Transactional Agents Toolkit

CSR

CSR

It is becoming increasingly common for companies, particularly major corporates, to publish Corporate Social Responsibility (CSR) statements and policies. These set out their approach to environmental and social issues that are material to their business.

While there is currently no legal requirement for CSR reporting, the trend is upwards, with 45% of S&P 500 companies publishing annual reports. Companies with CSR policies will normally have targets for reducing their negative environmental and social impacts and will collect data on, for example, their consumption of energy and water and their generation of waste. Companies that have CSR policies and report on their performance are likely to be interested in the environmental credentials of the building(s) they own and/or occupy. A building’s ability to support an organisation’s CSR policies can give it an advantage over a similar but less sustainable building for this type of tenant.

Key issues to consider:

Does your client have a CSR policy and could it impact on building choice?
Can the building support your client’s CSR policy?
Is the building owner willing to engage and work together on environmental matters (e.g. through a Green lease or similar?)

Parties Involved

CSR Policies

A CSR policy sets out a company’s approach to managing the negative environmental and social impacts of its operations and to generate positive social and environmental outcomes. It will normally include data on energy and water use, CO2 emissions, waste generation and key supply chain issues. Organisations may have specific requirements within their CSR policy relating to the purchase or letting of a building e.g. NABERS or Green Star rating

Information & Actions

CSR Policies

What are they?
A CSR policy sets out a company’s approach to managing the negative environmental and social impacts of its operations and to generate positive social and environmental outcomes. It will normally include data on energy and water use, CO2 emissions, waste generation and key supply chain issues. Organisations may have specific requirements within their CSR policy relating to the purchase or letting of a building e.g. NABERS or Green Star rating

Why are they useful?
A CSR policy statement establishes a company’s position on sustainability issues and enables agents and other suppliers to understand what its priorities in this area are. Demonstrating awareness of a company’s CSR policy, and how their expertise may support this, provides an agent with an important advantage.

Issues to be aware of
Tenants with strong CSR policies may have difficulty finding space that suits all their requirements from an environmental / sustainability perspective. This issue can be overcome if agents and owners understand how a building can be upgraded or retrofitted to higher standards and how it can be operated efficiently by or for the tenant.

Applicable buildings
All building types.

Questions to ask

Does the owner / tenant have a CSR policy and / or sustainability and environmental targets that will impact upon building selection and its operational performance?

More information
References required

Green Leases

A green lease is a standard form lease with additional clauses included which provide for the management and improvement of the environmental aspects of a building by both owner and tenant. These clauses often relate to the sharing of utility consumption data, protecting the energy performance rating of the building and general cooperation on environmental matters. Owners, occupants and their legal advisors may see the introduction of environmental clauses in a lease as slowing down the negotiation process, but they should be seen as a clear benefit rather than a burden.

Information & Actions

Green Leases

What are they?
A green lease is a standard form lease with additional clauses included which provide for the management and improvement of the environmental aspects of a building by both owner and tenant. These clauses often relate to the sharing of utility consumption data, protecting the energy performance rating of the building and general cooperation on environmental matters. Owners, occupants and their legal advisors may see the introduction of environmental clauses in a lease as slowing down the negotiation process, but they should be seen as a clear benefit rather than a burden.

Why are they useful?
A green lease demonstrates a strong environmental commitment and enables cooperation between owner and occupants, which will in turn support the CSR obligations and corporate reporting requirements of each party. Obligations can protect the energy performance rating of a building by restricting alterations that might be detrimental.

Issues to be aware of
Owners, tenants and their legal advisors can be reluctant to agree to the inclusion of environmental clauses in a lease, even though such provisions are normally of benefit to both owner and tenant. Tenants may be concerned that the building owner will be able to use the environmental clauses as a way of improving a building at their expense, but appropriately worded clauses should allay any fears.

Applicable buildings
All building types.

Questions to ask

Is either the owner or tenant offering / expecting to include environmental clauses in the lease?
If not, how will the owner be working with the tenant to ensure the environmental performance of the building is satisfactory?

More information
Green Lease material from DRET

Building Environmental Management Groups

A Building Environmental Management Group is a forum that comprises the building owner, tenants and building management specifically established to review and improve the environmental and operational performance of a building. It is an effective way of addressing obligations agreed within a green lease.

Information & Actions

Building Environmental Management Groups

What are they?
A Building Environmental Management Group is a forum that comprises the building owner, tenants and building management specifically established to review and improve the environmental and operational performance of a building. It is an effective way of addressing obligations agreed within a green lease.

Why are they useful?
A Building Environmental Management group can lead to improved communication between the owner and tenants on a range of issues beyond those which are environmental and sustainability related. This communication is likely to highlight building inefficiencies, improve performance and result in significant financial savings for both parties.

Issues to be aware of
Tenant engagement can be difficult, depending on their level of interest in environmental matters, but benefits can be significant.

Applicable buildings
All building types but particularly useful for multi-let offices.

Questions to ask

Is there a Building Environmental Management Group in place or planned and if so what are the details?
What arrangements are in place to enable the owner and tenant to communicate on environmental issues such as policy, regulation and data sharing?

More information
Green lease materials from DRET

Building Rules

Building Rules are a set of requirements made by the owner with regards their activities in the building and most specifically in relation to and works they may undertake within their tenancy with respect to fit-outs and services modifications.

Information & Actions

Building Rules

What are they?
Building Rules are a set of requirements made by the owner with regards their activities in the building and most specifically in relation to and works they may undertake within their tenancy with respect to fit-outs and services modifications.

Why are they useful?
A well defined set of building rules can be used to deal with many of the major areas of tenant/owner interaction that can cause problems with building performance. By defining these Rules, the owner is ensuring that the ongoing performance of the building is not unreasonably compromised by tenant modifications.

Issues to be aware of
Most Building Rules don’t address issues that affect environmental performance particularly well. However it is possible to cover off many significant issues in a set of building rules such as:

Owner-review of all fit out works
Rules for connections to supplementary condenser water or supplementary chilled water networks
Design capacity for air-conditioning systems
Management of after-hours air-conditioning
Basic efficiency requirements for new works
Waste management from refurbishments
Use of low VOC paints, carpets and adhesives
Use of low formaldehyde wood products

Applicable buildings
All building types.

Questions to ask

Is there a set of Building Rules?
What provisions are in the building Rules in relation to the environmental performance of fit-outs and their interactions with the owner’s services?

More information
Low energy High rise Project