Reducing CO2 in real estate industry with proptech

How to fight CO2 and other ecology problems with green leases?

The real estate industry accounts for over 33% of global GHG and CO2. How can green leases and going PropTech help property developers?

The real estate sector is a significant contributor to global carbon dioxide (CO2) emissions. According to the United Nations Environment Programme (UNEP), buildings account for about 33% of global greenhouse gas (GHG) emissions and 40% of global energy consumption.

The CO2 problem in real estate arises from several sources, including:

  1. Building energy consumption: Buildings consume a significant amount of energy, mainly for heating, cooling, and lighting. The energy used to power buildings comes mostly from fossil fuels, which generate large amounts of CO2 emissions.
  2. Building construction: The construction and demolition of buildings also generate significant amounts of CO2 emissions. The production of building materials, transportation, and on-site construction activities all contribute to the sector’s emissions.
  3. Building operation: The operation of buildings, including maintenance, cleaning, and waste management, also generates CO2 emissions. For example, the transportation of waste to landfills and the use of carbon-intensive cleaning products can contribute to the sector’s emissions.

To address the CO2 problem in real estate, there is a growing focus on implementing sustainable building practices, including

  • green leasing
  • energy-efficient building design
  • use of renewable energy sources.

These practices can help reduce energy consumption, decrease GHG emissions, and promote a more sustainable built environment.

In this article, we’ll focus on green leasing and how software and technology companies can help the real estate industry become more eco-friendly.

What is green leasing?

Green leasing is a type of lease agreement between a landlord and tenant that incorporates sustainability and energy-efficient practices into the building’s design, construction, and operation.

In a green lease, the landlord and tenant agree to work together to minimize the environmental impact of the building. The lease may include clauses that require the landlord to use environmentally friendly materials and energy-efficient systems during construction and renovation, while the tenant agrees to use the building in an environmentally responsible manner.

Green leases typically address issues such as energy consumption, water usage, waste management, and indoor air quality. The lease may also establish procedures for monitoring and reporting on sustainability performance.

By promoting sustainable practices, green leasing can help reduce the environmental footprint of buildings, lower operating costs, and improve tenant comfort and productivity. It can also provide financial benefits to both the landlord and tenant, such as reduced energy bills and increased property value.

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Do green leases work in Switzerland?

While the leaders in the interest for green leases are such countries as the Netherlands, USA, UK, Canada, and Australia, there is interest in other countries including Switzerland. There is growing interest in sustainable building practices and green leasing among Swiss landlords and tenants.

Switzerland has a strong commitment to environmental protection and sustainability, and the Swiss government has set ambitious goals for reducing greenhouse gas emissions and promoting sustainable development. As a result, many Swiss companies are looking for ways to reduce their environmental impact, including through the adoption of green leasing practices.

Several Swiss organizations and initiatives are promoting green leasing in the country. For example, the Swiss Green Economy Symposium is a platform for promoting sustainable business practices, including green leasing. The Swiss Energy Agency also provides information and support for companies looking to reduce their energy consumption and adopt sustainable building practices.

In addition, several Swiss real estate companies have already implemented green leasing practices in their buildings. For example, Swiss Prime Site, one of Switzerland’s largest real estate companies, has implemented a green lease concept that includes energy-efficient building operations and the use of sustainable materials.

While there may be some challenges to implementing green leasing in Switzerland, such as high construction costs and strict building codes, the country’s strong commitment to sustainability and innovative business practices make it a promising market for green leasing.

How does green lease work for a renter?

First, the lease agreement will typically include clauses that require the tenant to use the building in an environmentally responsible manner. This may include instructions on

  • how to properly dispose of waste,
  • use energy-efficient appliances and equipment,
  • and conserve water, etc.

Second, the green lease may specify that the landlord will provide the tenant with information on the building’s energy and water consumption, as well as other sustainability metrics. This information can help the tenant understand how their actions impact the building’s environmental performance and identify areas for improvement.

