Specialist UK real estate law firm Maples Teesdale LLP is driving the ESG agenda within the commercial real estate legal sector. It has extensive experience in green lease clauses and ESG issues in planning and construction, and works with its clients to achieve ambitious ESG targets and high-level certifications for a sustainable built environment.

The firm is at the forefront of low-carbon developments having acted as counsel to Bywater Properties on a redevelopment in the London Borough of Lambeth to create London’s very first carbon neutral office (with preliminary research suggesting it will be carbon negative for around 60 years). The design of the building means it will be demountable and recyclable at the end of its lifespan.

Another recent highlight was the team’s advice to the City of London Corporation on a £350 million development project at Stonecutter Court; the scheme sets high ESG targets and aims to achieve BREEAM New Construction 2018 Excellent and WELL Core and Shell Gold certifications.

Anastasia Klein heads up the ESG practice, while another key contact is construction partner Jo Preece, who assists with leading the firm’s ESG committee and has been involved with The Chancery Lane Project.

The firm’s commitment to the Greener Litigation Pledge further demonstrates its efforts to reduce the environmental impact of its operations and beyond.

Maples Teesdale is proud to be at the forefront of ESG in the commercial real estate legal sector with extensive experience in green lease clauses and ESG issues in planning and construction. Both as an occupier ourselves and as legal advisors to owners and occupiers, we have a clear understanding of the impact of commercial real estate on the environment and of the role legal advisors can play in helping their clients achieve their own sustainability and ESG targets.

We are genuinely excited by the opportunities that we have to make an impact on the construction, use and occupation of buildings though our various areas of expertise. We have an active internal ESG Committee and host annual ESG seminars.

Members of our team are involved in the BPF’s Green Lease Clause Working Group and the BPF Net Zero Project as well as the Chancery Lane Project. We participated in RICS’ Annual Dilapidations Conference 2021 and wrote an article on green dilapidations for their members.

We, and some of our clients, were early adopters of green leases. We have since advised on over 300 leases which include provisions covering environmentally friendly tenant alterations and reinstatement; energy, water and waste data collection; and tenant involvement on matters relating to energy, water and waste efficiency. For some clients we also monitor and report monthly on how many of the leases we deal with for them contain these types of clauses.

We have been advising on the implications for our occupier and landlord clients of the Minimum Energy Efficiency Standards which have the potential to make less efficient commercial premises unlettable or undesirable. We have drafted and negotiated lease clauses covering tenant alterations which affect the efficiency of premises, landlords’ ability to do upgrade works, responsibility for upgrade costs and landlord and tenant obligations to ensure premises do not become substandard.

We have also advised on who should be financially responsible for upgrade works in lease renewals carried out under the security of tenure provisions of the Landlord and Tenant Act 1954.

We are signatories to the Greener Litigation Pledge where we commit to take active steps to reduce, with a view to minimising, the environmental impact of our practice in England and Wales, and to the reduction of our emissions in line with the objective of restricting global warming to 1.5°C.

Has your firm established a dedicated ESG/climate change/sustainability practice, team or task force?

As we are a specialist commercial property law firm that reflects the commercial property industry, our whole team is aware of and involved in ESG. For decision making and knowledge collation and dissemination we have an established and committed ESG committee with members from across our business, including support staff and fee earners. This team is led by our Head of ESG, Anastasia Klein. Other key partners in our ESG group are Jo Preece (construction) and John Bosworth (planning). As a practice, we actively collate market intelligence about ESG, we monitor relevant news and legislation and we keep up to date with best practice. We also keep a close eye on legal drafting relating to ESG and green lease clauses to ensure we can advise and cater to the needs of all our clients, whatever their sustainability agenda.

What type of work do you handle in connection with “green change”?

We can advise on all stages of a site’s lifecycle, from planning to construction and letting. We recognise that different clients are comfortable with different “shades of green”, and we tailor our advice accordingly.

Property

We are particularly active in relation to green lease clauses and consider ourselves to be at the forefront of this rapidly developing area of law.

