How can you incentivize tenants to adopt sustainable practices in your real estate portfolio?

1 Why tenant sustainability matters

Tenant sustainability is the extent to which your tenants implement measures to reduce their environmental impact, such as energy efficiency, water conservation, waste management, green procurement and carbon footprint. Tenant sustainability matters for several reasons: it can lower your operating costs, improve your asset value, attract and retain quality tenants, reduce your regulatory and reputational risks, and contribute to your ESG reporting and ratings.

2 How to assess tenant sustainability

Before you can incentivize tenant sustainability, you need to assess the current status and potential of your tenants. You can use various tools and methods to do this, such as surveys, interviews, audits, benchmarking, ratings and certifications. For example, you can use the Global Real Estate Sustainability Benchmark (GRESB) to measure and compare the ESG performance of your tenants and your portfolio. You can also use the Leadership in Energy and Environmental Design (LEED) or the Building Research Establishment Environmental Assessment Method (BREEAM) to certify the sustainability of your tenants' spaces.

3 How to communicate tenant sustainability

Once you have assessed tenant sustainability, you need to communicate your expectations and goals to your tenants and engage them in a dialogue. You can use different channels and formats to do this, such as newsletters, webinars, workshops, events, awards and recognition programs. You can also use case studies, testimonials and best practices to showcase the benefits and achievements of tenant sustainability. The key is to create a culture of collaboration and trust between you and your tenants and to highlight the mutual value of sustainability.

5 How to monitor tenant sustainability

To ensure that your incentives are effective and aligned with your goals, you need to monitor the progress and performance of your tenants. You can use various indicators and metrics to do this, such as energy consumption, water usage, waste generation, recycling rates, carbon emissions, occupant satisfaction and health. You can also use smart technologies, such as sensors, meters, dashboards and analytics, to collect and analyze real-time data on tenant sustainability. You can also use regular feedback and reporting to track and communicate the results and impacts of your incentives.

6 How to improve tenant sustainability

Finally, you need to continuously improve your tenant sustainability strategy and practices to keep up with the changing market and regulatory conditions and to enhance your competitive edge. You can use various methods to do this, such as surveys, audits, reviews, evaluations and benchmarking. You can also use innovation and experimentation to test and implement new ideas and solutions for tenant sustainability. You can also use partnerships and networks to learn from and collaborate with other CRE owners, managers, tenants and stakeholders on tenant sustainability issues and opportunities.