At the U.S. Climate Change Conference (COP26) in November last, India announced a target for net-zero carbon emissions. Speaking at the summit, Prime Minister Narendra Modi said India would aim for net-zero carbon emissions by 2070.
Since then, there have been debates on whether the country can fulfil the commitment. India, the third-biggest polluter globally, is still largely dependent on fossil fuels. The demand for energy and other raw materials will rise sharply as the country’s economy progresses.
The government is probably focussing first on the power sector. The Prime Minister said that India will expand its renewable energy capacity to 500 gigawatts by 2030, and around 50% of its energy needs would come from renewable sources by then.
To achieve the desired result, the government must increase focus on the built environment because buildings and construction are responsible for 37% of the global carbon dioxide emissions (in cities, it is as much as 60%-70%) and 36% of the energy consumption, according to the 2021 Global Status Report for Buildings and Construction by Global Alliance for Buildings and Construction. Hence, the government should focus on materials used in the construction value chain and emissions from existing buildings. The sooner we put measures to lower emissions and decarbonise the buildings and construction industry, the better are the chances to achieve the target.
The shift has begun
Developers in the commercial office segment have already started focussing on reducing emissions. They are getting green building ratings and certifications as tenants demand sustainable workplaces. Many leading corporates are putting in roadmaps to achieve net-zero emissions. Occupying green offices is one of the essential parameters of their roadmap. If the landlords don’t offer green buildings, they will lose out on big clients.
The Navi Municipal Corporation headquarters, which has a gold ranking from the Indian Green Building Council. | Photo Credit: special arrangement
One of the key drivers for companies to think about sustainability is their employees. According to JLL research, seven in 10 workers believe that sustainability initiatives are a must for businesses today, and companies should follow sustainable business practices. Younger employees (21 to 30-year-old) want to work for organisations focussing on sustainability. If companies want to attract and retain talent, they must reduce carbon emissions and focus on sustainability.
Besides offices, there’s a growing requirement for green warehouses, manufacturing units and energy-efficient data centres. Global companies, which are close to or have achieved net zero carbon emissions, are driving the demand.
In existing buildings, the owners have opted for retrofitting — that is, installing equipment and technology that reduces the building’s carbon emissions and implementing water and waste management solutions. The Indian Green Building Council — a body that certifies green buildings — has 7,128 registered projects with an eight billion square feet green building footprint.
Going green is also financially beneficial for developers and building owners. According to another global study by JLL, buildings with green certifications result in a 6% rent premium and a 7.6% sales premium.
More to be done
To decarbonise the built environment, we need to go beyond ratings and certifications, which should become a norm in the future as more than half the buildings that will exist in 2040 are yet to be built. We need to explore alternative materials and ways to decarbonise cement and steel and reduce embodied carbon. Existing building stock needs to be upgraded and require efficient operations and measurable performance.
All stakeholders in the value chain need to collaborate for a sustainable future. They also need to partner to develop common standards and share research and development resources.
If occupiers don’t demand sustainable spaces, there’s not much financial incentive for developers to focus on green buildings at present. The local and central governments need to introduce policies that make it attractive for developers to construct green buildings.
Many investors are willing to fund green projects. But there are limited large-scale projects that are centred around sustainability. Developers and corporates need to explore options that are of interest to investors and lenders. Financial institutions, too, need to make funds available at cheaper rates if a developer undertakes green projects.
Decarbonising the built environment will not only mitigate the climate change risks — city submersions, population displacement, floods, droughts — but will help drive economic growth. Many studies show that frequent extreme weather events can severely hamper a country's economic prospects.
Upgrading to a sustainable built environment could be expensive in the short term for countries and corporates, but numerous reports show that it adds to the GDP (gross domestic product) and business growth in the long run. According to the Organisation for Economic Co-operation and Development (OECD), tackling climate change could add 2.8% to GDP in G20 countries by 2050.
The actions that we take in this decade will decide the course of our future on this planet. If we continue with business as usual, we could end up irreversibly changing the planet’s ecosystem. If there was ever a time to take bold and decisive steps towards a net-zero action plan, the time is now.
The writer is Managing Director, Work Dynamics, West Asia, JLL.
