India Report_Indian Real Estate's ESG Landscape And Its Progress To A Sustainable Future (1)

Indian Real Estate's
ESG Landscape and

Its Progress To A
Sustainable Future
REPORT
CBRE RESEARCH
MARCH 2022
Contents
03 Foreword 34 Chapter 5 60 Annexures
Policy Ecosystem in
India to Embrace ESG
and SDG Goals
05 Chapter 1
Introduction
40 Chapter 6
Understanding Global
Sustainability Reporting
Standards and Best
Practices
11 Chapter 2
Why the focus on
45 Chapter 7
Successful International
ESG: Paris Agreement Case Studies
and Sustainable
Development Goals
16 Chapter 3
Analyzing the Certified
50 Chapter 8
The Way Forward –
Built Environment in What to Expect in the
India Future?
26 Chapter 4
Where does the
55 Chapter 9
How CBRE can Support
Indian RE Industry the CRE Industry in
Stand Today? Defining and Achieving Click to navigate to
their ESG Goals? the desired chapter
Indian Real Estate's ESG Landscape and Its Progress To A Sustainable Future
Foreword
Anshuman Magazine
Divisional President –
India, South East Asia, Middle East & Africa
The growing clamor surrounding ESG is actually a reaffirmation of an old adage – a business cannot exist
in isolation. As the world around us changes, financial and economic feasibility are not the only metrics that
are linked to a business’s success today. Climatic, societal and ethical issues are now taking the limelight,
a trend that got accelerated due to a combination of events - the COVID-19 pandemic, severe weather
mishaps and the COP26 conference. As a result, businesses are now increasingly finding it imperative to
develop forward-looking strategies that take these factors into account, causing ESG to evolve from a
peripheral balance sheet issue to a key component of investment decision-making.
For those of us in the real estate business, the need to imbibe ESG principles is not just a moral imperative,
but also a fiduciary responsibility. With increased scrutiny on ESG, CRE stakeholders need to understand,
improve, and leverage their performance on this front to drive value and stay competitive. The essential
question is no longer what to do, but rather how to do it.
Our report, Indian Real Estate’s ESG Landscape and its Progress to a Sustainable Future, is an analysis of
how ESG would be the driving force for Indian CRE stakeholders going forward. From a business perspective,
it is also a compendium of CBRE’s commitment towards these principles and its knowhow of this fast-
evolving domain. I hope you find it an engaging read.
3 CBRE RESEARCH ©2022 CBRE, INC.

Foreword
Abhinav Joshi
Head of Research –
India, Middle East & North Africa
World over, ESG is fast becoming embedded into the collective conscious of businesses and investors. For
the real estate industry, the spotlight is increasingly on developer and occupier strategies to deliver net-zero
targets and contribute to the larger cause of climate change. As commitments to decarbonize rise, demand for
sustainable buildings is expected to follow suit.
Our analysis of the certified built environment in India shows that this transformation is already underway.
The past five years have seen a pronounced push towards green buildings; the period saw a 37% increase in
the supply of certified buildings, with the addition of ~ 78 million sq. ft. of certified stock, compared with the
previous five years (2012-2016). Moreover, developers are now seeking nationally and internationally recognised
green certifications such as LEED and IGBC that would be popular among their potential tenants.
Going forward, we believe that regulatory requirements around ESG adoption would continue to tighten,
and sustainability reporting standards and benchmarks would gather more steam. As a result, markets with
a proactive approach and a continuous focus on sustainability and climate risk mitigation strategies will be
frontrunners as investment destinations. We have covered more of these futuristic trends and strategies in
greater detail in our first publication on this buzzing segment, Indian Real Estate’s ESG Landscape and its
Progress to a Sustainable Future. I hope you find it a worthy guide for your organization’s ESG journey.

