Tenant energy use is turning into a landlord’s reporting problem, and the lease is often the only instrument an owner has for getting the numbers behind it. A building owner can finance upgrades and answer to investors for a portfolio’s emissions while having little say over the equipment, operating hours and electricity contracts that produce them.
Control is where the gap opens. GRESB, the real estate sustainability benchmark, treats space as tenant controlled when the tenant holds primary authority over operating and environmental policies. Its 2025 reference guide also acknowledges that landlords of such areas may have little or no control over how utilities are used or purchased. Participants still report on every standing investment in their portfolios, whatever their share of operational control.
Timing puts the question in front of boards now. GRESB’s assessment timeline set October 1 for releasing 2026 results to participants and investors, and property companies including CapitaLand Investment have since announced their scores in their own releases. For executives preparing 2027 property budgets, the practical test is whether a portfolio can tie its emissions commitments to the information, investment rights and operating decisions needed to deliver them.
Reporting Responsibility Does Not Bring Operating Authority
Under the Greenhouse Gas (GHG) Protocol, a lessor reports emissions from operating the assets it owns and leases out in Scope 3 Category 13, downstream leased assets. That category only picks up emissions not already counted in the owner’s Scope 1 or Scope 2 inventory. Where they land depends on the lease type and the consolidation approach the owner uses. Tenant energy does not sit in the same scope for every property company, and the guidance notes that a lessor’s figure can include the tenant’s own Scope 1 and Scope 2 emissions.
Picture a warehouse where the owner maintains the roof and walls while the tenant runs refrigeration, sets the schedule and buys electricity directly. Under an operational control assessment, the tenant’s electricity may show up in its own Scope 2 inventory and in the landlord’s Scope 3 inventory at once. Value chain accounting expects overlap of this kind between companies. None of it gives the landlord authority over the tenant’s refrigeration settings or power contract.
The Lease Carries the Data
Commercial agreements are where owners can close part of the gap. The nonprofit Institute for Market Transformation (IMT) reported in its 2026 Green Lease Leaders trends review that every winner fulfilled the program’s energy tracking credit, which was also the most used credit across landlord, tenant and team applications. The finding describes the program’s 55 recognized companies, not the wider property market. It still shows where leading owners and occupiers put their attention first.
Several winners described what the clauses do in practice. Agree Realty told IMT that its green lease language gives it a clearer route to request and receive utility information, which in turn supports more practical conversations with tenants about energy use and benchmarking. Two commercial landlord winners went further, writing in terms that pass penalties under building performance standards (BPS) through to tenants, with a method for calculating each tenant’s share. Penalty language of that kind only matters where building performance standards apply, and those mandates arrive alongside the costs of electrifying buildings.
IMT’s green lease language examples, a January 2020 edition, show how the mechanics can be written down. They include clauses on how often a tenant shares energy and water data, a mutual confidentiality obligation for that information, and a provision authorizing the landlord to request the tenant’s electricity consumption directly from the utility. These are templates for negotiation and attach to no existing lease automatically. A general promise to cooperate on sustainability leaves the operating details open, so renewals and new leases are the natural moment to settle the record flow and decide who fixes missing or inconsistent figures.
Estimates Fill the Inventory but Hide the Building
Lessors are directed to the GHG Protocol’s Category 8 guidance for calculation methods. For an owner, two routes matter most. The asset-specific method builds the figure from fuel and energy data collected at each leased property, while the average-data method estimates emissions from floor space and building type when detailed records are unavailable.
Completing an inventory and understanding a building are different achievements. A floor-area estimate can close a reporting gap while saying nothing about whether a tenant ran longer shifts or cut its load. Owners gain a clearer picture when they know how much of their reported energy use is metered and how much is estimated. Without that split, a portfolio-wide decline can look like operational progress when it reflects a change in occupancy or in calculation assumptions.
Capital Plans Need an Agreement on Who Benefits
Better data also exposes the old split between who pays for an improvement and who collects the savings. A landlord weighing efficient equipment needs to know the tenant’s remaining term, the access the work will require and whether the tenant will take part. A tenant considering its own investment wants clarity on who owns the equipment when the lease ends.
An attractive engineering payback does not settle a commercial arrangement that hands one party the cost and the other the benefit. Financing structures can ease the capital side, and some owners are using Commercial Property Assessed Clean Energy (C-PACE) financing to move upgrades off frozen capital budgets. The lease still decides who captures the savings. Proposed 2027 projects are stronger when they arrive with a named owner for the affected equipment and an agreed way to measure results.
Data Access Is Becoming a Leasing Advantage
Owners moving ahead treat tenant data as a negotiated term, and Green Lease Leaders winners are pairing data clauses with penalty pass-throughs. A similar pattern shows up in data center real estate, where power provisions buried in leases have become a source of exposure for occupiers. A portfolio with signed data access can show investors measured performance. One relying on floor-area averages can show only estimates, and investors comparing benchmark results are free to ask which is which.
Tenants hold more leverage here than the reporting rules suggest. An occupier with its own climate targets can ask for efficiency upgrades or renewable supply in exchange for sharing records, and owners that have built sustainability into everyday property operations are better placed to say yes. Where those arrangements are missing, tenant engagement and data access deserve a line in the 2027 budget next to the physical upgrades.
