Tenant and landlord alignment

Current situation

While buildings are currently responsible for 37 percent of global carbon emissions, 27 percent is from operational emissions that are largely attributable to the energy used by occupiers. This figure provides landlords with a challenge; occupier space is largely out of their day-to-day control but forms a major component of the scope three emissions they need to address as part of their net zero commitments.

In contrast, for many occupiers, which are also addressing their own net zero agenda, real estate forms a minor component of their overall emissions. Instead, they are more focused on reducing emissions from their own business operations, often centred on supply chain and manufacturing. 

There is a compelling case for far greater owner and occupier engagement in the common goal of decarbonisation. Owners and occupiers can find common ground with retrofitting and improving operational efficiencies based upon shared net zero goals, lowering high energy costs, improving mechanical and construction inefficiencies, and opportunities for rebates and financial incentives.

The issue of tenant/landlord alignment was selected as one of the first intervention points for the ULI C Change programme, which aims to find practical solutions to speed up and scale up decarbonisation. The intervention has the key objective to create deeper understanding of tenant issues and interests to uncover and develop solutions to improve tenant and landlord collaboration.

The programme has begun early insight work by engaging with occupiers through one-to-one interviews. This will be followed by a year-long community of practice between owners and occupiers to build trust and relationships, and develop resources and potential solutions for the two sides to work towards common goals on decarbonisation.