Chapter 1
Introduction
1.1 Defining ESG

ESG incorporates Environment, Social and Governance factors into business functioning, both internally and throughout their supply and value
chains. The ESG canvas goes beyond traditional strategies such as vigilant resource consumption, reduction in CO2 emissions and climate
resilience. It hinges on factors as varied as equity and inclusion to the social impact of business activities, transparency in corporate governance
policies and board diversity.
Achieving an organisation’s ESG goal requires efforts across the enterprise, with real estate being an important (although not a singular) pillar
of the overall strategy. The following figure demonstrates the ESG approach that could be considered by an enterprise.
Figure 1.1.1: Major elements of an ESG strategy
Environment (E) Social (S) Governance (G)
• Minimising carbon footprint • Improving Diversity, Equity and • Developing clear corporate
Inclusion (DE&I) governance
• Developing climate resilience
• Implementing policies that impact • Inculcating responsible corporate
• Preferring environment-friendly
people (employees, clients and behavior
materials for construction
consumers)
• Ensuring inclusivity of the board
• Reducing resource consumption
• Understanding the social impact
• Instituting whistleblower protection
• Protecting natural resources and of the company’s products
policies
biodiversity
• Ensuring health, wellness and
• Enhancing transparency in reporting
safety of labor and employees
• Integrating data protection and
• Increasing community-based
privacy policies across the value chain
engagements
Source: Real Estate's Role in the Environmental, Social and Governance (ESG) Agenda, 2021
CBRE Global, September 2021; CBRE India Research, Q1 2022

1.2 Figure 1.2.1: Global Climate Risk Index Rankings (2000-2019)*
ESG – A moral
imperative
or a fiduciary
responsibility?
As per the Intergovernmental Panel on Climate Change
(IPCC), the world is now nearly 1° Celsius warmer than at
any point of time in the past nearly 200 decades, and it
is anticipated to become warmer by 1.5° Celsius by 2040.
In order to limit the global warming to 1.5° Celsius, the
world would need innovative and bold solutions to enable
industrial decarbonization and eliminate approximately
40% of the global emissions.
For India, given our size and population, the climate risks
have grown manifold. The country ranked among the
top 20 nations globally on the GermanWatch’s Global
Climate Risk Index Rankings 2000-2019; in 2019, it was
among the 10 most vulnerable nations ranked on this
index in terms of climate risks.
Global Climate Risk Index: Ranking 2000 - 2019

1-10 11-20 21-50 51-100 >100 No Data
*Data from 180 countries was analysed from 2000 to 2019 to arrive at these consolidated rankings. Source: GermanWatch; CBRE India Research, Q1 2022
Higher the ranking for a country, higher would be the climate risk

A majority (42%) of the respondents to the World Economic Forum’s Global Risk Perception Survey 2021-22 ranked ‘climate action failure’ as the number one long-term threat to the world
and its associated risks as having the most severe impact over the next decade. To counter the growing climate threat, businesses need to consider both direct and indirect emissions. Below is a
detailed account of the types of emissions that corporates need to manage:
Figure 1.2.2: Scope 1, 2 and 3 carbon emissions*
Scope 1 Scope 3
DIRECT INDIRECT CO2 PFCS CH4 SF6 N2O HFCS
Company Company Investments Franchises Leased End-of-life treatment Use of sold Processing of Transportation
facilities vechicles assets of sold products products sold products & distribution
REPORTING COMPANY DOWNSTREAM ACTIVITIES
Scope 2 Scope 3
INDIRECT INDIRECT
Purchased electricity, steam, Purchased goods Capital Fuel & energy Transportation Waste from Business Employee Leased
heating & cooling for own use & services goods related & distribution operations travel commute assets
UPSTREAM ACTIVITIES
*Scope 1 emissions are direct emissions from owned or controlled sources.
Scope 2 emissions are the firm’s indirect emissions from the generation of purchased energy.
Scope 3 emissions comprise 15 other categories of indirect emissions (not included in scope 2) that occur in the value chain of the reporting firm, including both upstream (supply chain) and downstream emissions (customers).
CO2- Carbon Dioxide | PFC S- Perfluorocarbons | CH4 - Methane | SF6 - Sulphur Hexafluoride | N20 - Nitrous Oxide | HFC S - Hydrofluorocarbons Source: IEA; UNFCC; Plan A Academy; CBRE India Research, Q1 2022

