Their rise has been driven by investor requirements, due diligence expectations and the need to demonstrate that assets are being managed responsibly throughout their lifecycle.

That said, adoption remains uneven. Prime assets and institutional portfolios lead, while secondary markets move more cautiously. Where tenants do push for green provisions, it is usually global occupiers with clear corporate sustainability targets.

Good intentions but barriers to progress

Most green leases now contain a broadly similar set of provisions: commitments around EPC performance, data sharing for energy, water and waste, controls on alterations that might undermine efficiency and obligations relating to waste management. Some go further, introducing cooperation forums or social value requirements. Better Buildings Partnership (BBP) Green Lease Toolkit is a best practice checklist put together by investors, property managers, solicitors and occupiers and relaunched in 2024, helping to navigate these factors.

In practice, these provisions are often driven by pre-acquisition due diligence, green loan criteria and certification requirements rather than by the lease itself. Green lease questions frequently arise alongside BREEAM strategies and funding conditions, with the lease expected to support wider asset-level objectives rather than act as the primary delivery mechanism.

The difficulty is that these clauses often struggle to capture how buildings function. Vague language is common, and obligations are frequently framed in aspirational terms rather than as clear, measurable commitments. 

The reality

In practice, enforceability is limited. Green clauses are routinely softened during negotiations and even where enforcement is technically possible, the cost and complexity of pursuing it makes action unlikely.

Data is another sticking point. Without robust metering, ESG reporting is undermined from the outset. Tenants may resist sharing operational data unless compelled to do so, while both sides remain highly sensitive to cost. Occupiers are wary of increased service charges, and landlords must justify investment against uncertain value uplift.

Governance can also prove to be a challenges as investors and asset managers typically operate with a defined ‘house position’ on sustainability, risk and performance, while third parties can lack the operational visibility and strategic context of the asset.

There is also a structural issue. Lease negotiations often happen in isolation from the property management teams expected to implement the obligations, creating a gap between what is agreed and what can realistically be delivered.

A more pragmatic future

Green leases are unlikely to disappear. However, greater standardisation, clearer drafting and the introduction of measurable KPIs will help, as will improvements in technology and data quality. Case law is also beginning to provide guidance on which obligations are likely to stand up to scrutiny. In the longer term, sustainability provisions may simply become standard lease clauses, no longer labelled as ‘green’ at all embedding sustainability from the start.

The direction of travel is clear. The challenge now is moving from well intended clauses to arrangements that genuinely influence how buildings are used and managed.

Further information

Contact Brad Johnson or Geo Askounis