Why Companies Rent Green: CSR and The Role of Real Estate

Nils Kok, Piet Eichholtz and John Quigley

ERES from European Real Estate Society (ERES)

Abstract: We conduct a quantitative study to explain why firms lease commercial office space in buildings with a green label ñ as this implies paying a rental premium. Based on a literature review, we construct a theoretical framework of drivers underlying corporate social responsibility. We formulate five propositions that explain why specific industries may be more willing to lease green. Then, we test these propositions using a sample of 11,000 unique tenants in approximately 5,000 office buildings, of which 1,100 buildings have a green label. We find that corporations in the oil and banking industry, as well as government-related organization, are among the most prominent green tenants. The empirical analysis shows that tenants in these industry groups are significantly more likely to rent green office space.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2009-01-01
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2009_176

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