Between 2022 and 2023, nearly 600 public companies in the US relocated their headquarters.  That might not sound like an enormous figure, but it marked the greatest year-on-year increase in over a decade, and the number only continues to rise. 

Economic pressures and a widespread demand for hybrid working models have pushed many businesses to streamline their office spaces to better reflect their teams’ in-person needs better, and the growing emphasis on environmental, social, and governance (ESG) performance adds further complexity to this shift. Flexible office spaces meet the practical needs of start-ups and shifting corporate structures, but those that care about the broader impact of their footprint need to know how to distinguish buildings that align with their responsibility goals from those that will only undermine them. 

Though legal ESG requirements and enforcement vary by state, knowing which questions to ask can help ensure your operations align with your socially conscious objectives.   

1. Environment and governance questions 

The goal of environmental questions should be to find measurable performance indicators of sustainability. Ask about:

• The EPC certificate – An Energy Performance Certificate outlines how efficient the building’s heating, lighting, electricity usage, and insulation are. While you can, as a tenant, implement energy-saving measures that minimize your business’s power bill and environmental impact, doing so in a property with a poor EPC rating is the equivalent of building upon a rotten foundation. 
• Additional certifications – BREEAM (Building Research Establishment Environmental Assessment Method), LEED (Leadership in Energy and Environmental Design), and the WELL building institute each cover areas not present in an EPC grade. 
• Renewable energy – Many flexible office spaces across the country use some amount of renewable energy, with some meeting the US Department of Energy’s Zero Energy Building threshold. 
• Transparency –  Does the building’s management share consumption figures with tenants? 

Major cities scrutinize ESG requirements very closely. Flexible office spaces in New York, for example, must be mindful of Local Law 97, which limits carbon emissions of buildings over a certain size, with stricter requirements set for 2030. 

2. Scope 3 emission reporting 

Scope 3 emissions include the upstream impacts of a company’s entire supply chain and value chain and are reported to be 26 times higher than standard operational emissions. They’re often the most difficult to measure. Because energy use is often bundled into service agreements, flexible office spaces can exploit the Scope 3 grey zone to hide the majority of their carbon footprint.

Before renting a flexible office space, you want to find out if a building has the means to record its Scope 3 emissions by asking about:  

• Carbon accounting methodologies – Do they estimate based on spending or activity? Can tenant-specific emissions be allocated? 
• Utility reports – Are waste, water, and recycling metrics available? 
• Shared spaces – How are communal areas and conference rooms factored into emissions calculations? 

As mentioned, Scope 3 emissions cover a large and often poorly documented segment of business operations. The more tertiary areas covered in reports, the less guesswork there is in ESG disclosures. 

3. Social impact

The ‘S’ in ESG covers sustainability measures that impact health and productivity. Buildings that truly support their tenants should prioritize meaningful design over amenities, so ask about: 

• Air quality – Have toxic vapor, fume, and vape sensors been installed? Are windows adequate for air circulation? Is care taken to minimize dust and allergens? 
• Inclusive design – Are offices wheelchair accessible? Do signage and emergency alarms cover common languages for the area, or braille text? Doors, lighting, and noise levels all factor into accessibility, so inquire how the building addresses each. 
• Security – How is access governed? How far can a non-tenant get into the building without temporary credentials? The health and mental well-being of flexible workers depend on secure office spaces. 

Flexible office spaces appeal to an increasingly hybrid workforce. Though the space can feel like a middle ground between home and a full-time office, they still expect and deserve a workplace that puts their productivity, satisfaction, and health above all else.

ESG due diligence for renting a flexible office space

Before signing a lease, businesses need to ascertain whether a flexible office takes their ESG commitments seriously or only uses them as a marketing slogan. These questions tell you what you need to know about their current emissions and social responsibility, and open the door to discussions about future readiness and willingness to evolve. 

Digging into an office space’s ESG performance is about more than saving on utility bills. Having a base of operations that reflects your social and environmental goals signals to staff, customers, and investors that your business actions are intentional and carefully considered.