Scotland’s architecture is rich with history with nearly one in five properties built before 1919, although this can present unique challenges when it comes to energy efficiency. With the ever-increasing focus on ESG credentials, as well as alignment with the Scottish Government 2045 net-zero target, retrofitting older premises has become a critical consideration. Solid stone walls that are challenging to insulate, outdated heating systems, and strict conservation rules can make upgrades complex. Despite these challenges, retrofitting brings opportunities to future-proof your business premises.
By installing insulation and introducing renewable energy systems, sustainable retrofitting delivers multiple benefits, including reduced running and maintenance costs, enhanced environmental credentials, future proofing against changing energy efficiency regulations, and potential increased market value or rental demand. Key considerations vary depending on whether you are an owner-occupier, landlord, or commercial tenant.
Owner-Occupiers
Businesses that own their premises can retrofit their premises as they see fit, subject to complying with planning/local authority regulations, and title conditions that may apply to the property. It is also important to consider consent from the businesses’ lender depending on the depth of the retrofit being carried out.
Commercial Tenants
In addition to the above, commercial tenants may require consent from their landlord (and their lender) before carrying out works. The landlord may be incentivised to agree to the retrofit works if they are likely to increase the overall value of the premises, or rent that could be demanded from a future tenant. Modern commercial leases, often include either mandatory or optional obligations on both the landlord and tenant to co-operate on increasing the energy efficiency of the building. Obligations to co-operate are becoming increasingly important to both parties as the demand for energy efficient buildings continues to rise.
Once terms are agreed, often a formal Licence for Works Agreement is entered into to record the consent, and as a tenant it is important to agree whether or not the benefit of the works will be considered during any future rent increases.
Tenement Buildings
Scotland’s significant portfolio of tenement buildings, from traditional sandstone to modern multi-use office blocks, pose their own unique set of challenges due to the shared nature of the building. Deep retrofits to common parts of the building (such as external or internal wall insulation) require agreement among co-owners, whose interest and financial capacity may vary. Having a property factor can help with negotiations but owners may be required to approach fellow neighbours directly to gain agreement on such matters.
Legally business owners are required to check their title deeds on what work is permissible and whether neighbour consent is required. Where the title deeds are silent or unworkable, the Tenement Management Scheme within the Tenements (Scotland) Act 2004 may be able to provide assistance. Importantly The Climate Change Act 2008 made it easier to install insulation with a tenement building, by deeming it to be seen as a regular ‘maintenance’ activity, instead of an improvement/upgrade that would require 100% consent from all owners. Given the complexity to these matters, professional legal advice is strongly recommended before proceeding.
Funding
It will come as no surprise that one of the biggest barriers to sustainable retrofitting is the initial capital expenditure. However, there is support available for businesses looking to go more ‘green’.
Currently loans of up to £100,000, and cashback grants of up to £30,000, are available from Business Energy Scotland to help pay for energy and carbon-saving upgrades. This can be used for installing renewable heating technologies, improving insulation/draught-proofing, or even upgrading business equipment to more energy efficient models.
In addition to funding, ‘Green Mortgages’ are increasingly commercially available. These unique loans are available for business or premises which meet certain eco-credentials – further reinforcing the long-term benefits of sustainable retrofitting.
A green future
Retrofitting older business premises in Scotland is not without its challenges, but the long-term benefits -from reduced energy costs to enhanced ESG credentials – make it a worthwhile investment. Whether an owner-occupier with full control, a commercial tenant navigating lease obligations, or tenement co-owner with shared responsibilities, understanding the legal and practical position is key to unlocking retrofit potential. With increasing funding options and growing regulatory pressure, now is the time for businesses to take proactive steps toward a more sustainable future.
*Originally featured in The Business on 27 November 2025: Retrofitting Scotland’s commercial buildings: navigating energy efficiency | The Business
