The Evolution of Green Leases: Towards Inter-organizational Environmental Governance

This paper investigates how leases are evolving to become “greener” in the United Kingdom and Australia. The authors provide evidence from five varied sources including (1) UK office and retail leases, (2) retail sector energy management in the UK, (3) a major UK retailer case study, (4) office leasing in Sydney and (5) expert interviews on Australian retail leases. With some exceptions, the evidence reveals an increasing trend towards green leases in prime offices in both countries, but not in retail or sub-prime offices. Generally introduced by landlords, adopted green leases contain a variety of ambitions and levels of enforcement. As an evolving form of private-private environmental governance, green leases form a valuable framework for further tenant-landlord cooperation within properties and across portfolios, according to the authors. They argue this increased cohesion could create new opportunities for polycentric governance, particularly at the interface of cities and the property industry.