Green Leases: How to Achieve Cost Savings and Sustainability Goals
This webinar will present how innovative Green Leases can create win-win agreements for building owners and business tenants to benefit from environmentally friendly upgrades and behaviours. Green leases balance costs and benefits of investments in sustainability to ensure both parties get the savings back based on their investment while taking action on climate change.
Important topics that will be discussed include;
- The problems with gross and triple net leases
- How to negotiate a green lease with your landlord
- How to engage staff to save $$ and build a culture of sustainability
- Assess if a green lease is right for your business
Michael is the Chief Executive Officer of REALPAC, the senior Canadian trade association for large public, private and institutional investment real estate companies. He has represented the Canadian Real Estate industry in all major policy initiatives with governments at all three levels, including property tax reform, securities legislation, income tax issues, sustainability and ESG, land use planning and regulation, and many other issues since 1997. Michael is also the Author and Editor of the Canadian textbook "Canadian Commercial Real Estate: Theory, Practice, Strategy."
Emily Nield is an integral member of the Sustainability Department at Epic Investment Services, where she works as the manager of ESG & Sustainability. Emily started her career as a planetary geologist, where she studied the surface of planets and moons in our solar system. During her tenure with NASA, she could no longer ignore the problems on Earth and decided to switch careers and focus on sustainability. Emily achieved her MBA from the Schulich School of Business, where she specialized in sustainability and has been with Epic since 2019.
York Region Commercial Buildings Need to Bridge Energy Performance Gap
When it comes to energy efficiency and greenhouse gas (GHG) reductions, commercial buildings in York Region are underperforming their provincial counterparts, 2019 benchmarking data released in 2020 from the Ontario Ministry of Energy Northern Development and Mines has revealed. Businesses in commercial buildings have a role to play in overturning this lacklustre performance by taking action on climate change, and in turn, they can save money.
In 2018, the Ontario government launched the first mandatory commercial building energy benchmarking program in Canada. Tagged 'Energy and Water Reporting and Benchmarking" (EWRB), the program requires commercial buildings over 50,000 sqft to report their energy and water consumption annually. The program is a realization of the adage, "you can't manage what you don't measure." By measuring energy consumption and benchmarking with comparable buildings, commercial building owners and their tenants can evaluate their building space energy performance.
There are many benefits to energy benchmarking; top amongst these are saving operational costs by emulating best-in-class buildings and taking action on climate change from the resulting GHG reductions. Research by the US Environmental Protection Agency on energy benchmarking programs proves that up to a 2 – 7% savings in operational costs can be achieved just by measuring your energy performance.
According to The Atmospheric Fund, buildings account for 43% of York Region's GHG emissions. Early EWRB results suggest that York Region commercial buildings are not performing well when benchmarked against provincial energy performance data. Reducing GHG emissions in buildings is significant in reaching Canada's net-zero by 2050 commitment.
The interactive dashboard provides an overview of how York Region commercial buildings benchmarked for a selected group of building types. York Region buildings underperformed by an average of 15% (all types) and as high as 65% for the office building type. The sample is small for York Region, 77 buildings as compared to 805 provincially. Nonetheless, the indicators are not encouraging – we need to do better. A national comparison is also provided in the dashboard.
The 54,000 businesses in York Region are predominantly located in leased premises. They are business tenants in commercial buildings. While many commercial real estate firms have tenant engagement programs, a large percentage do not. And what does exist is often constrained by lease arrangements. In gross or triple net leases, the allocation of the benefits and the costs of energy reductions act as a disincentive to action in that capital cost incurred are mis- aligned to how the operational savings are allocated.
What is the solution? Since business owner activities in these buildings account for up to 80% of energy use, it is business owners in the building who need to take action. After all, customer-facing and B2B businesses have the most to gain in telling their customers, suppliers, and employees about their commitment to going green and taking action on climate change.
Business owners need to understand how their space contributes to GHG emissions. They need to inform themselves about their options for
green leases. With a green lease, those who incur the capital costs also receive the benefits in operational savings.
As part of its mandate to help businesses and commercial building owners champion climate action by achieving net-zero emissions in their buildings, York Region’s, ClimateWise Business Network, launched a friendly competition, the ClimateWise Building Challenge.
York Region building owners and tenants can join the ClimateWise Building Challenge to take advantage of the free York Region-wide competition and services. Through the challenge, business owners can take advantage of the many resources provided by the energy efficiency experts at Windfall Ecology Centre to help measure your current GHG emissions and form a plan to reduce your emissions in collaboration with your building owner and business neighbours.
To learn more about the value of energy benchmarking to achieve energy efficiency, check out this resource on the website,
Successes in Sustainability: Landlords and Tenants Team Up to Improve Energy Efficiency.
Canadian Financial Institutions Take Action on Climate Change
Many of Canada's financial institutions are taking action on climate change; one of them is the Royal Bank of Canada (RBC), lending its voice to Canada's net-zero journey. In a research report tagged
The $2 Trillion Transition: Canada's Road to Net-Zero, RBC lays out six pathways while emphasizing the role buildings must play in reducing emissions. RBC is thinking big and acting locally towards fostering the nation's net-zero emissions ambition.
Forty-two locations of the bank in York Region are in negotiation to join the ClimateWise Building Challenge. An initiative of the ClimateWise Business Network, ClimateWise Building Challenge, supports local businesses to reduce greenhouse gas (GHG) emissions from their operations through a friendly building competition. Learn more about the challenge.