A Comprehensive Overview of The Steps SEBI Has Taken to Boost Green Buildings

The Securities and Exchange Board of India's (SEBI) mandatory sustainability reporting has significantly accelerated the adoption of green buildings among occupiers, investors, and developers. This regulatory emphasis is reshaping India's real estate landscape, particularly in the leasing of green-certified office spaces.

Sharp Rise in Green Building Leasing

In the second quarter of 2024 alone, green-certified office spaces accounted for 82% of overall leasing activity across India’s top six cities, totaling an impressive 13 million sq ft. This trend reflects a strong commitment by developers, investors, and occupiers to align with national sustainability targets. Since 2023, 70–80% of space uptake by sectors such as engineering, manufacturing, technology, and BFSI has been concentrated in green-certified buildings.

Mumbai and Bengaluru: Leading the Green Revolution

Bengaluru and Mumbai have emerged as the top markets for green-certified building leasing, capturing around 75% of the market share in the first half of 2024. This is particularly evident among technology, engineering, and manufacturing firms, which show a clear preference for sustainable office spaces.

SEBI's New Measures: Simplifying ESG Disclosures

To further streamline environmental, social, and governance (ESG) disclosures, SEBI has introduced new measures requiring listed companies to report ESG metrics for value chain partners accounting for 2% or more of their purchases or sales by value. Initially, this requirement will be voluntary for the first year, transitioning to a comply-or-explain basis.

Benefits of Green Buildings: A Win-Win for All

Real estate developers are increasingly aligning their projects with global sustainability standards, which provide various tangible benefits to tenants, including lower operational costs, improved indoor air quality, and enhanced employee productivity. Certifications such as LEED, GRIHA, and WELL are now critical in validating buildings as green, based on parameters like energy efficiency, waste management, and health-focused design.

Growing Demand for ESG-Compliant Spaces

The increasing focus on ESG compliance by both domestic and multinational companies is driving significant demand for green buildings. Builders are responding by adopting sustainable construction practices that meet the evolving expectations of environmentally conscious businesses and investors.