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SEBI for green buildings: A game-changer in Indian real estate

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sarthak borkar

Sarthak Borkar

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`Sustainability' is the watchword for the occupiers, investors, and developers in Indian real estate at the moment. All this is taking place due to the recently introduced sustainable development guidelines by SEBI. According to Colliers, the leading firm in real estate consulting, the latest SEBI norms were one of the major reasons that accelerated the pace of adopting eco-friendly infrastructure at least across the nation.

The Business Responsibility and Sustainability Reporting (BRSR) framework has ensured that SEBI puts a compulsion on listed companies to make adequate disclosures regarding their ESG practices. This compulsion would ensure that businesses, which are obligated to practice sustainability, report their environmental impacts. Owing to this fact, green buildings would not be a luxury or a niche anymore but an inherent part of the real estate industry. The developers now engage in building design and construction that meets the international standards of sustainability, not because they have to keep up with the regulatory requirements but because it satisfies the demand for consumers and investors.

The effect of the SEBI directive can be seen both on the commercial and residential fronts. While corporate occupants are seeking eco-friendly office spaces, the residential buyers also show the need for energy-efficient houses.

This makes the green buildings highly appealing and benefit with a reduction in energy consumption, less water usage, and wastes. Most of the time, green building-certified buildings earn better rental incomes compared to non-green buildings, all things being equal. In most cases, they also obtain higher occupancy rates, thus being a high-profit investment option for developers and real estate investors. This is considered a shift toward sustainable building that will lower the carbon footprint of the sector and hold high in the country's sustainability agenda. Exactly this momentum in green buildings underlines the relevance of ESG strategy for any business aimed to compete.

These emergent trends now create a special opportunity for MBA students and future leaders in the field to learn about and influence the changing dynamics in real estate toward more sustainable business practice. The green building revolution, in response to the SEBI sustainability reporting requirement, marks an important leap toward bringing the industry of real estate up to international environmental standards. As companies progressively come to terms with the long-term benefits of investing in sustainable infrastructure, the demand for green buildings will surge, hence making sustainability all but a given base for any future growth within the industry.

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