Recently we have been:

• reviewing, updating and adding green lease provisions for a number of clients from institutional funds to developers and operators, with varying appetites from cautious to at the cutting edge of green lease innovation;
• Advising on the implications for our occupier and landlord clients of the Minimum Energy Efficiency Standards;
• Collating a database for green lease clauses and an internal system in place to record any new provisions our teams come across during the course of their work;
• Monitoring and reporting for clients on the number of green leases completed;
• Advising clients on wording for their heads of terms to try to ensure minimal push back on green lease clauses during lease negotiations;
• Advising on incorporation of green clauses into business leases on renewal and reviewing the effect of green legislation on dilapidations recovery; and
• Advising on ESG provisions in agreements for lease and development agreements.

Planning

We recognise that the planning regime is ahead of other parts of the real estate industry in relation to ESG, having included E and S elements in planning permissions for some time. Our planning team has extensive experience of advising on:

• Planning related matters; including Environmental Impact Assessments, Statements of Community Involvement, Habitat Regulations assessments;
• E – carbon neutrality, sustainable locations, water efficiency, nitrate and phosphate impacts and biodiversity net gain;
• S – community engagement, provision of affordable housing / student accommodation, affordable workspace, training initiatives, diversity issues;
• G – demonstrating changing occupier travel habits, evidence of carbon neutrality, monitoring and reporting on energy efficiency.

We advise both developers and objectors in connection with carbon neutrality issues – be it the need to contribute to carbon reduction schemes in order to offset a site’s carbon levels or in terms of objecting to development proposals that have failed to consider retention and re-use of existing buildings.

Construction

We work with clients:

• Advising them on the impact of the UK Green Building Council’s recently launched “Net zero whole life carbon roadmap for the built environment”;
• Discussing the creation and use of carbon calculators;
• Discussing the merits of using carbon benchmarks and KPIs and penalising or rewarding contractors for exceeding or coming in under agreed levels;
• Understanding the use of innovative building materials like cross-laminated timbers, mindful of related insurance issues; and
• Considering the impact of community engagement to achieve successful developments.

We have seen the following used in client’s developments; green roofs and green walls to attract biodiversity; concrete core heating/cooling and air source heat pumps being used on the roof to provide heating and cooling and therefore avoiding the need for traditional gas boilers which are more carbon intensive; enhanced sub-metering to enable occupiers to monitor their electricity and heat consumption; and solar PV panels. We have also had discussions around the use of carbon calculators.

Would you like to highlight a particular area of strength?

We feel a particular area of strength is in relation to our extensive work on green lease clauses. We have a centralised record of green lease clauses that we update constantly, meaning that we can monitor best practice across the real estate sector and can identify trends, including how common clauses are in practice and what is being accepted by owners and occupiers. We are able to ensure that we provide advice to each client that reflects their own goals, aspirations and appetite for ESG. We also recognise that even with the same client, certain sites within their portfolio might require different approaches. We are always conscious that whatever we advise must be acceptable to funders or successors to the original documents.

We have given numerous talks on the topic of green leases, as we recognise that while the term is often used, many of our clients and contacts are not confident about what green leases entail and how they could implement green leases themselves.

We drafted an innovative form of lease for a client that has sustainability at its core, we ensured that, whilst progressive, the lease contained balanced obligations and would still be considered institutionally acceptable. We also led on the green lease clause update for a FTSE 100 company with assets under management just short of £400billion.

Has your firm implemented any internal best practises?

We encourage our team to behave in a sustainable fashion, for example recycling where possible, using reusable cups and printing only when necessary. We have open and regular discussions about what we could be doing better, and we also liaise with our landlord in this respect. We are fortunate to be of a size that enables us to be responsive and to implement change swiftly, as well as having a team that is genuinely interested in sustainability.

Has your firm joined any external ESG-related projects, networks or initiatives?

In relation to the “E” element of ESG, members of our team are involved in the BPF’s Green Lease Clause Working Group and the BPF Net Zero Project as well as the Chancery Lane Project. We participated in RICS’ Annual Dilapidations Conference 2021 and wrote an article on green dilapidations for their members. We are proud to be signatories to the Greener Litigation Pledge.

While often the focus in the legal and real estate industries is on the “E” of ESG we also consider the “S” part. On that basis we work with the East End Foundation, a charity local to our offices on events, from CV and interview training for young people to helping out on local city farms. We identified the Foundation as a charity operating in our community with which we could build a long-term relationship. We are also proud to be founding members of Neurodiversity in Business and active members of Real Estate Balance, Diversity Talks Real Estate. A member of our team is also on the committee of Real Estate Women. We are strong proponents of the need for community engagement and supporters and advocates for diversity and inclusion in both the legal and real estate sectors.

