Modern-day consumers are progressively becoming conscious of their purchase decisions, particularly high-value real estate investments, and are opting for companies that are proactive and clear about their green manifesto
As India, a leader in green buildings, has set ambitious goals towards achieving a net-zero carbon economy by 2070, decarbonisation of real estate assumes critical importance. Furthermore, the accelerating momentum for green growth, emphasised through green energy announcements this year, play a key role in establishing India as a leading player in the global green energy market.
Globally, the realty sector accounts for nearly 40% of the world’s energy consumption, 30 percent of raw material use, and 33% of the related global greenhouse gas (GHG) emissions. Climate transition has not only created new possibilities for realty players to re-evaluate their environmental, social, and governance (ESG) commitments and future-proof their portfolios but also bring opportunities that help create fresh sources of value.
Keeping up with India’s green growth journey, the successful adoption of net zero buildings at a large scale can prove to be a judicial approach. With this, we can not only mitigate the impact on our surroundings, but it can also help maximise the economic performance of these buildings.
The adoption of net zero targets by the real estate industry can have a number of benefits, including:
Reduced greenhouse gas emissions: This can help to mitigate climate change and improve air quality
Lower energy costs: Net zero buildings are more energy-efficient, which can lead to lower energy costs for owners and tenants
Higher rents and lower vacancy rates: Net zero buildings are often more attractive to tenants, which can lead to higher rents and lower vacancy rates
Real estate developers play a pivotal role in bringing the net effective green-house gas release to zero. Their buildings can utilise renewable energy through on-site generation via rooftop solar and miniature wind turbines, as well as through dedicated off-site solar, wind, and hydro plants.
Developers need to place a strong emphasis on a multitude of considerations such as local climate patterns, sun-path diagrams, wind patterns, rainfall, and temperature ranges to gain a comprehensive understanding of the prevailing environmental conditions at the time of inception.
These factors serve as the key parameters for the building designs and allow developers to utilize solar-passive and biomimicry design principles to create efficient green buildings. Apart from location, orientation, design, and climate, these buildings need to be technologically adept with a combination of LED lighting systems, smart occupancy sensors for temperature control as well as IoT-based energy management system to optimise everyday usage.
By seamlessly combining environmental awareness and technological prowess, real estate developers need to drive the transformation towards Net Zero buildings, which not only contribute to a greener future but also serve as beacons of eco-conscious living.
However, there are several challenges that the real estate industry will need to overcome in order to achieve net zero targets. These challenges include:
The upfront cost of adopting net zero technologies: Net zero technologies can be more expensive than traditional technologies. However, the long-term savings can offset the upfront costs.
The lack of awareness of net zero targets: There is still a lack of awareness of net zero targets among consumers and investors. This can make it difficult to market net zero buildings.
The lack of government support: There is currently a lack of government support for net zero targets in India. This can make it difficult for developers to adopt net zero targets.
Despite these challenges, the real estate industry has a major opportunity to drive India's green growth journey by adopting net zero targets. By taking on these challenges, the real estate industry can help to create a more sustainable future for India.
Furthermore, real estate developers who are willing to take on the challenges of net zero will be well-positioned to succeed in the years to come. They will be able to attract tenants and investors who are increasingly concerned about the environmental impact of their investments. They will also be able to differentiate their buildings from the competition and command premium rentals.
Therefore, to accelerate action, greater collaboration is required across a range of stakeholders, including policy makers, urban planners, architects, construction companies, material suppliers, utility companies, developers, and investors.
It took the human race decades of rapid infrastructural development and years of marketing higher aspirational goals for the buildings and construction industry together to account for 40 percent of global final energy use and 39 percent of energy-related carbon dioxide emissions. It is going to take at least a few decades if not more to:
Firstly, creating awareness about its viability thus, leading to reduced cost
Secondly, compensating for years of ecological impairment by integrating and mandating sustainable design practices right from inception in upcoming infrastructure projects
Thirdly, accelerating its adaptability by inviting support from financial institutions to create opportunities and new financial products to incentivise the builders
Modern-day consumers are progressively becoming conscious of their purchase decisions, particularly high-value real estate investments, and are opting for companies that are proactive and clear about their green manifesto
As the emphasis on decarbonisation continues to intensify, it’s important to chaperon the prosperity of every stakeholder across the chain and continue to reduce the environmental impact from the start of a project life cycle.
(Dushyant Ahuja is VP Asset Management (India) Tata Realty and Infrastructure Ltd.)