Global warming has become a major concern in present times. It has been studied that buildings are a major source of the greenhouse gas releases that have been declining the climatic conditions, thus accounting for approximately about 40% of carbon pollution.
Climate change, formerly a comparatively marginal concern for many real-estate players, has presently moved to the top of the agenda. Globally, real estate is one of the largest asset class with respect to the amount of finances invested. Nevertheless, when likened to other assets like stocks, bonds, gold, and crypto, real estate is most susceptible to climate change-related adversities. The threat of floods, fire, and other natural disasters threatens the worldwide housing and residential real estate domain. Environmental experts are of the belief that the change in climate has been increasing the peril of natural disasters like floods, hurricanes, storms, and cyclones. The real estate sector particularly the Indian property market is sensitive to climate risk for three main reasons: high exposure to physical risk, high fiscal exposure to the dangers of conversion to a low-carbon economy and the trouble of carrying out overpriced adaptation investments in a situation of uncertainty.
It has been predicted that the period till 2050 will witness the world feel both the physical impacts of climate change and the economic, social, and regulatory deviations needed to decarbonize, if no necessary actions are taken. These changes have brought about a sense of urgency to the significant role of real-estate leaders in the climate transition. The climate transition not only produces new accountabilities for real-estate developers to both augment and future-proof their portfolios but alongside brings prospects to generate fresh sources of value through their green offerings.
To combat this issue, recently, real estate investors have started investing in net-zero commitments, regulators have developed reporting standards, governments have passed laws targeting emissions and tenants have now started demanding more sustainable buildings. At the same time, the quickening the physical magnitudes of a fluctuating climate are becoming more pronounced as end-users are compelled to face storms, floods, fires, extreme heat, and other jeopardies. Hence it is important for real-estate players to build the capabilities to comprehend climate-related impacts on asset performance and values.
Below mentioned are ways by which the Indian property market has been moving towards a sustainable future by prioritizing climate risks:
Decarbonizing real estate:
The approaching climate change will bring about seismic shifts in the Indian real-estate industry. This shift is bound to change the demands of tenants’ and investors’, individual asset values, and the fundamental approaches to developing and operating real estate. Smart real estate players will work ahead of the curve by building climate intelligence early by comprehending the effects for asset values, finding chances to decarbonize, and most importantly by creating opportunities through supporting the transition.
Efficient homes 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 windows that are triple paned to enable it to create as much energy from its solar collectors as the residence makes use of over the course of a year – causing in a zero “net” energy bill. The measures of energy efficiency encompass of design tactics and features that lessen the demand-side loads such as air barrier systems, daylighting, sunlight control and shielding devices, prudent selection of windows and finishing, passive solar heating, natural ventilation and efficient conservation of water resources.
Building homes with high-efficient features:
Substantial reductions in emissions associated with real estate can be achieved with positive economics through technologies that already prevail. For instance, advancing to more energy-efficient lighting systems and installing better insulation tend to have optimistic financial returns alongside helping to tackle climate risks. Nowadays, latest technologies also make low-carbon heating and cooling systems, such as energy-efficient air conditioning and heat pumps, all the more cost competitive in many markets and climates. These cost-effective home upgrades can help in creating meaningful change while also de-risking assets.
The real estate segment will not only play a crucial role in determining whether the world effectively decarbonizes but also will endure to reinvent the way we live, work, and function through these profound physical and financial modifications. Thus, this clearly indicates that comfortable, carbon efficient, and climate change-proof buildings will certainly be the most sought-after types of buildings, transforming the real estate market in the coming years.