Green building construction offers long-term financial and environmental benefits
With the world changing around us, financial and economic feasibility are not the only metrics linked to any business's success today. Climate, societal and ethical issues have taken center stage due to a combination of events - the COVID-19 pandemic and climate change. For the real estate industry, the spotlight is increasingly on the developer and occupier strategies to deliver net-zero targets and contribute to the larger cause of climate change. As commitments to decarbonize rises, demand for sustainable and green buildings has increased as well in India
- ANSHUMAN MAGAZINE
Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE
What is your view on the concept of green building and its relevance in India?
With the world changing around us, financial and economic feasibility are not the only metrics linked to any business's success today. Climate, societal and ethical issues have taken center stage due to a combination of events - the COVID-19 pandemic and climate change. For the real estate industry, the spotlight is increasingly on the developer and occupier strategies to deliver net-zero targets and contribute to the larger cause of climate change. As commitments to decarbonize rises, demand for sustainable and green buildings has increased as well in India
Which are the major factors that will drive the vision of green/sustainable buildings?
Currently, green buildings are receiving a lot of attention as businesses understand that they can only move ahead with this critical component. As a result, companies are increasingly deciding to develop strategies that account for these factors to give the coming generations a sustainable and green future. Given India's size and population, the climate risks have grown manifold. The country ranks among the 10 most vulnerable nations in terms of climate risks. According to the World Economic Forum, buildings account for nearly 40% of global greenhouse gas emissions and 40% of raw material use. Therefore, assessing and imbibing ESG into real estate and construction is paramount to drive sustainability goals. With countries moving towards achieving net zero emissions targets, operating rules for the real estate sector are expected to become stringent.
How is the Indian real estate industry responding to the green buildings?
In the past five years, we have witnessed a push toward green building. According to our ESG report, the period saw a 37% increase in the supply of certified buildings, with the addition of ~78 million sq. ft. of certified stock, compared with the previous five years (2012-2016). Moreover, developers are now seeking nationally and internationally recognized green certifications such as LEED and IGBC that would be popular among their potential tenants. In terms of the cities, NCR and Bangalore are ahead of the curve and together account for ~54% of the total certified office stock of India.
What are the sustainability practices shaping up in an organized way in building construction and real estate sector in general?
The Central and state governments in India are offering various incentives to promote green buildings under different rating systems. The Government of India (GoI) offers 30% of the installation cost of the rooftop solar panels as subsidy to the institutional, residential and social sectors in most states. In addition, beneficiaries can avail a generation-based incentive wherein they can receive Rs 2 per unit of generation, if the generation exceeds 1,100 kWh-1,500 kWh per year. Further, the surplus power can be sold at a tariff set by the government.
The Government of India, through the Bureau of Energy Efficiency (BEE), launched the Energy Conservation Building Code (ECBC) in 2007 and has developed a rating for existing projects. Until December 2016, 10 states had made ECBC mandatory for commercial buildings through a notification in their state gazettes while another 10states were in advanced stages of making it mandatory.
Few of the initiatives that are being witnessed in the real estate sector are: Zero water discharge with 100% wastewater recycling; Green Building certification; Reduction in energy intensity; and EV-ready infrastructure.
What are the challenges in achieving the goals of green buildings?
Incorporating green building techniques has several advantages, which increases its viability. Implementing of green construction principles is fraught with difficulties despite the advantage of sustainability. It is challenging to completely incorporate sustainable techniques during a building's development because of certain obstacles. Although the initial cost of establishing a green building may be slightly more than that of a conventional one, the long-term advantages make it a great long-term investment for both customers and developers. Due to the rising demand for sustainable construction techniques in the present because of peoples' increased preference for environmentally friendly structures.
How do you foresee the future market opportunities in the concept of green buildings?
Instead of settling for temporary solutions, stakeholders should take control of the decarbonization agenda. Future scalable, efficient, and sustainable living will be significantly impacted by the real estate industry choices today. Green building construction has greater initial expenses, but it also offers long-term financial and environmental benefits, so they shouldn't discourage real estate investors. The real estate sector is driving a transformation to build a robust and sustainable ecosystem for both individuals and the environment as we strive towards a sustainable future. The future of this sector can support sustainability and conservation for many years to come.
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