Is ESG part of your lease? If not, here's why it should be

While environmental clauses remain the key focus in green leases, a push for stronger social responsibility clauses is gathering pace.

More corporates are beginning to look at green leases to help create a positive social as well as sustainable impact for building occupants and local communities.

Up to 87% of sustainability leaders have already implemented criteria in their leases to ensure regular engagement with local communities compared to 43% across all organisations, according to JLL’s social value report.

This includes supporting local economic growth by offering employment opportunities and implementing responsible procurement practices.

Part of the reason for this inclusion is the ongoing war for talent. Increasingly, the top talent has a social agenda, which needs to be reflected if we are to get them in the door, let alone retain them. These social clauses are likely to play a more integral role.

In fact, our recent survey indicates that over 50% of the employees in Asia Pacific would prefer a sustainability leader as their future employer.

Employees today are no longer silent on their stance towards sustainability. They are proactively demanding action and expect their employers to be supportive of and aligned with their goals.

This means organisations jostling for talent, when designing and building their facilities, must build a socially inclusive, welcoming environment that consider employees’ health and wellbeing as part of the overall business goal.

For instance, one of ESR’s logistics facilities in Ichikawa, Japan houses a relaxation lounge, a children day care centre, and retail shops on-site — amenities seldom seen for employees in warehouses.

Providing quality amenities and incorporating office features, such as accessible restrooms and workstations, dedicated social spaces, or adjustable desks, will become a mainstay in green leases, especially for companies aiming to come out on top in the quest for success.

As of now, four in 10 organisations surveyed by JLL have yet to firmly embed their environmental goals, much less their social value agenda, in their real estate strategies. We believe that when companies lag in outlining ESG goals and realising a responsibility to the environment and their communities, they will struggle to achieve their goals.

If ESG isn’t yet a consideration, the next leasing agreement is an opportune time to act and chart a sustainable course towards responsible real estate.

Unsure of how to get started? Speak with a JLL leasing expert to incorporate environmental and social priorities in your next lease.