Progress on Business Sustainability
Bigger companies appear more receptive to reducing their environmental impact.
Office-based businesses are aware of their environmental obligations and they’re reducing their impact by carrying out the following steps.
What, if anything, are you currently doing, or will you start doing to reduce the environmental impact of your office?
The cost of sustainability
From the graph above, it’s clear that respondents are already implementing quick wins to make their office more environmentally friendly. But how much are they actually prepared to pay to reduce their impact on the environment?
Although 84% of respondents said they’d be prepared to pay a higher rent for office space which reduces their organisation’s impact on the environment, they did have caveats.
30% of respondents said they’d be prepared to pay a higher rent, but only if they received some reduction in their service charges or energy bills.
An additional 27% said they’d pay more rent, but only if they got an equivalent reduction in their service charges or energy bills. Another 27% of respondents said they would pay more rent, but only if they get more than an equivalent reduction in their service charges or energy bills.
Most companies are therefore expecting some pay back if they agree to a higher rent to address their environmental impact.
Only 11% respondents said they wouldn’t be prepared to pay a higher rent for office space which reduces their organisations impact on the environment. 5% were unsure.
Would you be prepared to pay a higher rent for office space which reduces your organisation's impact on the environment?
In terms of regions, again Greater London seems to be leading the way. 91% of respondents in Greater London said they’d be prepared to pay a higher rent for office space which reduces their organisations impact on the environment, compared to 76% of businesses in the North West. In terms of sectors, 88% of those in the finance sector and 92% in telecoms and IT said the same.
By contrast, only 69% of those businesses in retail, hospitality and leisure said they’d be prepared to pay a higher rent for office space which reduces their organisations impact on the environment, perhaps reflecting the greater economic constraints in this sector. Many of these businesses will already be contending with declining income and revenue due to decreased consumer activity.
Bigger companies also seem to be the most receptive to making a stronger commitment to the environment, likely because they have greater resources to do so. 94% of respondents who work for a company with an annual turnover of £100 million to £499.99 million said they’d be prepared to pay a higher rent for office space which reduces their organisation’s impact on the environment. This compares to three quarters (75%) of respondents who work for a company with an annual turnover of £100,000 to £999,999.
Tenants expect landlords to put their hands in their pockets too
When it comes to service charges, we asked how businesses who have a landlord how they would respond to their landlord increasing their service charge to make improvements that will reduce energy consumption and provide more control over the interior environment. The replies were mixed:
Nearly a quarter (23%) of these respondents said they’d welcome such moves; and they’d be happy to make a full contribution if their office landlord increased their service charge to make the improvements. Over half (51%) of these respondents said they’d expect the landlord to fund at least some of the works.
Meanwhile 22% of these respondents said they want the service charge to be as low as possible during the present economic climate, and they wouldn’t support such expenditure if it resulted in a higher service charge.
Unsurprisingly, costs and expenditure remain front of mind at present.
How would you respond to your office landlord increasing your service charge to make improvements to your building to reduce energy consumption and provide more control over the interior environment?
“With increasing focus on meeting ESG commitments against a backdrop of rapidly increasing property occupancy costs and evolving working practices, such as hybrid working, it is more important than ever for landlords to provide services that meet occupiers needs in a cost-effective manner. Collaboration and transparency between landlords, their agents and occupiers are key to achieving these aims.”
Tim Parkin
Director of Building Consultancy & Head of Offices, Assure Consulting