As the ultimate target for both governments and businesses is to Figure 1.2.3: GRESB 2021 Real Estate Assessment Results
achieve net zero emissions*, it is estimated that an incremental
investment of approximately USD 50 trillion would be required
by 20501 to meet this goal. The adoption of alternative sources
of energy such as solar will drive emission reductions until 2030;
however, beyond 2030, breakthrough technologies such as energy-
efficient solutions, hydrogen-based fuels, bioenergy and carbon
capture / utilization / storage solutions among others will have to
play a key role in reducing carbon emissions.
EUROPE
According to the World Economic Forum, buildings account for
nearly 40% of global greenhouse gas emissions and 40% of raw
material use. Therefore, assessing and imbibing ESG into real 784
estate and construction is paramount for countries to be able to 45,236 ASIA
achieve their sustainability goals.
USD 1,348 bn
As of today, with the growing understanding of ESG, the real estate 238
sector has also started imbibing it into its corporate and functional 10.325
strategies. According to the Global Real Estate Sustainability
USD 1,803 bn
Benchmark (GRESB) 2021 Real Estate Assessment Results, over
USD 2.1 trillion worth of ESG-compliant developments are
located in the Americas, and USD 1.3 trillion in Europe. The AMERICAS
largest increase in value was seen in Asia, from USD 1.1 trillion worth
of Assets Under Management (AUM) in 2020 to USD 1.8 trillion in 366
20212. Also, The UN-backed Principles for Responsible Investment
(PRI) has seen its signatories grow from 63 with USD 6.5 trillion in
53,264
AUM in 2006 to over 4,375 as of September 2021 representing over USD 2,153 bn
GLOBALLY
USD 121 trillion in AUM. DIVERSIFIED AFRICA
OCEANIA
20 6 106
5,245 1,001 2,125
USD 128 bn USD 13 bn USD 286 bn
Source: GRESB 2021 Real Estate Assessment Results, CBRE India Research Q1 2022
* As per the IPCC, net zero emissions are achieved when anthropogenic emissions 1. Financing the Transition to a Net-zero Future, WEF, Oct 2021
(emissions resulting from or produced by human activities) of greenhouse gases to the Number of entities Number of assets GAV 2. GRESB Real Estate Assessment Results | 2021
atmosphere are balanced by anthropogenic removals over a specified period. GAV - Gross Asset Value

1.3 Why should real estate players adopt ESG?

Listed below are a few benefits which ESG-compliant real estate stakeholders can derive:
1.3.1 1.3.2 1.3.3 1.3.4 1.3.5

