Currently, sustainability and ESG responsibility are not being addressed only in real estate, it affects virtually every company. Savills therefore held a discussion on this topic, The Future of Green Leases. Together with other market experts, Savills explained how ESG applies to tenants and landlords themselves. Savills’ survey says that by 2026, green leases will become a common part of lease agreements. Absolutely key to the implementation of an ESG strategy will be the cooperation between tenant and landlord, and the setting up of ESG reporting.
Pavel Novák, Head of Office Agency at Savills, says: “A key aspect of green leases is the cooperation between landlord and tenant, and the agreement to operate the building in a sustainable manner. Unfortunately, we often see that some tenants still have requirements that are not compatible with sustainability, despite their corporate ESG strategy. Or vice versa, some landlords still fail to address the ESG reporting of their building, which in turn is key in the tenants’ non-financial reporting. However, for a real positive impact on the environment and society, a change in attitude and mindset is essential for an ESG strategy to have an effect. It can be said that we still have a long way to go.”
Cooperation between tenant and landlord
“As a developer, we are responsible for the carbon impact of our projects, so we carefully explain the requirements to meet ESG standards to each tenant. This way we help the tenant to meet their sustainability targets. We place emphasis on the efficient use of the building and recycling. We also have a list of contractors who can already operate within the set sustainability rules. Unfortunately, there are still many manufacturers on the market who are not ready,” adds Eva Nykodymová, EHS and Environmental Manager at Skanska.
Mandatory ESG reporting as early as 2024, banks already require it
Monika Kajanková, Real Estate Partner at Dentons, says: “In ESG projects, I often encounter situations where it is evident that the “Czech” side is lagging the Western Europe in the topic and implementation of ESG strategy. The approach in the Czech Republic is often weak with the reasoning that there is still enough time or that there are no specific requirements or enforcement mechanisms. However, obligatory reporting of non-financial data is required by EU legislation and data from the so-called sustainability report will be mandatory from 2024. In practice, we are increasingly seeing cases where, if a company wants to get a loan, it has to provide comprehensive ESG reports to the bank.”
Jan Jurčíček, Head of Building and Project Consultancy at Savills, closes: “Partial inefficiencies of heating, cooling and air conditioning systems caused by inappropriate regulation is currently one of the biggest problems of building energy performance. At the same time, it is very common for one part of a building to be heated and another to have the sun shining all day and cooling, creating the potential for more efficient building operation in the future. I also frequently see that the building is generally ESG-ready, but landlords do not have the right processes in place. They have the data they need, but they don’t know how to provide relevant reporting to tenants.”
