What we do

The CRC focuses on landlords as they are generally the ones who have the energy supply contract with energy suppliers for their buildings. However, over half of commercial buildings are occupied by someone other than the owner of the building, who use the bulk of energy used in the buildings. Landlords usually receive a bill for their tenants' energy use and then either pass the bill on or recover the amount through the service charge.

Landlords have to work together with their tenants, therefore, to reduce their buildings' energy use, and associated carbon emissions. Our landlord members have been seeking to engage with their tenants for some years for this purpose, with mixed rates of success.

We have put these points to the Government but the unresolved issues we have identified largely remain. There is no way of handling the costs of the CRC in an equitable way between owners and occupiers. Generally existing leases are drafted in a way that can not accommodate the passing of energy costs to tenants through the service charge. This could mean that property owners caught by the CRC may be required to carry the cost of CRC until new leases are formed.

We collaborated with a range of other property industry bodies to produce a revised, second edition of The Carbon Reduction Commitment Energy Efficiency Scheme: A guide for landlords and tenants in August 2010. We set up a pan-industry group to examine key aspects of the CRC proposals, and to explore standardised approaches to dealing with CRC in leases and published a summary of responses and next steps to take in July 2010.

Our landlord members are already beginning to work out what the CRC cost will be to them. It remains to be seen if they can build the relationships with their tenants needed to cut both their CRC costs and their carbon emissions.