Fetch higher rents, sale price Ease of doing business and Lowering of long term costs; Supports better financial growth COVID-19 fuels the adoption of
Real estate projects with green certification,
safeguards from regulatory elongate asset life for corporates ESG compliance
WELL certification etc. are now exceedingly processes The real estate sector is directly exposed to ESG improves financial performance by The COVID-19 pandemic has further underscored
being preferred by tenants. International mature the physical impact of climate change. Extreme maintaining a good public reputation which in the need to keep sustainable development at
markets have shown that such buildings have By making the ‘G’ aspect more transparent, the very core of any development strategy. The
governing authorities of a company also build weather events can lead to higher insurance turn helps the firm to retain talented employees increased flexibility and comfort of working from
fetched higher rents and higher sale price as premiums, capital expenditure and operational for the long term. According to a McKinsey
trust, which helps stakeholders in getting home has meant that offices, malls and other
well as witnessed lower vacancies as compared costs, as well as a decrease in liquidity and survey in 2020, respondents confirmed that ESG commercial set ups will have to go the extra mile
to traditional projects. In India, the focus on approvals and licenses smoothly. Hence, a real
value of buildings. Therefore, contributing to a increases shareholder value by strengthening the and provide the same level of safety and comfort
better air quality over the past couple of years estate stakeholder with positive positioning can to encourage employees / shoppers to move out of
expand into existing markets and tap new ones reduction in carbon emissions indirectly helps organization’s competitive position in the market
has meant that sustainable and green is not their homes for long periods of time.
effortlessly. real estate stakeholders reduce their long- and meeting the society’s expectations for good
only a long-term strategy, but also that some of term operational costs. In our November 2021 corporate behaviour4. Hence, it helps to earn top In the past one decade, the focus of stakeholders
these parameters are translating into immediate, CBRE Europe report titled ‘Is Sustainability line growth overtime. was primarily on the ‘E’ aspect, with little emphasis
With India moving towards completing its COP21
almost tangible benefits for occupiers. Certification in Real Estate Worth It?’, the study on ‘S’ and ‘G’. However, COVID-19 has thrown
commitments and pledging to COP26, central /
of 12 countries demonstrated that sustainable The aforementioned benefits, such as higher rents, existing inequalities into greater focus, thereby
In numerous global markets, the gap between state governments are expected to bring in more encouraging action to address them; at the same
stringent regulations to achieve the targets. The buildings have shown lower operating costs over lower vacancies, lower operating costs help real
green and brown rental discounts has been time, it has highlighted the necessity to think
government’s focus on sustainability was quite the years, which in turn is helping developers estate stakeholders improve their profits. Moreover, harder about the changes required in working
widening, thus creating a better business with a higher retention of the talent pool, the firm
evident in the Union Budget 2022-23, and in fetch premium rentals over traditional buildings3. practices and employee wellbeing. According to
proposition for building more sustainable and can generate greater income in a more efficient the Berenberg ESG Survey Exploring Investor
our view, developers and investors following ESG Also, incorporating ESG at building / initial
livable spaces. Our inhouse analysis (refer way; thereby improving the firm’s margins. Sentiment 2021, 47% of total respondents
compliance can smoothly sail through this phase stages is much more cost effective than
Chapter # 3) demonstrates that across real considered the ‘S’ as the most important element,
and operate without any impediments. retrofitting of buildings as per ESG norms. followed by 35% choosing ‘E’ as important and only
estate developments, certified green projects This argument has further been strengthened
are commanding a higher rental than non- 18% selecting ‘G’5.
by RICS, which has included the evaluation of
certified projects. a company’s ESG standards in its Red Book, With countries moving towards achieving COP21
effective from 31st January 2022. The aim is targets, operating rules for the real estate sector
Hence, ESG-complaint buildings make for more to provide a framework for delivering on ESG are expected to become stringent. Therefore,
attractive investment propositions in terms of reporting requirements in professional valuation stakeholders would need to be more accurate
asset values and rents. Such projects show lower in their disclosures and transparent in their
advice. Therefore, ESG compliance will further functioning to safeguard themselves from any
degree of obsolescence and improved tenant
strengthen among real estate stakeholders. future scrutiny.
satisfaction, thereby providing scope for higher
lease renewal rates.
3. Is sustainability certification in Real Estate worth it? | 2021

4. The ESG premium: New perspectives on value and performance | 2020
5. Berenberg ESG Survey Exploring Investor Sentiment | 2021

Chapter 2
Why the focus on

ESG: Paris Agreement
and Sustainable
Development Goals
2.1 Paris Agreement and India’s aim for 2030

The Paris Agreement is an international treaty and a legally binding document on climate change. It has been ratified by 193 parties# till now
and was adopted at the Conference of the Parties (COP) 21 in 2015 in Paris and came into force on 4 November 2016. Its goal is to limit global
warming to well below 2° Celsius, with intended efforts to limit the increase to 1.5° Celsius, compared to pre-industrial levels.
Action plan to achieve the goals
Countries will aim to reach global Countries are also required to submit
According to the latest UNEP
peak of greenhouse gas emissions their Long-Term Low Greenhouse FI – Global ESG Real Estate
as soon as possible to achieve a Gas Emission Development
climate neutral world by 2050. Strategies (LT-LEDS)**. Investment Survey Results
2019, 85% of respondents
Implementation of the agreement is Developed countries are are highly or very highly
planned on a 5-year cycle basis, with encouraged to provide financial
increasingly ambitious climate actions, assistance to other countries motivated to imbibe ESG
which are to be carried out by countries that require help, while each
and detailed in a submission of their party should focus on climate principles due to lowered
plans called Nationally Determined finance***.
Contributions (NDCs)*. risk. The survey further
showed that 80% of Asia-
Focus on technology development Emphasis on capacity building Pacific respondents were
and transfer that can help curb for developing nations to be able
global greenhouse gas emissions to deal with the challenges of highly motivated to use ESG
and build resilience to climate climate change.
change. criteria in their functioning.
# This includes 192 states (191 UN member states as well as the Cook Islands and Niue) and one supranational union (the European Union).
* As per the United Nations, Nationally Determined Contribution, is a climate action plan to cut emissions and adapt to climate impacts. Each Party to the Paris Agreement is required to establish an NDC and update it every five years.
** As per the World Resource Institute, these strategies are created to set out long-term goals for climate and development and it also aims to direct short-term decision-making to make the required modifications to bound global warming. Hence,
they are regarded pivotal to achieve the goal of reaching net-zero global emissions, restraining warming, and averting negative impacts of climate change.
*** As per the UNFCC, climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change.

