Reducing Carbon Footprint in a Commercial Environment

Energy Performance Certificates (EPCs)

An EPC formally confirms the energy rating of a building, between A (very efficient) and G (very inefficient), and is accompanied by a Recommendation Report, usually suggesting improvements which will make the building more energy efficient.

An EPC may help a business to decide whether or not to purchase or occupy a building or whether to attempt negotiation of its purchase price or rent. There is no legal obligation to carry out recommendations made in an EPC.

Green Leases

A ‘green’ lease incorporates provisions relating to the monitoring and improvement of the performance of a building in terms of water usage and energy and is designed to ensure that the building is as energy efficient as possible. The corporate image of the owner or occupier of such a building may be enhanced if it embraces the practices recommended.

A green lease helps the parties to meet building standards in construction and to deal with alterations. Compliance with its recommendations should promote a healthy environment for the occupier’s workforce and the use of environmentally friendly materials. The building should also be more marketable, as energy bills and service charges should be lower.

A landlord who grants a green lease may offer incentives, such as reduction in service charges or leniency in respect of dilapidations, to a tenant who complies with its recommendations or improves the building’s energy efficiency.

Carbon Reduction Commitment (CRC)

The aim of this government scheme is to reduce carbon emissions by 2020. Statutory regulations are not yet in place (final consultations are in progress) but the CRC is scheduled to begin in April 2010.

If electricity usage of a business, through half-hourly metering, exceeds 6000 MWh per annum, it is likely that CRC will apply. Penalties will be payable if a business so affected exceeds the prescribed threshold.

Any business assessing carbon emissions and implementing plans to reduce them before April 2010 should therefore save money in the mid/long term.

This article was written by Aldene Derrick, a Solicitor in our Commercial Property department.