ESG and Commercial Real Estate – Why is it Important?

At one time, Environment, Social and Governance (ESG) was described as an emerging trend in commercial real estate. It is now, however, well established as one of the chief factors in differentiating between properties.

Stakeholders in commercial real estate, from funders through to employees, are becoming increasingly motivated by ESG factors when engaging in property transactions and contracts of all kinds.

Why is ESG Important for Commercial Real Estate?

With energy costs increasing exponentially, prudent Landlords and Tenants are collectively becoming more focused on the energy efficiency of buildings. Buildings that use renewable alternatives such as solar or wind power can be more beneficial for all parties involved.

This, coupled with increasing energy reporting requirements, means that it would be short-sighted not to consider the impact on your ESG profile, when considering or reviewing your real estate needs and investments.

How Cleaver Fulton Rankin can help

The Commercial Real Estate, Construction and Procurement teams at Cleaver Fulton Rankin can offer assistance in negotiating some of the various considerations you, as an environmentally conscious client, may encounter. This might include:

• Discussing the opportunities and challenges of property management, including developing greener real estate.
• Future proofing leases in the transition towards net zero, including advising on the consequences of same and the potential capital expenditure requirements to be reflected in the drafting and negotiation of green and smart lease clauses.
• Making your real estate more attractive to investors from a sustainability perspective.
• Preparing your property for Minimum Energy Efficiency Standards (MEES) targets when they are introduced in NI, including advice on the retro-fitting of older property and other cleantech opportunities.
• Negotiating contractual obligations to deliver green building certification.

It is important to consider how your business can implement ESG strategies and targets to meet client demand, and ultimately develop a more sustainable business.

Should you wish to discuss anything mentioned in this article, please feel free to reach out to a member of our Commercial Real Estate team.

This article has been produced for general information purposes and further advice should be sought from a professional advisor.