Where is the world now? Tracking India’s progress on the Paris Agreement
An independent scientific research platform called the ‘Climate Action Tracker’ was created by two organisations – ’Climate The Climate Action Tracker rates countries’ efforts toward meeting the tenets of the Paris Agreement on a five-point scale (in
Analytics’ and ‘New Climate Institute’ – with the help of other collaborators to track government climate actions and measure it fig. 2.1.2).
against the goals set by the Paris Agreement. The platform has created warming projections for the year 2100 based on the net zero
emissions target adopted / under discussion in 140 countries, as shown in figure 2.1.1.
Figure 2.1.2. Climate Action Tracker rating scale
Figure 2.1.1: Projected global temperature increase by the year 2100**
01 02 03 04 05
Policies & action Highly Almost 1.5° Celsius Paris
Real world action based on current policies Critically Insufficient Insufficient
Insufficient Sufficient Agreement
2030 targets only
Full implementation of 2030 NDC targets* Source: Climate Action Tracker
Pledges & targets
+4˚C
Policies Full implementation of submitted and binding India’s overall rating is ‘Highly Insufficient’. The rating is further divided into individual parameters of ‘Policies & Action’ where
& action long-term targets and 2030 NDC targets* India is ‘Almost Sufficient’, ‘Internationally Supported Target’ where it is ‘Critically Insufficient’ and ‘Fair Share Target’ where it
+3.6˚C 2030 Optimistic scenario is ‘Highly Insufficient’.
targets Best case scenario and assumes full
+3˚C only implementation of all announced targets India has recently announced its ‘Net Zero Target’ in the COP-26 summit at Glasgow. Though the second five-yearly NDC of
Pledges &
+3.0˚C including net zero targets, LTSs and NDCs*
+2.7˚C targets Optimistic 2020 is yet to be submitted, new targets have been announced in the summit:
+2.4˚C +2.6˚C scenario
+2.4˚C * If 2030 NDC targets are weaker than projected emission levels • 2070 – Achieve net zero emissions by 2070
+2.0˚C +2.1˚C under scenario policies & action, then levels from scenario policy
+2˚C +1.9˚C
+1.8˚C & action should be considered. • 2030 Agenda
+1.7˚C
+1.5˚C – Carbon intensity reduction by 45% over 2005 levels
+1.5˚C
1.5˚C PARIS AGREEMENT GOAL – Non-fossil fuel electricity capacity of 500 GW
– Obtaining 50% of energy needs from renewable sources
WE ARE HERE
1.2˚C Warming – Reduction of 1 billion tonnes of projected emissions from now
in 2021
Further, under the Copenhagen Accord India had set a target to reduce the GDP (total amount of greenhouse gas emissions
+0˚C
PRE-INDUSTRIAL AVERAGE emitted for every unit of GDP) by 20-25% by 2020 from 2005 levels and achieved the target by cutting emissions by 21%.
However, it is to be noted that these targets can be achieved through multiple mitigation and adaptation strategies, climate
Global mean Climate change finance instruments, external / international cooperation, technology transfer and support, and capacity building.
temperature Action In this respect, there are numerous policies in effect under the National Action Plan on Climate Change (NAPCC)# which
increase Tracker
include National Missions for solar, enhanced energy efficiency, sustainable habitat, water, Green India, sustainable agriculture,
by 2100
sustaining the Himalayan eco-system, and strategic knowledge for climate change.
Other focus areas that impact cities and real estate would include schemes under Smart Cities Mission, Atal Mission for
Rejuvenation and Urban Transformation (AMRUT), and National Heritage City Development and Augmentation Yojana
Source: Climate Action Tracker, November 2021; CBRE India Research, Q1 2022 (HRIDAY).
** The numbers at the top and bottom of every bar depicting the four climate scenarios are the upper and lower limits of the temperature change that could happen by the year # Released in June 2008, the National Action Plan on Climate Change outlines a national strategy that targets to enable the nation to adapt to climate change and enhance
2100. The numbers highlighted in bold in these bars are the median warming estimates by 2100 under each scenario if the associated conditions are met. the ecological sustainability of India's development path.

