TC4: Sustainability Requirements in Lease Contracts (Green Leases)
Maximum Score
2.5 points
Input Method
Assessment Portal
Prefill
Eligible
Scoring method
Static
Validation
Other answer is manually validated
Does the entity include sustainability-specific requirements in its standard lease contracts?
Assessment Instructions
Intent: What is the purpose of this indicator?
This indicator describes the strategies to promote sustainability performance through lease contracts. The content of lease contracts is the starting point for the relationship between the landlord and the tenant, and defines both parties’ respective rights and duties.
Input: How do I complete this indicator?
Select yes or no. If yes, select all applicable sub-options.
Percentage portfolio covered: Calculate coverage based on floor area.
Terminology
Comfort
Clauses can relate to cooperation between the parties to achieve comfort, including complaints monitoring, and programming of the building management system to maximize efficient supply of air-conditioning.
Design/Development ratings
Encourage, facilitate or require the parties to commit to / not interfere with a design/development rating of the premises or building. Clauses can relate to achievement or maintenance of a rating, cooperating with the other party to assist them in obtaining a rating or in achieving a higher than previously achieved rating, sharing rating certificates when achieved or as requested, etc.
Design for performance
A design approach based on measurable performance outcomes to ensure projects meet their design intent and minimize the performance gap.
Enabling upgrade works
Encouraging, facilitating or requiring the parties to upgrade the building or premises to improve the efficiency or environmental performance of the building during the term. Clauses can relate to cooperation between the parties to facilitate the carrying out of works designed to improve the efficiency or environmental sustainability of the building.
Energy management
Clauses can relate to installation of metering equipment to measure energy consumption, programs to reduce the consumption of energy, including education of employees, sharing of energy consumption data between the parties, allowing a party to read the other’s energy meters, installation of energy efficient products, etc.
Environmental initiatives
Any type of initiative relating to environmental sustainability, such as recycling, green cleaning or land use ecology.
Sustainability clause
A particular and separate article or element as part of a contract that is directly related to sustainability.
Sustainability management collaboration
The lease must require one or both parties to appoint a representative responsible for sharing the sustainability-related information.
Information sharing
Encourage, facilitate or require information sharing, related to energy or water consumption, production of waste or greenhouse gases, recycling rates, etc. Clauses can relate to providing the landlord access to the tenant’s meter, or to monthly automated reports being sent to both parties.
Managing waste from work
Clauses can relate to the landlord accepting a make-good payment in lieu of reinstatement works, the monitoring/minimization of waste from works, enabling fit-out to be reused, recycled, repurposed, or redirected from landfill, etc.
Metering
The use of meters to measure how much gas, electricity, or water is used.
Performance rating
Clauses can relate to achievement or maintenance of a rating, cooperating with the other party to assist them in obtaining a rating or in achieving a higher than previously achieved rating, sharing rating certificates when achieved or as requested, etc.
Performance standards
Clauses can relate to works and maintenance contractors being required to adhere to waste programs, or not to interfere with building performance.
Social initiatives
Encourage, facilitate or require initiatives that are designed to improve the wellbeing of the premises’/buildings' surrounding communities. Initiatives can relate to provision of healthy food, commitments to human capital, health and safety or above-award pay for building management, responsible use of ground level and surrounding public space that results in enhancement of the surrounding community, etc.
Standard lease contract
Standard lease format that is used by the entity as the basis for negotiations between landlord and tenant.
Sustainable cleaning
Clauses can relate to cleaners being required to use environmentally friendly cleaning products, adhering to the building’s waste strategy, etc.
Sustainable procurement
Encourage, facilitate or require the reduction of consumption of goods within the building or premises and/or the sourcing of sustainable or ethical goods. Clauses can relate to reduction of paper consumption, supply of biodegradable materials, use of recycled paper, building materials, etc.
Sustainable transport
Clauses can relate to preparation of an alternative transport report, sharing of information relating to public transport, environmentally low impact transport, end of trip facilities, bicycle racks, car share services, etc.
