Green Leases

In recent years, more and more companies are embracing ways of promoting sustainability and energy efficiency in the operation, use and management of buildings. 

In Ireland, there is a growing trend towards integrating ESG (Environmental, Social, and Governance) clauses in commercial leases.  

Initially, these clauses were aimed at newly built ‘A’ rated multi-occupation buildings, in which occupiers share common areas and pay service charges, but they are becoming more common in older buildings. 

The following are some considerations: 

1. Environmental Clauses (E) 
   • Energy Efficiency & Sustainability Requirements: 
     • Landlords may require tenants to use energy-efficient systems, such as LED lighting, or to maintain minimum Building Energy Ratings (BER). 
   • Green Fit-Out & Refurbishments: 
     • Tenants may be obliged to carry out fit-out in an environmentally responsible way, using sustainable materials and minimising waste. 
   • Waste & Recycling: 
     • Tenants often must follow recycling protocols, reduce landfill waste, and use waste contractors that meet environmental standards. 

2. Social Clauses (S) 
   • Accessibility & Inclusivity: 
     • Leases may incorporate requirements for the premises to remain accessible under equality legislation (e.g., for people with disabilities). 
   • Community Engagement: 
     • Some landlords encourage or require tenants to support local community initiatives or report on social value contributions. 
   • Employee Welfare Provisions: 
     • Clauses might address amenities like cycling facilities, showers, or healthy workplace design. 

3. Governance Clauses (G) 
   • Data Sharing & Reporting: 
     • Tenants and landlords may need to share data related to energy use, emissions, and other ESG metrics for compliance or reporting purposes. 

Green lease clauses are not mandatory in Ireland, yet. They an area of development and need thought and negotiation. Ideally, they are first agreed at heads of terms stage and, especially if being introduced into older buildings, should be tailored to suit the specific building, the users and the various vested company environmental charters. 

Our commercial team will be happy to advise you in these matters please contact us at 01 873 5012 or info@mcgrathmullan.ie 

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