2.2 UN Sustainable Development Goals can help define

and shape ESG outcomes
The Sustainable Development Goals (SDGs), created by the UN and adopted in 2015, are the blueprint to achieve a better and more sustainable
future for all. Though not legally binding, the SDGs address the global challenges we face, integrating social, economic, and environmental
dimensions of development into 17 categories and associated 169 targets. Globally, 193 countries have adopted SGDs, of which 192 countries
have submitted NDCs outlining planned climate actions and targets.
Figure 2.2.1: Sustainable Development Goals
NO POVERTY ZERO HUNGER GOOD HEALTH QUALITY GENDER CLEAN WATER

AND WELL-BEING EDUCATION EQUALITY AND SANITATION
AFFORDABLE AND DECENT WORK INDUSTRY, REDUCED SUSTAINABLE RESPONSIBLE

CLEAN ENERGY AND ECONOMIC INNOVATION AND INEQUALITIES CITIES AND CONSUMPTION AND
GROWTH INFRASTRUCTURE COMMUNITIES PRODUCTION
CLIMATE LIFE BELOW LIFE ON PEACE, JUSTICE PARTNERSHIP

ACTION WATER LAND AND STRONG FOR THE GOALS
INSTITUTIONS
Source: UNDP; CBRE India Research, Q1 2022

Aligning ESG with the SDGs for a sustainable future Tracking India’s progress on SDGs
The UN’s SDGs are increasingly being recognized worldwide as a foundation for responsible investment as the focus shifts The Inter-Agency and Expert Group on SDG indicators (IAEG-SDGs), comprised of regional and international agencies as
more seriously on ESG. Hence, it is not surprising that almost all 17 SDGs are associated with one or the other element of observers, was established to create and implement the Global Indicator Framework (GIF) for tracking the goals of the 2030
ESG. Agenda.
Responding to national priorities, India also committed to implementing the SDGs based on the nationally defined indicators.
The National Institution for Transforming India (NITI) Aayog has mapped the SDGs with centrally sponsored programs
Figure 2.2.2: Commonalities between SDGs and ESG of different central departments (Refer Annexure – II). From covering 13 goals in the first edition when the SDG Index and
Dashboard was launched, the third edition covers all 17 goals, 70 targets and 115 indicators. Figure 2.2.3 depicts the composite
1: No Poverty score of India as per the SDG India Index 2020-21. Further, the Ministry of Statistics and Programme Implementation (MoSPI)
has developed a National Indicator Framework (NIF) containing 306 parameters accompanied by data sources, that has
2: Zero Hunger published multiple reports through 2019-2021. According to the latest progress report, India has shown improvement on most
parameters under 17 SDGs in comparison to 2015-16. (For more details on localisation of SDGs and progress in key states,
3: Good Health and well-being please refer Annexure – II)
4: Quality education
5: Gender Equality Figure 2.2.3 Composite score of India on the SDG India Index 2020-21
6: Clean Water and Sanitation 100

92
7: Affordable and clean energy 90
83
79
8: Decent Work and Economic Growth 80 74 74
74
70 67 66
9: Industry, Innovation and Infrastructure 60 61
60 57
55 54
Score
10: Reduced Inequalities 48
50 47
11: Sustainable Cities and Communities
40
12: Responsible Consumption and Production 30
13: Climate Action 20
14: Life Below Water 0
SDG1 SDG2 SDG3 SDG4 SDG5 SDG6 SDG7 SDG8 SDG9 SDG10 SDG11 SDG12 SDG13 SDG15 SDG16
15: Life on Land
2020 60 47 74 57 48 83 92 61 55 67 79 74 54 66 74
16: Peace, Justice and strong institutions 2019 50 35 61 58 42 88 70 64 65 64 53 55 60 66 72
17: Partnership for the Goals

Source: SDG India – Index and Dashboard 2020-21, Niti Aayog; CBRE India Research Q1 2022
Environment Social Governance
*Note: The composite score ranges from 0 to 100 and denotes the overall achievement of India in achieving the targets under the goals. A score between 65 to 99 implies that
India has progressed forward towards achieving the targets set for 2030; a score between 50 and 64 indicates that there is a scope for significant improvement; whereas a
Source: ESG Considerations Beginning To Re-Shape Investment Management, Citibank; CBRE India Research, Q1 2022 score below 50 implies that such goals require special attention of the policymakers.

