India is a key stakeholder in the current wave of theglobal shift towards sustainability and the growing awareness in real estate is propelling the nation towards a net-zero future with year 2024 signifying some major landmarks.
The real estate sector, one of the major contributors to GHG emissions, is undergoing a conscious and profound transformation to attain carbon neutrality. A notable surge in green building certifications, renewable energy integration, and the use of sustainable materials has been reshaping the sector. Adoption of sustainability at the asset level includes integrating sustainable design and construction practices, reducing wastage, enhancing energy and water efficiency, ensuring ethical supply chain management, and improving indoor environmental quality. Moreover, certified green buildings enjoy an average of 10-15 per cent premium over non-certified ones.
While the growing number of certified green buildings highlights the shift towards sustainability, the impact of this transformation is particularly evident in the commercial office segment, where demand for energy-efficient, environmentally conscious spaces continues to shape market trends and leasing activity.
There has been a rise in green-certified office buildings, with 67 per cent of India’s Grade A spaces now certified. Over 150 million sq. ft. of new developments are set to achieve green certification in the next two to three years, pushing the total to over 600 million sq. ft.
2024 Key Sustainability Highlights
The penetration of green-certified office stock has increased from 39 per cent in December 2020 to 56 per cent in 2024.
On 28 February 2024, the RBI issued draft guidelines on ‘Disclosure framework on climate-related financial risks, 2024. The framework mandates disclosure by Regulated Entities (REs) on four key areas of governance, strategy, risk management metrics and targets.
Green Homes
In the past five years, demand for green homes in major Indian cities has grown by 30 per cent. Middle-income residents in Tier I cities are willing to pay 5-10 per cent more, while companies are investing up to 15 per cent extra in green-certified buildings.
Projected compound annual growth rate (CAGR) of 20 per cent over the nxt half-decade. However, less than 10 per cent of buildings in India are certified green, indicating a significant gap that needs immediate attention.
Among all states, Hyderabad is emerging as a key player in the green real estate market, currently with 246 residential green building projects. In line with growing demand for sustainable living, the city is planning to develop an additional 75,000 green buildings over the next two years.
India’s real estate sector is at an inflection point in its pursuit of sustainability. To achieve a greener future, industry must prioritize the adoption of energy-efficient building practices, renewable energy integration, and sustainable materials.
Accelerating green certifications, across residential, commercial, and industrial projects is essential for meeting net-zero goals by 2070.
The regulatory support, through frameworks such as SEBI’s BRSR and the RBI’s climate-related disclosures, can guide developers in aligning with global sustainability goals.
Additionally, scaling renewable energy installations and optimizing resource management in construction will be crucial in attaining sustained growth of the sector.
In conclusion, India’s real estate sector stands at the cusp of a transformative journey toward sustainability, driven by government policies, green certifications, and a growing demand for eco-friendly developments.
By fostering collaboration between developers, policymakers, and financial institutions, India can create a resilient real estate ecosystem that not only mitigates environmental impact but also enhances economic growth and social well-being with a significant multiplier effect all along the line.
As modern homebuyers prioritize sustainability over aesthetics, real estate experts predict a significant increase in demand for green homes in India in 2025
