Sustainable Real Estate

This academic year, I am teaching courses like Sustainable Real Estate, Social Values in Placemaking, Research Methodology, Geoinformatics and Spatial Analysis, Local Area Plan Studio, History of Architecture, and Basic Design Studio. For the coming semester, I am researching extensively on these two courses: Sustainable Real Estate (MBA-Real Estate Course) and Social Values in Placemaking (Master of Urban Planning Course). So, I decided to write two articles dedicated to each subject. So, this article is about 'Sustainable Real Estate'.

In order to understand 'Sustainable Real Estate', it is very important to gain insights into the following questions:

1. What is Sustainable Development, and how are different countries aligning themselves to fulfil Sustainable Development Goals (SDGs)?
2. What is the role of the construction industry and big infrastructure projects in SDGs? What are the implications of such projects on the environment?
3. How to assess the impact of such projects and evaluate the efficiency of buildings and projects?
4. How do we understand and look at the future of Sustainable Real Estate?

I read papers and tried to find the courses offered across the world about Sustainable Real Estate, and to my surprise, there is no course on Coursera, Udemy, or NPTEL regarding Sustainable Real Estate. There are courses on sustainable development, agriculture, architecture, and green buildings, but nothing covers the assessment and management side of the projects. I deep-dived more and searched for keywords on this particular topic like 'Sustainable Real Estate', 'Sustainable Infrastructure', 'Sustainable Buildings', etc. My research led me to the ESG wings of all the big construction and consultancy companies, and most of this was in relation to the Energy sector only, while other resources like water, land, minerals, landscape, etc., were completely missing from the picture. Therefore, I came to know that along with finding an answer to the above questions, we also need to know what ESG is and how it fits into the structure of Sustainable Real Estate.

So, below is the brief (definition and scenario) about ESG, Sustainable Development, and the Real Estate market, especially in the context of India:

Environmental, Social, and Governance (ESG)

In India, Environmental, Social, and Governance (ESG) considerations have emerged as integral factors shaping corporate behaviour and investment decisions. With a growing emphasis on sustainability, companies are increasingly integrating ESG principles into their business strategies. Environmental consciousness aligns with India's commitment to addressing climate change and promoting green initiatives. Social responsibility is gaining prominence, fostering inclusive practices and community engagement. Moreover, robust governance practices are becoming paramount, promoting transparency and ethical conduct. As India's corporate landscape evolves, the incorporation of ESG criteria is not only seen as a measure of responsible business but also as a driver for long-term resilience and value creation.

Sustainable Development and SDGs

Sustainable development is a holistic approach that seeks to meet the needs of the present without compromising the ability of future generations to meet their own needs. It entails balancing economic, social, and environmental considerations to foster long-term well-being and resilience. Sustainable development encourages responsible resource management, the promotion of social equity, and the preservation of ecological integrity. By integrating economic growth with environmental stewardship and social inclusivity, sustainable development aims to create a harmonious and enduring balance that benefits both current and future generations, fostering a world where prosperity coexists with environmental health and social justice.

The Sustainable Development Goals (SDGs) are a set of 17 interconnected global objectives established by the United Nations to address pressing challenges and achieve a more sustainable future by 2030. These goals encompass diverse areas, including poverty eradication, quality education, gender equality, clean water and sanitation, affordable and clean energy, and climate action, among others. The SDGs serve as a universal call to action, encouraging nations, businesses, and individuals to work collaboratively to build a world that is socially inclusive, environmentally resilient, and economically equitable. As a blueprint for shared global responsibility, the SDGs aim to leave no one behind, fostering a collective commitment to creating a better and more sustainable world for present and future generations.

Real Estate Scenario in India

Real estate is a significant contributor to India's economy, contributing both directly and indirectly to the Gross Domestic Product (GDP). The real estate and construction sectors together have been estimated to contribute around 6-8% of India's GDP, according to various reports. The real estate sector includes residential, commercial, and industrial segments, each playing a role in economic growth. Additionally, the sector has linkages with several other industries, such as cement, steel, and manufacturing, which further amplifies its impact on the economy.

The growth of real estate is often seen as a reflection of economic development and is closely tied to factors like employment generation, infrastructure development, and overall consumer confidence. Market fluctuations and challenges in the real estate industry can have a cascading effect on related sectors, impacting the overall economic landscape. Therefore, the real estate market in India is closely monitored as a barometer of economic health and vitality.

In 2021, housing sales in major cities, such as Mumbai and Bangalore, witnessed a rebound, reflecting a recovery from the impact of the COVID-19 pandemic. Affordable housing continued to be a key driver, with various government initiatives supporting this segment. Additionally, the commercial real estate sector demonstrated stability, with the demand for office spaces gradually increasing.

Need for Sustainable Real Estate

Real estate significantly influences the environment and sustainability through its extensive resource consumption and environmental footprint. The construction and operation of buildings contribute to energy consumption, greenhouse gas emissions, and depletion of natural resources. Traditional construction materials and practices often result in substantial waste generation. Beyond resource consumption and waste generation, the construction industry has additional negative impacts on the environment. Deforestation and habitat destruction often accompany large-scale construction projects, leading to biodiversity loss and disruption of ecosystems. The extraction and transportation of raw materials, such as concrete and steel, contribute to carbon emissions and air pollution. Construction activities can also lead to soil erosion and water pollution, impacting nearby water bodies. Furthermore, the urban heat island effect is exacerbated by extensive concrete and asphalt surfaces, influencing local climates. Additionally, improper disposal of construction waste poses a significant environmental threat.

These negative aspects highlight the urgent need for sustainable practices and innovations within the construction and real estate sectors to minimize their adverse effects on the environment. The industry is increasingly embracing sustainable building practices, incorporating energy-efficient designs, eco-friendly materials, and renewable energy sources. Green building certifications, like GRIHA, LEED and BREEAM, promote environmentally responsible construction. Sustainable real estate developments prioritize energy efficiency, water conservation, and waste reduction, mitigating the sector's negative impact on the environment. As the industry continues to adopt eco-friendly practices, real estate plays a crucial role in fostering a more sustainable and environmentally conscious built environment.

Key Drivers, Benefits, and Challenges

The major question arises, "Is it being practised in order to improve the environment and well-being of people?"

In an era where environmental consciousness and social responsibility are at the forefront of global priorities, the real estate industry needs to undergo a transformative shift towards sustainability. Some key drivers, benefits, and challenges of sustainable real estate are mentioned below:

Key Drivers

1. Environmental Impact Assessment
2. Economic Incentives like rebates and tax incentives
3. Regulatory compliances to push industry to adopt sustainable practices

Benefits

1. Cost Savings
2. Enhanced Market Value
3. Improved Indoor Quality and Environment

Challenges

1. Upfront Costs
2. Lack of Standardization
3. Changing Mindset

Conclusion

Sustainable real estate is no longer a niche concept but a fundamental aspect of responsible and forward-thinking development. As we navigate the challenges of urbanization, climate change, and resource scarcity, the real estate industry plays a pivotal role in shaping a sustainable future. By embracing eco-friendly designs, innovative technologies, and socially responsible practices, stakeholders in the real estate sector can contribute to building a better world—one sustainable structure at a time. Together, we can create a legacy of environmentally conscious and socially responsible real estate for generations to come.