Sustainable utilities
Encourage, facilitate or require the parties to discuss procurement of more sustainable utilities/offsets, or install plant and equipment to enable the generation and on-sale of sustainable utilities. Clauses can relate to on-sale of electricity, gas or water, on-sale of certified renewable sources of a utility, installation of renewable energy plant and equipment, installation of recycled water facilities, etc.
Water management
Clauses could relate to installation of metering equipment to measure water consumption, sharing of water consumption data between the parties, allowing a party to read the other’s water meters, installation of water efficient products, etc.
Energy consumption
The use of energy by the entity.
Water consumption
The use of water resources by the entity.
Waste management
Issues associated with hazardous and non-hazardous waste generation, reuse, recycling, composting, recovery, incineration, landfill and on-site storage.
Renewable energy
Renewable energy produced on-site, or procured off-site, to meet some or all of the building’s energy requirements.
As-built delivery documentation
A comprehensive set of finalized documents that reflect the actual, completed construction of a property or project. These documents capture any deviations from the original design plans and specifications that occurred during construction, providing an accurate representation of the finished structure. It typically includes updated drawings, material records, inspection reports, and compliance certifications.
Validation: What evidence is required?
No evidence required. Only the 'Other' answer is manually validated.
Other Answer
Other: State the cooperation and work requirements.
Other: State the management and consumption requirements.
Other: State the reporting and standards requirements.
Other: State the data sharing & metering element.
It is possible to report multiple other answers. If multiple other answers are acceptable, only one will be counted towards scoring.
Scoring
Scoring: How does GRESB score this indicator?
The scoring of this indicator is equal to the sum of the fractions assigned to the selected options and respective sub-options, multiplied by the total score of the indicator.
Other: The 'Other' answer is manually validated and assigned a score which is used as a multiplying factor, as per the table below:
Accepted
1/1
Not Accepted
0
Duplicate
0
The percentage of lease contracts with a sustainability clause and sustainability topics covered in the program are not scored and are used for reporting purposes only
Frequently Asked Questions
Who should a hotel owner consider as tenants in the Real Estate Assessment?
For entities with hotel assets, hotel operators are considered the tenant. Therefore, surveys administered by the hotel operator are considered internal. In cases where there is no third- party hotel operator and the reporting entity directly operate the hotel instead, the hotel guests should be considered the tenants.
Please note that this rule applies to all aspects, including indicators under Tenants and Community.
I'm an owner and occupier. How should I approach tenant-related questions in the Tenant & Community section of the Performance Component?
If you own and occupy your building, your employees should not be considered tenants. Therefore, the tenant engagement section of the assessment is likely not applicable, and you should select ‘Not Applicable’.
Why do TC3 and TC4 show a weight of 2.5 points in the portal after I have chosen to complete the Residential Component, within which these indicators are unscored?
TC3 and TC4 indicators retain a scoring weight of 2.5 points in the Assessment Portal because this reflects their role in the Real Estate Benchmark Report. This scoring remains visible even for participants completing the Residential Component, as the portal structure does not dynamically adjust displayed weights based on component selection.
However, in the Sector Insight: Residential Report, TC3 and TC4 will carry 0 points as they are not scored for residential participants, aligning with the residential scoring methodology.
References
Better Building Partnership
Leasing Lifecycle Tool
Green Lease Library and Green Lease Leaders Recognition Program
SASB-Real Estate Owners, Developers & Investment Trusts, March 2016: IF0402-10
Get Support: Solution Providers
GRESB Solution Providers are independent, third-party organizations within the GRESB Partner network that offer specialized products, tools, and services to support sustainability performance outside the GRESB Assessment process.
The organizations below deliver commercially available solutions designed to help drive improvement for this indicator. Engagement is managed directly between the reporting entity and the Solution Provider.
GRESB will continue to update this section as the GRESB Solution Provider network grows. Please check back regularly to find GRESB Solution Providers who can support your sustainability performance.
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