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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Thursday, June 30, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will provide landlord-tenant counsel with guidance on incorporating ESG considerations into future leases. The panel will discuss specific provisions to consider, how to split costs among stakeholders to meet these requirements, and best practices for properties that desire to meet ESG standards while mitigating risks.

Faculty

Brad A. Molotsky
Partner
Duane Morris LLP.

Mr. Molotsky’s primary practice is focused in the areas of commercial leasing, acquisitions and divestitures, property management, financing, public private partnership and real estate joint ventures (including mixed-use development). He also has deep experience in board governance and managing public company issues such as enterprise risk, internal audit, compensation, proxy statement preparation and review, as well as energy efficiency and sustainability and corporate social responsibility. Previously for nearly 20 years, he served as executive vice president, general counsel and corporate secretary of Brandywine Realty Trust where he was responsible for all legal operations of the company, including acquisitions and divestitures, financings, joint ventures, board matters, insurance procurement, litigation oversight, SEC filing oversight and the legal aspects of capital raising.

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Annette Michelle Willis
Partner
Troutman Pepper Locke LLP

Ms. Willis combines in-depth knowledge of all aspects of corporate law with her experience as in-house counsel when advising executive management teams, boards of directors, and business leaders. She identifies and prioritizes legal, regulatory, compliance, and reputational risks to deliver creative legal and business solutions that mitigate potential issues. Ms. Willis is experienced in the integration of corporate social responsibility objectives and initiatives, including ESG matters; diversity, equity and inclusion initiatives; and human rights, into corporate structure, missions, and business planning and public disclosures.

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Margaret Lo
Director, Business Engagement
Institute for Market Transformation

As IMT’s Director of Business Engagement, Ms. Lo provides resources and solutions to businesses that improve their energy efficiency and building performance at the national and local levels.





She has over 15 years of experience creating positive change and advancing sustainability efforts in the private, academic, and non-profit sectors. Ms. Lo was the Sustainability Director for George Mason University (Mason) where she focused on reducing the university’s environmental footprint and advancing sustainable practices on campus. She compiled Mason’s first Sustainability Tracking, Assessment, and Rating System report to measure the university’s sustainability performance. Ms. Lo also led sustainability reporting and marketing campaigns for the University of Central Florida (UCF) in Orlando. At UCF, she was the lead author for UCF’s first Climate Action Plan and managed several energy reduction programs that were highlighted by the U.S. Department of Energy. Ms. Lo also worked with Fortune 500 companies to reduce their environmental impact and encourage corporate philanthropy as a Corporate Partnerships Manager with The Nature Conservancy, one of the largest environmental non-profit organizations. She has also provided consulting services to a large electric utility on its commercial energy efficiency rebate program. Ms. Lo was a LEED AP, received her MBA from the Ross School of Business at the University of Michigan and Bachelor’s in Business Management from Binghamton University, SUNY. 

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Description

ESG continues to be a factor in business development, including commercial real estate. As the goal of mitigating climate change has risen, the commercial real estate industry has seen an increase in green buildings and clean energy infrastructure. Leases, which include various provisions to promote energy efficiency and environmental sustainability, are often referred to as "green leases." Such leases can be tailored to meet both landlord and tenant requirements and building-specific needs.

At the beginning of the process, landlords can seek to construct buildings that meet the requirements of LEED or other green building certifications. Landlords can also require the tenant to include specific sustainable design components, materials, or construction methods recommended for green building certification. It is unclear whether a landlord can require a tenant to meet a particular certification standard.

Landlords and tenants can also incorporate renewable energy into a commercial lease. In some cases, renewables like solar panels can lead to tax and power generation revenue, for which the parties will have to determine who bears responsibility, risk, and potential benefits.

Tenant improvements are often provisions in commercial leases, and the parties can structure leases to share costs associated with energy-saving improvements. Under a net lease, where the landlord is responsible for capital expenses and the tenant is responsible for utility and operating expenses, there is little incentive for the landlord to add energy-saving improvements because they do not directly reap any cost benefits from such improvements.

However, by selecting a different cost-sharing structure, landlords have a reason to implement significant energy-saving improvements. Likewise, leases seeking to achieve ESG compliance could specify only energy-efficient appliances and equipment on the leased property.

Leases can also impose limits on toxic cleaning products to improve indoor air quality. Parties can also include provisions in leases that incentivize the use of public transportation or alternatives to motor vehicles by providing storage or monetary compensation. A commercial lease provides these numerous opportunities to affect potential environmental and societal issues.

Listen as our expert panel discusses the key provisions in commercial leases that can incorporate ESG concepts. The panel will address critical provisions and best practices when negotiating these leases to achieve ESG goals.

Outline

  1. ESG factors to consider in commercial leases
    1. Building certification
    2. Renewable energy
    3. Major energy saving improvements
    4. Equipment and appliances
    5. Outdoor spaces
    6. Employee/occupant benefits
    7. Other provisions
  2. Best practices

Benefits

The panel will discuss these and other key topics:

  • How can landlords and tenants best incorporate energy efficiency in buildings that are not LEED certified?
  • What tenant improvement allowance restrictions can landlords and tenants negotiate to achieve ESG goals?
  • What incentives can commercial leases provide to reduce traffic or other air pollution?