In what ways are property managers – a lynchpin between property owners and occupiers – playing a critical role in decarbonising the built environment?

The ULI C Change Owner Occupier Community of Practice (OOCOP) has been taking a deep dive into the role of the property manager, including most recently at a dedicated C Change Summit workshop which brought together industry experts from across Europe.

During the workshop, it was evident that while occupiers prioritising workplace sustainability can influence building-level initiatives, property managers play an equally pivotal role as a conduit between owners and occupiers, creating opportunities for stronger collaboration and alignment on sustainability goals.

The expanding role of property managers

Property managers typically help to preserve and enhance the value of buildings by effectively managing day-to-day operations, tenant relations, financial administration and compliance with statutory requirements.

Some operate in-house as part of a vertically integrated business, while others are external contractors (service providers). However, a third emerging approach combines in-house property management services with the delivery of third-party services to clients.

Traditionally, they work closely with their client – the owner or asset manager – to implement building-level decarbonisation strategies. However, with rising environmental, social, and governance (ESG) expectations on businesses, occupiers are now also pushing for their corporate real estate to align with their own, often progressive, decarbonisation goals.

This has resulted in expanding workloads for property managers in recent years. Where they used to seek operational efficiencies through environmental performance improvements, they are now asked to contribute to regulatory compliance – collecting and analysing sustainability data and supporting building owners and managers’ efforts to meet the rising expectations of their occupiers.

Aligning with occupiers’ ambitions

Decarbonisation is not just a priority for owners and occupiers; property managers are also pursuing their own emissions reduction targets and face a unique challenge where occupiers’ activities contribute significantly to their Scope 3 emissions. For instance, JLL reports that 96 percent of its Scope 3 emissions originate from the properties it manages for clients. This interdependence highlights the critical role property managers play in achieving decarbonisation targets for themselves, their clients, and occupiers alike.

Collaboration in action

Through ULI’s regular OOCOP discussions, it has become clear that many property managers are using good engagement practices to drive forward their own goals as well as the goals of those around them.

In new-build developments, sustainability is often baked into the development and leasing process. Here, property managers report that engaged occupiers are helping close the historically significant performance gap between a building’s design potential and its actual operational emissions.

Even in multi-let buildings, where collaboration has been more complex, occupiers are increasingly advocating for performance improvements, leveraging property managers to communicate their concerns and ideas. Whether driven by cost-saving goals or the pursuit of sustainability targets, property managers can harness this interest to implement energy efficiency measures. These efforts often serve as a steppingstone toward implementing more building-wide sustainability initiatives with occupiers in the future.

ESG in occupier engagement

ESG has become a key topic in occupier meetings, with dedicated forums — commonly known as ’sustainability committees’ — emerging in multi-tenant buildings that bring together owners, occupiers and property managers to discuss goals, share best practice and drive forward initiatives.

For many occupiers, particularly those less familiar with sustainability, these forums provide an essential introduction to how they can contribute to the building’s decarbonisation efforts. Some occupiers send members of their ESG teams, while others involve their operational teams, highlighting the forum’s significance.

Owners increasingly look to property managers for innovation

While owners are increasingly incorporating sustainability clauses into lease agreements, committing both owners and occupiers to act on sustainability, these mechanisms alone are unlikely to achieve decarbonisation of an asset. To bridge the gap, many owners are looking to property managers to implement on-the-ground innovative solutions.

This often begins with identifying willing occupiers who are eager and engaged to collaborate. By fostering these relationships, property managers can act as catalysts for implementing decarbonisation initiatives that benefit all parties.

The property manager’s role is clearly an important lever in aligning occupiers’ and owners’ ambitions on decarbonisation. However, it is mainly the larger better-resourced property managers driving this forward. More could be achieved if the tools and education flowed better through the sector, which is why the C Change OOCOP is focused on finding and scaling solutions.

The role of the C Change Owner Occupier Community of Practice

The ULI C Change Owner Occupier Community of Practice was established to identify opportunities to decarbonise occupier space. It brings together experts from occupiers, owners and service providers to challenge current norms and collaborate on finding solutions that can reduce emissions at scale.

Get involved!

If you are a real estate practitioner that can contribute to this topic with the owner/occupier perspective in mind, then we would like to hear from you. Please contact [email protected].