Chapter 3
Analyzing the
Certified Built
Environment in India
Since buildings form an integral part of any country trying to achieve sustainability goals, we analyzed our office stock for the top six cities in
India (NCR, Mumbai, Pune, Hyderabad, Bangalore and Chennai) to ascertain the status of green-certified stock in these cities and also whether
certified projects have been able to reap any additional benefits for the asset owners. While we understand that ESG is a wider concept that
goes beyond just green and sustainability, however for the purpose of standardization and an equitable comparison, we have restricted our
analysis to certified green office buildings in this section. The data leveraged for this analysis throughout is as of September 2021.
3.1 Certified green office stock grew by 177% to 212 mn sq. ft.
in Q3 2021 from under 80 mn sq. ft. in 2011
Figure 3.1.1: 135 mn sq. ft. of green building stock added since 2011
800
700
600
In million sq. ft.

500
400
300
200
100
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Certified Stock Non-Certified Stock
Source: CBRE India Research, Q1 2022
Over the past decade, green real estate assets have grown tremendously, with their share in the total office stock increasing from 24% in 2011 to 31% in 2021. Certified stock
has also increased substantially, growing at a CAGR of 10.7%, compared to 7.7% for overall stock, since 2011.

The past five years saw a pronounced push towards green buildings; the period saw a
37% increase in the supply of certified buildings, with the addition of ~ 78 million. sq. ft. of
certified stock, when compared with previous five years (2012-2016). This indicates that
the Indian real estate sector is becoming more aware of its responsibility towards ESG
principles and moving rapidly towards imbibing sustainability in its assets.
Figure 3.1.2: NCR and Bangalore lead the share in total certified stock
30% 24% 19%

NCR Bangalore Hyderabad
13% 11% 3%
Chennai Mumbai Pune
The analysis clearly shows that NCR and Bangalore are ahead of the curve and together
account for ~ 54% of the total certified office stock of India.
To promote higher adoption of green certified projects, the state and the central
government could incentivize developers and asset owners in the form of monetary and
non-monetary benefits such as higher FSI, lower statutory fee and lower incidental taxes,
etc. In addition, common platforms such as regular industry events could be organized
to promote awareness about the importance of sustainable buildings in the long-term.

3.2 NCR and Hyderabad lead in terms of certified

completed stock
Figure 3.2.1: What percentage of a city’s total Figure 3.2.2: How is the Certified Green Stock Split
office stock is green certified? across development types
Bangalore
50%
100%
40%
90%
NCR 30% 80%
Chennai
70%
20%
60%
Share (%)
10% 50%
40%
0%
30%
20%
10%
Pune Hyderabad 0%
Bangalore Chennai Hyderabad Mumbai Pune NCR
Non-SEZ SEZ
Mumbai
NCR and Hyderabad lead the fray in terms of the Cities such as Bangalore, Mumbai and NCR have a
share of certified buildings in their respective total higher proportion of certified stock in their non-SEZ
stock, with a 44% share each; followed by Chennai at projects whereas Chennai and Pune showed higher
37%. Meanwhile, Mumbai (16%) and Pune (15%) have share of certified stock in their SEZ projects.
a significant potential to improve their share on this
parameter.

