Minimizing ecological footprint stands as a crucial objective for businesses globally. Owners, occupants, and enterprises in the commercial real estate sector will have to swiftly create extensive strategies for rapidly decarbonizing their portfolios.
The consequences of climate change are becoming evident, prompting a call for businesses to take an active part in diminishing their carbon impact. There is a growing emphasis on environmentally responsible brands among consumers. Potential employees appear more inclined to join companies that demonstrate sustainability awareness. Governments are committing to carbon reduction goals, while regulators are signalling their intentions to enact legal reforms. Investors are seeking proof of companies’ dedication to prioritizing decarbonization.
In India, the Ministry of Corporate Affairs (MCA) has introduced mandatory annual filings for certain companies that meet specific criteria. The most prominent filing in this context is the Business Responsibility Report (BRR). The top 1,000 listed companies based on market capitalization on the BSE and NSE, as well as companies meeting specific financial criteria will have to file the BRR annually along with the company’s annual report. Failure to comply with the requirement to file a BRR can result in penalties imposed by the regulatory authorities.
The commercial real estate (CRE) sector in India is a major contributor to the country’s carbon footprint. The sector is responsible for a significant portion of the nation’s energy consumption and greenhouse gas emissions.
As India strives to meet its sustainability goals, it is essential to adopt innovative strategies that can help to reduce carbon emissions and improve energy efficiency in the CRE sector. One promising approach is to use a holistic carbon accounting framework. This framework would track carbon emissions across the entire lifecycle of a building, from construction and operation to demolition. By taking a holistic approach, it is possible to identify and address all sources of carbon emissions, from the initial construction of a building to its day-to-day operations.
Digital Twin and IoT solutions can also play a valuable role in reducing carbon emissions and improving energy efficiency in the CRE sector. Digital Twins are virtual replicas of physical buildings that can be used to monitor and analyse energy consumption and performance in real-time. IoT devices can be used to collect data on energy usage, occupancy patterns, and environmental conditions. This data can then be used to optimize building operations and identify opportunities for energy savings.
According to the Global ABC Global Status Report 2021 by the Energy Information Administration (EIA) report, buildings are responsible for a substantial portion of global carbon emissions, accounting for approximately 40% of the total carbon dioxide emissions. This alarming statistic underscores the critical importance of addressing emissions from the building sector to mitigate climate change.
Holistic carbon accounting approach
A holistic carbon accounting approach involves tracking carbon emissions across the entire lifecycle of a building, from construction and operation to demolition. This approach not only encompasses direct emissions but also considers indirect emissions associated with energy consumption, transportation, and supply chains. By accounting for all carbon emissions, real estate stakeholders can develop informed strategies to reduce their environmental impact.
Digital Twin and IoT solutions
Digital Twin technology, coupled with the Internet of Things (IoT), offers a transformative solution for sustainable real estate in India. Digital Twins create virtual replicas of physical buildings, enabling real-time monitoring and analysis of energy consumption and performance. IoT devices gather data on energy usage, occupancy patterns, and environmental conditions, allowing for data-driven decision-making and optimization of building operations.
Predicted impact on India’s G20 goals:
Implementing a comprehensive carbon accounting strategy holds the potential to significantly contribute to India’s G20 goals. By reducing carbon emissions in the commercial real estate sector, India can demonstrate its commitment to sustainable development and climate action, enhancing its global leadership in environmental stewardship.
Companies that fail to decarbonize their operations are at risk of facing significant financial and reputational costs. In addition, they could contribute to global socio-economic and environmental problems.
It is therefore critical for all companies to have a proactive decarbonization plan. This plan should include clear strategies and roadmaps for reducing emissions across all areas of the business, including operations, leasing, and capital expenditure (capex). The plan should also include performance targets that will help companies track their progress and ensure that they are on track to meet their decarbonization goals.
For business leaders and CxOs the cost of inaction is too high. The choice to invest in sustainability within corporate real estate is not just about doing what is right—it is about doing what is strategically imperative. The benefits span across financial gains, reputational enhancement, and the well-being of our planet and communities.
As leaders, it is our responsibility to create a lasting impact, and embracing sustainability within our corporate real estate operations is a pivotal step toward that goal. Let us not miss out on the opportunities that sustainable practices bring. Our decisions today will shape the future of our organizations and the world at large.
Achieving net-zero buildings in India’s commercial real estate segment demands a paradigm shift toward holistic carbon accounting and innovative technologies like Digital Twin and IoT solutions. By tracking emissions across the entire lifecycle and implementing energy-efficient measures, the sector can contribute to a more sustainable future, aligning with India’s G20 goals and setting a positive example for the world to follow.
By Krishna Prasad, Co-Founder and Chief Product Officer (CPO), nhance
Link to the article: Construction Week
