Sustainability has become a top priority for businesses worldwide, with particular emphasis on achieving net zero carbon (NZC) commitments. The built environment, responsible for nearly 40% of global carbon emissions is crucial for reducing carbon emissions. Hence, ‘responsible real estate’ plays an important role in helping organisations achieve their ambitious decarbonisation goals. In this article, we delve into the key sustainability trends shaping the real estate industry in India.

Green certification: from competitive edge to de-facto requirement

The Indian real estate market is embracing sustainability, as evidenced by the increasing availability of green-certified office spaces.

Figure 1: Green-certified office stock (mn sq ft)

Source: JLL Research, Q1 2024

However, green spaces are only the first step towards decarbonising real estate. In the near future, leasing in green-certified office buildings will no longer be a differentiator but a mandatory requirement for prominent occupiers.

Figure 2: Occupiers with 100% green-certified portfolios in Asia

Source: JLL survey with CRE decision makers in India

Organisations will reevaluate the sustainability credentials of their office premises during lease expiry events, leading to a need for more suitable spaces and increased competition among occupiers. It is crucial for organisations to strategically assess their portfolios and take timely action to stay ahead of the curve.

Responsible leasing: towards building performance data and active collaboration with landlords

The next logical step is responsible leasing, marked by collaboration and transparency between landlords and occupiers. The green lease contract will be an important instrument to warrant transparency in building performance data and ensure active mission-aligned collaboration between landlords and occupiers throughout the lease term. Although India has witnessed a significant increase in the adoption of green leases, there is still a long road to travel on the green lease continuum.

Figure 3: Share of green leasing in overall office leasing market in India

Source: JLL Research, CRE Matrix

According to a JLL survey with CRE leaders, one in every two occupiers in India considers signing a green lease agreement over the next three years as a top sustainability priority. 

Technology & AI to be critical in achieving decarbonisation goals

It is not possible to manage what you can’t measure. Organisations need to ensure that they possess data to precisely measure and control their environmental footprint and vulnerability to climate-related risks. As data becomes increasingly important, driven by stricter reporting requirements, current technology and data capabilities will require an upgrade.

Sustainability technology will receive the largest share of technology investments over the next three years. Organisations that act now to improve their technology and data capturing capabilities will be well-equipped to efficiently execute decarbonisation and resilience strategies across their portfolio.

Outlook

It is becoming increasingly evident that companies need to go beyond making sustainability commitments and take tangible actions. They must adopt a proactive approach to sustainability, integrating it into their business operations and decision-making processes. A shift in mindset is required – from concerns about the cost of establishing a green portfolio to considering the potential costs if these investments are not made. Occupiers must embrace innovation and leverage cutting-edge technologies to reduce environmental impact and enhance workplace quality. By doing so, occupiers can contribute to a greener future, boost their brand reputation, attract and retain talent, and ensure long-term business resilience.

Subscribe

Login

Notify of

new follow-up comments new replies to my comments

Label

Name*

Email*

Website

Company

Δ

Label

Name*

Email*

Website

Δ

0 Comments

Inline Feedbacks

View all comments