Third, the green lease may include provisions for the landlord and tenant to work together to identify opportunities to reduce the building’s environmental impact. For example, the lease may require the landlord to conduct regular energy audits and implement energy-saving measures, while the tenant may agree to use energy-efficient lighting and appliances.

Finally, the green lease may include provisions for the tenant to participate in sustainability initiatives or programs. For example, the tenant may be required to participate in a recycling program, use green cleaning products, or attend educational workshops on sustainability.

Advantages of green leases for real estate developers

While introducing green leases takes time for older buildings, it is recommended to develop new buildings and complexes with green leasing in mind. Why? Green leasing can offer several advantages to real estate developers, including:

  1. Reduced operating costs: Green leasing can help developers reduce operating costs by promoting energy and water efficiency, reducing waste generation and disposal costs, and improving the building’s overall performance. This can result in lower utility bills, reduced maintenance costs, and increased property value.
  2. Improved tenant satisfaction: Green leasing can help developers attract and retain tenants by providing a more sustainable and healthy living or working environment. This can lead to improved tenant satisfaction, lower vacancy rates, and increased lease renewals.
  3. Increased marketability: Green leasing can enhance the marketability of property by demonstrating the developer’s commitment to sustainability and environmental responsibility. This can help differentiate the property from others in the market and attract environmentally conscious tenants.
  4. Regulatory compliance: Green leasing can help developers comply with environmental regulations and sustainability standards. This can help avoid fines or penalties for non-compliance and mitigate potential reputational risks associated with non-compliance.
  5. Improved public relations: Green leasing can help improve the developer’s public image by demonstrating their commitment to sustainability and environmental responsibility. This can enhance the developer’s reputation and increase stakeholder engagement.

How can software help with the green leasing process?

At HUSPI, we have several real estate clients. This PropTech experience has helped us to gain expertise in this area from a technological standpoint. While we aren’t experts on how to build better buildings, we do know how to build software that would help with routine operations in real estate, including such features:

  1. Monitoring and reporting: Green leasing software can help landlords and tenants monitor and track sustainability metrics such as energy consumption, water usage, and waste generation. The software can also generate reports on these metrics, which can be used to identify areas for improvement and demonstrate progress over time.
  2. Benchmarking: Green leasing software can provide benchmarking data to compare the environmental performance of a building with similar buildings in the area. This can help landlords and tenants identify opportunities for improvement and set sustainability targets.
  3. Analysis: Green leasing software can analyze sustainability metrics and provide insights into areas where energy and resource use can be reduced. This can include identifying patterns in energy use, pinpointing equipment or systems that are using excessive amounts of energy, and recommending strategies for reducing waste and improving efficiency.
  4. Compliance: Green leasing software can help landlords and tenants ensure compliance with environmental regulations and sustainability standards. The software can track relevant regulations and requirements and provide alerts when actions need to be taken to remain compliant.
  5. Collaboration: Green leasing software can facilitate collaboration between landlords, tenants, and other stakeholders in the building. The software can provide a centralized platform for sharing information, communicating about sustainability initiatives, and coordinating efforts to improve the building’s environmental performance.

There are several tech companies that operate in the green leasing space. These companies typically offer software and services that help landlords and tenants implement and monitor sustainability measures in their buildings.

One such company is Measurabl, which provides a cloud-based platform for tracking and reporting on sustainability data. Measurabl’s platform can help landlords and tenants collect, analyze, and report on environmental metrics such as energy consumption, water usage, and greenhouse gas emissions.

Another company is WegoWise, which offers a software platform for tracking and analyzing building energy and water usage data. WegoWise’s platform can help landlords and tenants identify areas where energy and water usage can be reduced, and track progress over time.

Other notable companies in the green leasing space include Green Energy Management Services, which provides energy management and sustainability consulting services, and Yardi Energy, which offers a suite of energy management tools for property managers.

These companies and others like them are helping to drive the adoption of green leasing practices and promote sustainability in the built environment.

HUSPI can become your partner in developing software that would suit your needs in terms of document flow, communication, tracking information on convenient dashboards, and many other features.

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