Council of Smaller Enterprises (COSE) and the Institute for Market Transformation (IMT) are currently working together and collaborating with the Cleveland 2030 District throughout the greater Cleveland area to help commercial buildings save money and energy by connecting landlords and tenants around energy efficiency—particularly when it comes to the lease. 

The infographic highlights some key examples of energy-saving clauses that are typically included in a green lease, also known as an energy aligned lease, including; regularly commissioning building systems, installing advanced lighting controls and motion sensors, sub metering spaces, and training asset and leasing managers about green building benefits.

For a better look, click the image below.

What is a green lease?

A well-known barrier to energy efficiency in buildings is the “split incentive” problem: If the tenants pay the energy bills, the landlord has little incentive to invest in efficient equipment, but at the same time, the tenant does not own the energy-using lighting, heating, cooling and ventilations systems of the building, and therefore has no incentive (or ability) to invest in efficiency upgrades. The result is that neither party takes the initiative to perform energy-saving improvements. In commercial rental properties this “split incentive” problem and general lack of tenant engagement strategies frequently limits the uptake of energy efficiency solutions.

For programs such as the COSE nonresidential energy assessments, landlords and tenants must collaborate in order for an assessment to lead to energy efficiency improvements. This can be accomplished through green leases. Traditional leases designate responsibility for landlord and tenant, but rarely do they account for energy efficiency. When inserted into existing lease forms, green leasing terms realign incentives, facilitate information sharing and encourage landlord and tenant to work together on the efficient use of energy and other resources.