lower overhead. Similarly, landlords need to grow beyond, ‘If tenants get all the benefits, why would I do it?’ A tenant benefit of a 30% reduction can now be monetized on the rent side, and these realities have helped drive the effort.”
Interest Rising in High-Performing Buildings
Certifications such as LEED and Green Globes, an online green building rating and certification tool used primarily in Canada and the U.S., continue to play important roles, as widespread adoption indicates a strong market interest in high-performing buildings. Launched in 1994 by the U.S. Green Building Council, LEED (Leadership in Energy and Environmental Design) is a popular green-building certification program that measures buildings’ energy efficiency, carbon reduction, sustainability and other factors. Health and wellness as a component of the certifications has also played a much larger role in recent years, especially as the pandemic forced more focus on indoor air quality and airflow.
“Certifications help balance our priorities on both earth and occupant health,” Becker said. “Hanging those plaques in the lobby advertise our priorities every time someone walks into the building, and we’ve found real value in that; they know it’s a safe building. From a health and wellness perspective, a Fitwel certification is valuable for occupants, just as a LEED is for the planet.”
Another important change especially coming out of the pandemic and the social justice movement in the last few years—is that the general public expects businesses to do more. ESG investments are rising, particularly as millennials and younger generations put their money where their values are.
Comprehensive Efforts Needed to Create Change
“We asked real estate leaders, ‘What do you see as the future?’,” Lo said. “Their answers helped us create the BuildUp 2030 Framework for the Transformation of Real Estate, which reflects shared principles for healthy indoor air quality, community resilience to climate change, diversity within the real estate industry, and sustainability review of the supply chain. We need a holistic effort to create change, and many real estate leaders understand they play an important role.”
Becker pointed out that implementing policies and transforming buildings isn’t easy. “It’s a big lift, requiring partnerships with many constituents. You can’t turn a ship this big on a dime, but when you see what’s possible when everyone gets involved, it’s a solution worth pursuing,” he said. “We need to look beyond our buildings, too; the socioeconomic value of other aspects of decarbonization are ours to consider.”
High-speed rail, for example, can take thousands of commuter cars off the road, Becker noted, adding that companies can hire from a wider pool of workers if travel is made easier, and more workers can obtain better-paying jobs.
“We’re connected, and we need to conduct business holistically, instead of in siloed buildings,” he said.
ABOUT THE AUTHOR
Stephanie J. Oppenheimer, APR, is a writer and the founder and principal of Skylite Communications, an independent communications firm based in Falls Church, Virginia. She also is a former assistant vice president of communications for BOMA International.