According to various estimates and research, India’s population is expected to cross 1.5 billion in two decades from now. By 2040, China may have surpassed US as the world largest economy and India will be around USD 10 trillion. Climate change will be a more visible threat and will be evident by famine, floods, food shortages and existential threats to Island nations and costal cities.
We are sitting on the cusp of time, that requires tectonic transformation in our economic activities, to avoid the impending disaster. Global cost of this disaster caused by manmade calamity may run into trillions of USD.
We can start directing our energies and resources towards every single pocket of economic activity, that is significant and plays vital role in the solving the issue. Green Building is one key area of the required reform. Old buildings are increasingly failing to meet the green consciousness of the societies around the world. Most of the commercial real estate in India is old and non-energy efficient. This requires a massive change and transformation. The buildings of future need to build on reduced carbon footprints parameter. This includes reduced consumption and recycling of water, enabled with renewable energy, build on energy efficient structures and eco friendly material.
Green building markets are yet to gain grounds in India. According to estimates of International Finance Corporation, Green Buildings provide a massive investment opportunity of approx. USD 1.5 Trillion in commercial as well as residential sector. There is an urgent need to ensure the availability of long-term financing on a sustainable basis, for a smooth transition to a low carbon economy. Green financing is one such answer. Green Bonds which started just one and half decade earlier, are increasingly becoming a global phenomenon. What differentiates Green Bond from a regular debt, is the element of purpose and usage. Green Bond are committed to be used for green projects. India’s green bond market is growing, thanks to slew of policy measure by the Regulator and Government.
Recently, Ghaziabad Municipal Corporation raised Rs 150 Crores through Green Bonds for building Water Infrastructure. Several large corporates e.g., JSW Hydro Energy, Greenko, UltraTech Cement Ltd are raising money through ESG Bonds/sustainability-linked bonds (SLBs), which are essentially green in nature. We have a clear-cut traction in fund raising in energy sector. We may soon see the similar traction in urban infrastructure financing.
Reasons for changes are not country specific. There is an increased investor focus on sustainability investing, which is evident by an increase in total assets and inflows in sustainable funds. Mitigating climate change impact on Investments by transitioning to Green Buildings, will soon emerge as one of the major global priorities.
Author: Jaya Srivastava
Jaya is an Architect and Entrepreneur and is reachable at srivastavajaya95@gmail.com