BGO's maxim of “E” is for easy, and the “G” is given, but “S” is sophisticated, set out in this Estates Gazette article, is a nice way of demonstrating the different aspects of incorporating ESG into leases. 

Recognition of the sophistication of social drafting in leases was demonstrated in the updated BBP Green Lease Toolkit (released in January 2024) and commented on by my colleague Ed Glass in this article. The Toolkit now incorporates the concept of “Social Impact” which includes initiatives relating to local employment opportunities to a real estate asset and local community engagement. Similar to the “Social Value Charter” that BGO has implemented at its 105 Victoria Street development as mentioned by Alexander Morris in his article. 

The Toolkit's proposed drafting has also reflected the point made by Alexander Morris (see quote below) by weaving in the “Social Impact” references into their existing drafting for environmental factors. For example, the data sharing provision clause includes data about not just environmental performance, but also social impact data. 

A couple of areas where there is potentially scope for further innovation in the Toolkit are:

  1. Alexander Morris's proposal of a service charge agreement where the landlord effectively devises a social or CSR policy linked to its asset's local area which tenants (and landlord) contribute to through the service charge. This could provide an easy way for businesses to meet their own social or CSR targets through the landlord's social initiative.
  2. The potential interplay between environmental initiatives in new developments such as meeting biodiversity net gain requirements and the benefit that such green spaces might have for a local communities accessing nature or being involved in nature (such as community garden, orchard or allotment). 

These innovative ideas would require more sophisticated drafting (and possibly bespoke drafting per development), which further emphasises BGO's branding of “S” in ESG as “sophisticated”.