Tenants Can Go Green

22 October 2008

Improving the carbon footprint of multi-tenanted buildings has up to now been difficult to achieve. Now the London Climate Change Agency struck a partnership with Legal & General Property that could influence the wider commercial property market in the capital.

THE LONDON CLIMATE CHANGE AGENCY (LCCA) through its Better Buildings Partnership (BBP) and
Green500 initiatives has announced a partnership with Legal & General Property which is engaging with several of its high-profile tenants in an unprecedented collaboration between landlords and occupiers to work together to improve the sustainability of buildings.

Legal & General Property is the first company to take advantage of this unique partnership between the BBP and London’s carbonmentoring scheme, Green500. Among the 50 organisations signed up to Green500 are Chelsea Football Club, EDF Energy, Marks & Spencer, The John Lewis Partnership, Eversheds, T-Mobile, Guy's and St Thomas' Hospital, Ernst & Young, Kings College London. Green500 aims to collectively cut their carbon emissions by 1.5million tonnes over 2_ years.

The Better Buildings Partnership works to develop solutions that stimulate and enable the commercial property sector to take up widespread sustainable building retrofit and stimulate the development of partnership initiatives between them. Both the BBP and Green500 are LDA initiatives aimed at establishing the capital as a beacon of environmental excellence.

Around 90 per cent of office space in London is leased, and 40 per cent of office buildings are multi-tenanted. These two schemes are working side-by-side to help break down the barriers that occur between owners of commercial and public property and their tenants/occupiers when implementing carbon saving measures.

Guidance
Members of the Green500 and BBP teams have been working with Legal & General Property and the occupiers at 99 Gresham Street, EC2, owned by Legal & General Property’s Linked Life Property Fund. It is providing guidance on how, through collaborative working, the sustainability of the building they share can be improved.

Commenting on the partnership, L&G’s Head of Customer Services, David Mummery, explained that the tough carbon emission targets set by London’s Mayor had made them focus on how to understand and reduce the carbon footprint of their 107 property holdings in the capital. However, the decision to be pro-active in reducing emissions and improving efficiency is not without its commercial edge. “We have
stolen a lead in the UK to be the first fund management business to provide its complete portfolio of 500 properties with energy performance certificates by June 2009 regardless of whether they are being constructed, sold or let,” he explained. “We made a commitment to make a difference. Participating in this
partnership focuses on how we collaborate with our tenants to understand and reduce all our carbon footprints.”

Occupiers at 99 Gresham Street include Butterfield Bank (UK) Limited, City Golf & Health Clubs, Steptoe & Johnson LLP and Tradeweb Europe Limited. Green500 is providing specialist guidance to Legal & General Property and its tenants through its carbon mentor scheme. A member of this scheme then carries out a
Carbon Opportunities Assessment (COA) of the building to determine where efficiencies can be enhanced, such as energy and water use, and waste management. The COA will form the basis of an action plan developed with the support of the carbon mentor and implemented by the landlord and occupiers. Mummery explained, “The action plan will take up to 12 months to implement and covers all aspects of occupation
including energy use and reduction, and business operations.”

Legal & General Property has also formed an alliance with Power Efficiency to provide accurate measurement of energy use. Mummery aims to have half-hour monitoring 24/7 in 10 key buildings in the London estate, with regular monitoring in the other buildings. He explained that with the information provided
demonstrating energy usage of each tenant, they are working with managing agents Kings Sturge and to encourage occupiers to change their business methods.

Among the initiatives under consideration are a move to daytime cleaning regimes, providing
suites for ‘out of hours/weekend’ working to prevent whole floors being used when only a few people need them outside core hours, and reducing the operation of chillers by one hour a day. Such moves will help to reduce running costs to the benefit of all tenants’ service charges.

Helen Gordon, Director at Legal & General Property, concurs. She said, “If we are to elevate the sustainable performance of London’s building stock, it is essential that owners of leased buildings and occupiers work together in identifying the best methods of improving each building. The Better Buildings Partnership and
Green500 have provided a very valuable platform from which to collaborate in a more efficient and productive manner than was true in the past and at Gresham Street in particular, we are establishing a stronger understanding between LGP and our tenants. Legal & General Property manages £11bn of property in the UK (as at end of March 2008). We believe that this represents an excellent opportunity to establish a more collaborative working model, which we believe will be applicable throughout our portfolio and beneficial to ourselves, our tenants and the market.”

The work of the BBP and Green500 will go a long way to improving the sustainability of the capital’s buildings and facilitating powerful and fruitful partnerships between the people who are responsible for them.

London's Climate Change Action Plan
Released in February 2007, the Plan established the path for turning London into a low carbon City by setting ambitious targets to reduce carbon dioxide CO2 emissions reductions by 20 per cent relative to 1990
levels by 2016, as a first step to reducing carbon dioxide emissions by 60 per cent relative to 1990 levels by 2025.

The plan identified that London’s electricity and gas consumption causes emissions of 35 million tonnes of CO2 per annum (75 per cent of London’s emissions) and is set to increase by 15 per cent by 2025, if nothing is done.

The Plan also aims to enable 25 per cent of London’s energy supply to be moved off reliance on the grid and on to local decentralised energy systems by 2025, with more than half of London’s energy being supplied in this way by 2050.

The public and commercial sectors accounted for 18m tonnes of London’s annual carbon emissions in 2006 (40 per cent of the capital’s total CO2 emissions) of which heating accounts for 36 per cent and
lighting for 26 per cent.