The Green Agenda set to Influence Tenant Decisions
A myriad of freak weather events, flooding, droughts, fires and rising sea levels have all been beamed onto our TVs, highlighting the reality of global warming and climate change. In 2019, the recognition that the world is in the grips of a climate emergency increased and was thrust into the consciousness of everyday citizens. As such we expect that 2020 will see the wider green agenda influence real estate decision-making not just by property developers and landlords but by tenants also.
Since the discovery of damage to the world’s ozone layer in the 1980’s, climate change has been a prominent topic. Countries, corporates and people around the world have strived to wean themselves off a reliance on carbon, all at varying degrees of commitment and success. With global temperatures increasing at a greater rate, protests and activism ramped up in 2019. From occupying streets in major cities, to the walk-out of students in schools, the calls for action have grown louder. Businesses however large or small will find it more difficult to shy away from doing their bit, especially in the workplace.
Terms such as Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) are ways in which a company can clearly outline the steps it is taking to have a positive impact on its employees, clients and the environment. More importantly, reporting their progress against the set goals. Whether it is a simple case of improving recycling provision within an office or ensuring that power supplies are derived from renewable sources, small steps can be taken to make a big impact.
However, the increased scrutiny on this subject is likely to move the scale of contribution further up both an individual’s agenda and that of the business. Expectations from staff and clients to take not only bold steps but to prove it as well, will grow in importance. Reducing the corporate carbon footprint has until now been about achieving carbon neutrality, the urgency for change has shifted the dial, now it is about going carbon negative.
For several years, the real estate industry has made inroads into developing sustainable office buildings through use of new technology, materials and construction processes. This will continue as more and more developers ensure that their schemes adhere to tighter environmental regulations and seek to achieve accreditation such as BREEAM, LEED or SKA ratings. Whilst a blank canvas presented to tenants could well achieve its green credentials, a subsequent fit-out could negate them. The use of unsustainable materials and practices will go long way to undermining the base build. As a result, tenants will have a greater expectation that a fit-out will be sustainable and be environmentally responsible through design, construction and use. Fundamentally using less and less one-use materials.
The influence of the green agenda on tenant decision-making with regards to the workplace looks set to grow. Whether it is the initial choice of office building/workspace, the choice of design and build plans through to the type of paint used, a business’s commitment to the cause will manifest itself in many ways. Reducing the corporate impact on the environment will filter through the entire supply chain, the office should be seen as a facilitator to change rather than a contributor.