GBCA’s TRANSFORM: EY is preparing to mandate minimum environmental standards in all of its future building leases, as part of a push by the professional consultancy services firm to reach net zero by 2025.

The initiative was revealed on Tuesday by EY’s managing partner for real estate, hospitality and construction in Oceania, Selina Short, during a session at the Green Building Council of Australia’s Transform conference in Sydney.

The idea of green leases is not new – The Fifth Estate was writing about it more than 10 years ago, with companies like Westpac adopting the practice back in 2014.

However, EY’s new policy does mark a mainstream shift, with net zero targets becoming more important to C-suite executives as they evaluate buildings.

Ms Short told the conference she believes the firm is on track to meet its 2025 net zero target, with its two biggest sources of emissions being from buildings and travel.

“We are just at the moment about to put in place compulsory elements of the green leases to be in place in all new leases that were entered into. The [owner of the] building must sign up to science based targets within 90 days of when that lease is signed,” she said. 

“So we’re going to enter this period where, if the owner of the building cannot make that commitment, we will not move into that building. 

Along with mandating standards for future leases, EY is in the process of “mapping out” the owners of the buildings it leases across Australia, in order to identify which ones have high science based targets.

A shift in attitudes

According to Ms Short, the new policy is the product of a shift in attitudes around sustainability in recent years among the consultancy’s senior partners.

“If I cast my mind back to a major lease decision we were making about four years ago, we had two very distinct choices,” she said.

“The current building [was] within a part of that city that the partners all loved. [The other building the firm was looking at] was in another part of the city that they weren’t that sure about. That building had much stronger green content credentials.

“Four years ago, I’m going to be honest, [sustainability] was part of the conversation, but it was over to the side.

“I can say with absolute confidence, if we were having that same debate now, it would be a very different conversation. Not only  the governance, the structures and the contractual elements that we’re putting in place, but also the mindset of the partners, who are the owners of the business and have committed to this.”

Broader sustainability push

The new lease policy is part of a broader refocus on sustainability within EY, which accelerated with the acquisition of community investment services consultancy Karrikins Group in March 2019.

The acquisition added around 100 more staff to the consultancy giant’s climate change and sustainability services practice – making it the largest sustainability team of any consultancy firm in Oceania.

Building on this acquisition, during February, EY Oceania undertook a restructure that saw it centralise its climate change practice in a new Net Zero Centre.

According to Ms Short, the move was designed “to really help our clients tackle this problem, because our belief is this will be the most fundamental business issue that our clients need to solve over the next decade.”

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