The Flight to Net Zero: Tenants and Owners as Co-Pilots
Session Recap: Wednesday, Sept. 27, 2023
While not every portfolio is able to go net zero today, it is increasingly cost-effective for owners and tenants to mutually achieve net zero goals as new technologies and financing become available, ensuring that new regulations will not make buildings functionally obsolete.
Speakers Sara King, SVP of Sustainability at Kilroy Realty, Allison Kirby, Associate Director of ESG at Cushman & Wakefield, and Ben Myers, SVP of Sustainability for BXP Boston Properties, shared their insights in the session The Flight to Net Zero: Tenants and Owners as Co-Pilots.
The session examined the flight to zero with building owners and tenants working together as co-pilots to overcome the split incentive challenge via data sharing, zero net leasing, coordinated fit-outs, behavior modifications, and balancing the remaining emissions with offsite renewables and offsets.
Green leasing was one of the main topics covered as it pertains to existing and new tenants, as well as ways to help start or remain on the path to net zero. Strategies mentioned include:
- Data sharing – if data is noted in the lease, it allows for an open flow of communication between the building performance and tenants (preferably on a monthly basis). Also, ensuring that brokers and engineers break habits of excluding sustainability metrics in planning processes
- Submetering – common in many net zero buildings, will measure energy consumption in lighting panels (0.55 watts per sq foot in the lease is recommended)
- Green premium – many tenants are willing to pay more to achieve net zero and could be an opportunity to charge more, with the justification that it will offset their monthly energy bills
- Consistency – tenants may already have green lease language, so it’s up to owners to make sure that the language is consistent and you aren’t coming at it from different angles
- Set standards in the lease – make sure there are standards that outline what’s allowed (ex. 8 kilowatts per sq foot), and if they go over the required amount, they are subject to fines
- Behavior changes – create actionable incentives for tenants with communication and resources that allow them to take action on a regular basis.
Strategies were discussed for incorporating renewable energy and how to strengthen the net zero planning and goal setting, including:
- Aim for 6 megawatts across solar. Sometimes, they are hidden but will allow signage in the building lobby and other areas to let tenants know that solar is offered and recommended.
- Condense the sustainability report on how the building is operating on a carbon-neutral basis.
- Leverage regulatory support with utility for the net meter bill (cost per kilowatt, submeter usage, etc.)
- Green tariffs are a strong option through a supplier utility if available
- As we don’t fully know which tenants are buying green power, communication bi-directionally is important to make sure we can support sustainable energy for each tenant, having the client fill any gaps
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