Sustainability in commercial real estate has moved past glossy brochures and LEED plaques. Today, it’s about actual performance, and that performance depends on something many property owners have been slow to recognize: their tenants control most of what happens inside their buildings. 

The math is straightforward. Tenants typically account for 50-70% of a building’s energy consumption through their equipment choices, how they use their spaces, and daily operational decisions. Yet the industry has spent decades treating sustainability as something landlords do to buildings, not something they do with the people inside them. 

Why This Matters 

Buildings with strong tenant sustainability programs show lower operating costs, better retention, and higher valuations. Energy-efficient buildings with engaged tenants can command rent premiums of 3-5% and experience vacancy rates 2-3% lower than comparable properties. According to the Institute for Market Transformation, green leases can reduce utility bills by up to 50 cents per square foot, a 22% reduction, and if all leased office buildings executed green leases, the market could capture over $3 billion in annual cost savings. 

Tenants increasingly need landlords who can help them meet their own sustainability commitments. Dana Robbins Schneider, SVP Director of Energy, Sustainability, and ESG at Empire State Realty Trust, said, “ESRT’s tenants are a step ahead toward long-term net zero and carbon neutrality goals, Local Law 97 compliance, and healthy buildings at an affordable price point when they join our portfolio.” 

Transparent Communication

Share building performance data regularly. Ask tenants about their goals and constraints. Create channels for two-way communication. Consider hosting quarterly town halls with tenants focused on sustainability and actionable recommendations for energy reduction alongside consumption data. 

Aligned Incentives

Green leases fix the split incentive problem by incorporating specific commitments around efficiency, waste management, and data sharing. Becker notes: “The newly introduced Green Lease Leader Platinum certification level is critical to furthering partner relationships between tenants and landlords working together to create a carbon-neutral future.” 

The numbers validate this approach. As of December 31, 2023, Empire State Realty Trust had reduced carbon emissions by 57% at the Empire State Building and 47% across their entire commercial portfolio. 

Getting People to Participate 

Education helps, but it has to be practical. The Crown Estate in the United Kingdom provides tenants with a comprehensive Sustainability Fit-out Guide covering specific strategies in management, health and wellbeing, and transport. 

Structured programs deliver impressive results. The Urban Land Institute’s Tenant Energy Optimization Program offers a proven 10-step process that integrates energy efficiency into tenant space design and construction. When implemented in pilot projects, tenants achieved energy savings of 30 to 50%, payback periods of three to five years, and an average 25% internal rate of return. 

The buildings getting the best results recognize that different tenants engage differently. The Fortune 500 company wants detailed data and strategic collaboration. The small law firm might just need simple guidance on behavioral changes. 

When Things Get Stuck 

Resource constraints are real. The solution isn’t doing everything; it’s doing the right things and building systems that scale. Automated data platforms and self-service tools reduce staff burden while giving tenants access to what they need. 

Some tenants worry about sharing data. Be transparent about how you’ll use and protect information. Show them the value—how their data enables better service and helps them meet their own goals. 

Innovative engagement extends beyond traditional metrics. Empire State Realty Trust partnered with Alvéole to bring urban beekeeping to 100% of their Manhattan portfolio, reaching over 3,000 people in 2024 through workshops and events. This type of experiential program creates connections between tenants and sustainability. 

Proving It’s Working 

Track both process metrics—participation rates, program enrollment—and outcome metrics: energy intensity, waste diversion rates, emissions reductions. More importantly, share results with tenants. Create transparency about collective progress. 

Tokyo’s Cap-and-Trade Program offers an instructive model: the Tokyo Metropolitan Government mandates that large tenants submit annual emission reduction plans, then rates them based on progress. This system promotes landlord-tenant collaboration and motivates both parties to improve building efficiency. 

Where This Goes Next 

The commercial real estate industry is moving toward net-zero emissions, whether everyone’s ready or not. Properties that get there will be the ones that figured out how to work with their tenants as partners. 

Tony Malkin, Chairman, President, and CEO of Empire State Realty Trust, said, “ESRT’s continued commitment and focus on these initiatives across our portfolio is part of our attractive offering for high quality tenants with coinciding goals.” This philosophy has translated into a 98% lease renewal rate in Q1 2025 and 93% Manhattan office occupancy even as the broader market struggles with 19.2% availability rates. 

The industry is at a turning point. Properties that successfully engage tenants as sustainability collaborators won’t just achieve better environmental performance. They’ll create more valuable, resilient, and competitive assets. In a market where every advantage matters, that ability might separate leaders from everyone else. 

References

• Brandywine Realty Trust. “Brandywine Realty Trust Receives 2022 Green Lease Leader Platinum Recognition.” May 31, 2022. https://www.brandywinerealty.com/news/brandywine-realty-trust-receives-2022-green-lease-leader-platinum-recognition 
• Empire State Realty Trust. “2023 Sustainability Report: Empire State Realty Trust.” 2024. https://online.flippingbook.com/link/720526 
• GRESB. “Tenant Engagement–The road to corporate sustainability.” July 26, 2024. https://www.gresb.com/nl-en/tenant-engagement-the-road-to-corporate-sustainability/ 
• Institute for Market Transformation. “Green Lease Leaders Program.” 2022. https://www.imt.org/green-lease-leaders/ 
• “Ron Becker, SVP of Operations and Sustainability at Brandywine Realty Trust.” Enertiv Podcast. January 25, 2023. https://www.enertiv.com/resources/podcasts/ron-becker-brandywine 
• “Ronald J Becker, SVP Operations and Sustainability at Brandywine Realty Trust.” Crown Electrokinetics. April 15, 2022. https://www.crownek.com/scions-of-sustainability/ronald-j-becker-brandywine-realty-trust 
• Urban Land Institute. “Tenant Energy Optimization Program.” 2025. https://tenantenergy.uli.org/ 

Thank you to our ENERGY STAR Month sponsor Baker Engineering.

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