By Mr. Harshvardhan Tibrewala, Director at Roha Realty
Global warming has become a major concern today. It has been studied that buildings are a major source of greenhouse gas emissions which have diminished climatic conditions, thus accounting for around 40% of carbon pollution.
Climate change, once a relatively marginal concern for many real estate players, has now moved to the top of the agenda. Globally, real estate is one of the largest asset classes when it comes to the amount of finance invested. Nonetheless, when compared to other assets like stocks, bonds, gold, and crypto, real estate is the most susceptible to adversities related to climate change. The threat of floods, fires and other natural disasters is threatening the global housing and residential real estate business. Environmental experts are convinced that climate change has increased the risk of natural disasters such as floods, hurricanes, storms and cyclones. The real estate sector, in particular the Indian real estate market, is sensitive to climate risk for three main reasons: high exposure to physical risk, high fiscal exposure to the dangers of converting to a low carbon economy and the difficulty of making investments in climate change. adaptation in a situation of uncertainty.
It has been predicted that the period up to 2050 will see the world feel both the physical impacts of climate change and the economic, social and regulatory gaps needed to decarbonise, if no necessary action is taken. These changes have made the important role of real estate leaders in the climate transition urgent. The climate transition not only produces new responsibilities for real estate developers to both increase and sustain their portfolios, but also offers opportunities to generate new sources of value through their green offers.
To combat this problem, real estate investors have recently started investing in net zero commitments, regulators have developed reporting standards, governments have passed laws targeting emissions, and tenants have now begun to demand more sustainable buildings. . At the same time, the acceleration of the physical magnitudes of a fluctuating climate becomes more pronounced as end users are forced to deal with storms, floods, fires, extreme heat and other hazards. It is therefore important that real estate players acquire the necessary capacities to understand the impacts linked to the climate on the performance and value of assets.
Below are the ways in which the Indian property market has moved towards a sustainable future by prioritizing climate risks:
Decarbonizing real estate: The approaching climate change will cause seismic shifts in the Indian real estate sector. This change is sure to alter the requirements of tenants and investors, the value of individual assets and the fundamental approaches to real estate development and operation. Smart real estate players will work ahead of the curve by developing climate intelligence early by understanding the effects on asset values, finding decarbonization opportunities and, most importantly, creating opportunities by supporting the transition.
Efficient houses are the key to sustainability: Net Zero Energy buildings are designed and built with a wide range of energy-efficient features, such as denser walls and triple-glazed windows to allow it to create as much energy from its solar collectors as the residence uses in the past. per year – resulting in a “net” zero energy bill. Energy efficiency measures include design tactics and features that reduce demand loads such as air barrier systems, daylighting, sunlight screening and control devices, the careful selection of windows and finishes, passive solar heating, natural ventilation and efficient water conservation. Resources.
Build houses with highly efficient features: Substantial reductions in emissions associated with real estate can be achieved with positive economics through technologies that are already prevalent. For example, moving towards more energy-efficient lighting systems and installing better insulation tend to have optimistic financial returns while helping to address climate risks. Nowadays, the latest technologies also make low-carbon heating and cooling systems, such as energy-efficient air conditioning and heat pumps, all the more competitive in many markets and climates. These cost-effective home upgrades can help create meaningful change while reducing asset risk.
The real estate segment will not only play a crucial role in determining whether the world decarbonizes effectively, but it will also endure in reinventing the way we live, work and function through these profound physical and financial changes. Thus, this clearly indicates that comfortable, carbon-efficient and climate-resilient buildings are sure to be the most sought-after building types, transforming the real estate market in the years to come.