Smashing the Split Incentive

The 2018 National Sustainability in Business Conference will be held on Thursday 8 and Friday 9 March at the Hotel Grand Chancellor, Brisbane.

Mr Axl Driml, Principal Sustainability Manager at the Department of Housing and Public Works in Brisbane joins us at the conference to discuss ‘Smashing the Split Incentive’.

The Department of Housing and Public Works (the Department) manages a portfolio of just over 1,000,000 square meters of owned and leased office accommodation on behalf of the State of Queensland and has a history of leadership in sustainability initiatives.

Nationally, the property sector accounts for around 40% of the nation’s greenhouse gas emissions, and is seen as low-hanging fruit in the quest for carbon abatement.

The Department is currently fulfilling a policy objective of improving the average NABERs Energy rating across both the owned and leased portfolios.  For buildings we own, we use capital works funding to target the worst performing buildings.

However, with leased properties, our opportunities are limited.

With buildings that we have long leases on, or those that are performing moderately well, the issue of split incentives has been a consistent inhibitor of energy improvements.  With the Government as tenants, paying the power bills for lighting and tenant power, and the landlord owning the light fittings, there has been no incentive for Landlords to make energy improvements, purely to benefit the tenants.

Fortunately, the Department was introduced to CitySmart and the T3 Initiative.

The T3 Initiative was devised by CitySmart, an agency of the Brisbane City Council.  The CitySmart Team is a social enterprise collaborating with community, industry and government to drive greater sustainability outcomes for cities and regions.

Under a simple structure, the Department entered an eight-page landlord to tenant agreement to surrender part of the anticipated savings for a fixed period of time to help the owner finance environmental upgrades.  Under the agreement, there are no ongoing reporting and review requirements.  The Department anticipates a 75% reduction energy use in the buildings lighting and have high quality LED with individual controls per fitting and saved money in the process.

For more information on the 2018 National Sustainability in Business Conference and to secure your spot today, please visit the conference website.


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