What are your firm’s ESG-related goals?

As a business and as an occupier, our goal is to ensure we remain focused on our behaviours and how those impact on our surroundings. As professional advisers, our goal is to remain at the forefront of ESG related legal work and to be as innovative and forward looking as ESG itself is, so that we can continue to advise our clients. We will also continue to build excellent relationships with ESG professionals within the commercial real estate sector, so that we can understand key trends and confidently advise our clients about best practice.

Is your firm involved in any relevant pro bono work?

Not currently, but we would be very receptive to any such opportunities. Is your firm involved in any public outreach or client education?

Is your firm involved in any public outreach or client education?

We have presented to numerous real estate businesses about ESG, with a focus on planning, construction, asset management and green leases. We seek to share our understanding of ESG and what it means to our clients, so that they can be confident in understanding ESG and what we, as legal advisors can help them with. Our aim is to demystify ESG and to give practical advice. We have also been involved in our own ESG seminars as well as external webinars and events organised by clients and by organisations such as RICS and Bisnow. We see education as a key part of our role in ESG.

Have there been any recent non-confidential stand-out matters that were particularly innovative, pioneering or complex?

We took the leading role in a panel of eminent law firms in updating the green lease clauses for the full suite of precedent leases for a FTSE 100 listed company, with assets under management valued at over £400bn. We implemented a traffic light system with red, amber and green clauses, reflecting their importance to the client; red would be in all leases (and removed only with specific agreement at senior levels), amber being clauses where there is some flexibility for them to be removed or amended and green, being clauses that are much more site specific and may for example tie in with planning obligations. We also prepared related wording to be incorporated in the heads of terms, to reduce negotiation time of the green lease clauses.

When did ESG, climate change and/or sustainability become an area of focus at your firm?

We began to focus on ESG over 5 years ago, when we identified the increasing importance placed on sustainability in society generally. More specifically, we realised that the built environment and landlord and occupier behaviours were likely to become key factors in challenging climate change. We also noted how fast-moving regulations and legislation around this topic were, and how that was likely only to increase. From discussions with our clients, we realised that they knew the acronym ESG, but not what it meant for them, so 4 years ago we started hosting annual seminars for our clients to update them on best practice and to stimulate discussion around the topic. These events have always been well received and very popular, reflecting the appetite of our clients and real estate contacts to learn more about this area.

What has driven your firm’s involvement in a green transition? (Client demand? Business case? Personal attitudes/beliefs/initiatives?)

As commercial real estate specialists, we are closely linked with our clients, so are concerned with what concerns the real estate industry as a whole. We noted that ESG was increasingly important to our clients and that each client has a different appetite for ESG; we have some clients who want to ensure that their documents are institutionally acceptable, but future proofed (as far as possible) for future changes and we have other clients who are at the cutting edge of ESG and have documents containing genuinely ground-breaking provisions.

We also recognise as a responsible business that sustainable behaviours are of themselves a “good thing”, and that they are only going to increase in importance in the years to come. As an employer, we are aware that our own team expects us to behave in sustainable and accountable ways, and that we have a duty to live up to their expectations.

That said, we note that as professional service providers, when pitching for work, or re-tendering to existing clients, it would be rare for the RFP not to contain sections about our ESG and D&I activities. We are pleased that it is no longer acceptable to just present written policies and that clients and potential clients expect service providers to provide evidence that they actually “walk the walk” not just “talk the talk”.

Do you have any strategic plans to expand your work or your initiatives in this area in the future?

Just as the world of ESG is constantly evolving, so is our approach to this field. We often say that what we see as extreme green lease clauses now, used by only the most innovative clients, will become increasingly mainstream.

Where do you see the future of ESG/sustainability in the legal community (both in terms of legal offerings and firms’ best practices)?

We see ESG and sustainability becoming increasingly central to our work, and we anticipate our role as advisors to require us to be up to date with best practice and to be genuinely innovative, understanding our client’s needs and their assets, and ensuring we deliver clear and succinct advice. We will also remain involved in groups within the industry that are driving innovation and progress. As a business ourselves, we will continue to review our behaviours and how we operate.

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