What is the Impact of Non-domestic Building Tenure on SME’s Energy Efficiency?

The role non-domestic energy consumption plays in the emission of carbon is generally accepted by UK politicians, the general public and industry. In turn, the improvement of non-domestic energy efficiency is commonly considered to be the most cost-effective means to reduce carbon emissions. However, despite widely available cost effective, energy efficient interventions that could financially benefit both non-domestic landlords and tenants, these have not been adopted as rational economic business performance would expect; energy inertia prevails.
Financial split-incentives of non-domestic building tenure have been proposed to explain this. However, financial split-incentives present a limited view of the impact of non-domestic building tenure; one which could have been overcome through the rational economic drivers of current energy policy. This paper suggests the continuation of energy inertia has other drivers and proposes the impact of non-domestic building tenure is wider in scope than previously expected and extends beyond landlords’ and tenants’ financial decision making.
The paper presents findings related to the impact of non-domestic building tenure taken from a wide-ranging study of energy behaviours within UK SMEs. Findings suggest the impacts of non-domestic building tenure are influential beyond financial considerations for non-domestic landlords and tenants. This new understanding of the impacts of non-domestic building tenure, including the power and influence of practical and attitudinal barriers from landlord-tenant relationships, contractual constraints and ownership concerns, may inform energy policy in overcoming energy inertia and reducing SMEs’ expenditure on energy.