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Green Leases

Green leasing is one tool that can help reduce greenhouse gas emissions, save energy and lower costs.

Green Leases

Building owners and managers are increasingly looking for ways to build, renovate or operate their buildings in the most energy-efficient and environmentally friendly manner. Green leasing is one tool that can help reduce greenhouse gas emissions, save energy and lower costs.

What is a Green Lease?

A "green lease" is a lease for space that incorporates requirements to improve the energy and environmental performance of a building. These commonly include provisions for both the building owner and the tenant to, for example, reduce energy use through efficient energy management practices or increase the rate of recycling or composting, which can cut waste and greenhouse gas emissions.

One common approach is to establish targets and benchmarks for performance by both the building owner and the tenant, together with incentives such as decreased rent when those benchmarks have been met by the parties.

Benefits of a Green Lease

From a building owner or manager's perspective, green leasing helps to maximize the return on investment from a particular building. Research suggests that taking measures to reduce energy use, save water or cut waste can lower operating costs and attract a significant premium when a building is being sold.

From a tenant's perspective, green leases offer financial incentives, including the possibility of reduced rent as a result of increased energy efficiency, lower water use or waste reduction. In addition to the financial benefits that can be gained from operating under a green lease, there can be positive impacts on a business' overall brand and public image, and the ability to attract new employees or new business opportunities.

Get Started

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The Real Property Association of Canada (REALpac): Canada's national industry association for owners and managers of investment real estate has developed a guide for owners and tenants to consider this arrangement.

In this section

Codes, Standards, and Certifications
Building Envelope
Heating, Ventilation and Air Conditioning
Green Leases