3.3 Certified green projects command rental

premium over non-certified projects
CBRE India Research undertook an analysis of the prevailing rents in completed green-certified and non-certified buildings across cities. The study of rents has been done with
an assumption - keeping other factors same. While factors such as location, quality of asset and backing of a strong developer or investor, etc. could always lead to a higher rental
premium, but today with ESG coming into major play, green certification has also become an important metric for tenant decision making. Hence, examining the rental premium
from this lens also becomes equally important.
It is also important to note that while we’ve seen an increase in certified stock in the past decade, its share in overall leasing has also been increasing in cities such as Bangalore,
NCR and Hyderabad. Certified assets have also witnessed relatively lower vacancies as compared to non-certified ones. While this may not be entirely due to sustainability
certification, as several other factors such as asset quality, location, amenitization could also be at play; nonetheless, occupier appetite to locate themselves out of such certified
assets is definitely strengthening.
Sustainability certifications definitely have a fundamental impact on the characteristics of a building, and thus also influences the asset value, but it could be challenging
to accurately pinpoint the sustainability premium. We could though argue whether it is the certification itself or the special features of the building achieved through the
certification or location that are the drivers of value creation.
Figure 3.3.1: Premium commanded by certified Figure 3.3.2: Premium commanded by certified projects (non- SEZ
projects (SEZ category) in various cities* category) in various cities
40%
12%
11.1% 33%
35% 31%
10%
9.0% 30%
8% 25%
Percentage
Percentage
6.2%
6% 20%
16%
14%
15%
4% 11%
2.6% 10%
2% 5%
5%
0% 0%
Bangalore Chennai Hyderabad Pune Bangalore Chennai Hyderabad Mumbai NCR Pune
Source: CBRE India Research, Q1 2022 Source: CBRE India Research, Q1 2022
* As Mumbai has a limited number of certified SEZs, we have excluded the city from this particular
analysis. One city that stands out on this parameter is NCR, where the entire SEZ stock is certified
green, thus making it a benchmark for other cities.

3.4 LEED certification dominates

total certified stock in India
Figure 3.4.1: Share of various green certifications in total certified stock
1%
21%
As international occupiers
make a beeline for Indian
shores, developers are now
seeking international green
certifications that would
be popular among these
potential tenants.
79%
Our analysis also showed

that several developers have
taken certification from both
LEED IGBC GRIHA LEED and IGBC to meet
international standards.

Figure 3.4.2: City-wise LEED and IGBC certified stock
Area under LEED Certification (city-wise) Area under IGBC Certification (city-wise)
60
20
18
50
16
40 14
Million sq. ft.
12
Million sq. ft.

30 10
8
20
6
4
10
2
0 0
Bangalore Chennai Hyderabad Mumbai NCR Pune Bangalore Chennai Hyderabad Mumbai NCR Pune
Certified Gold Platinum Silver Certified Gold Platinum
Source: CBRE India Research, Q1 2022 Source: CBRE India Research, Q1 2022

3.5 Certified green stock majorly

concentrated in peripheral areas of cities
Indian cities have followed a different development trajectory compared with their international counterparts.
Internationally, city centers primarily witness a high concentration of Grade A office spaces while peripheral locations are
either residential or home to small, often inconsequential, workspaces. However, in India, city centers are often historical
sites dotted with old office stock (sometimes with restrictions on refurbishment or structural changes) and residential /
retail spaces, which has caused Grade A office spaces to primarily be concentrated in the peripheral locations. As a result,
most of the certified stock can be found in peripheral business districts of Indian cities.
Figure 3.5.1: Concentration of Certified Stock by Business District
11%
55% 34%
Core Secondary Business Districts Peripheral locations
Our analysis also showed that developers continue to believe that constructing a sustainable building is
more efficient than refurbishing existing stock. As a result, India is witnessing a trend wherein PBD has
the highest share in green buildings, followed by SBD; CBD has the lowest number of green buildings as
it is usually a hub of older projects.

3.6 Institutional investors ahead of

the curve
Figure 3.6.1: Share of certified stock by stakeholder type
Institutional 45%
Non-Institutional 27%
0% 20% 40% 60%
Non-Institutionals Institutionals
Institutional asset owners are ahead of the curve as even though they own only 22% of the total office stock
in India, almost 45% of it is green certified. On the other hand, non-institutional asset owners hold a 78% share
(539 million sq. ft.) in the total stock, but only 27% of it is green certified.

3.7 Certified green stock of REIT

assets to rise with evolving policy and
regulatory ecosystem
Figure 3.7.1: Share of certified stock in listed REITs in India
With the growing importance

35% of ESG in real estate and an
anticipated tightening of the
65% regulatory compliance with
respect to ESG reporting,
the share of green certified
REIT assets is expected
to increase in India in the
coming years.
Non-Certified Certified

Chapter 4
Where does the

Indian RE industry
stand today?

4.1 Top considerations for investors in India and

their sustainable initiatives
Investors continue to find imbibing ESG metrics in their strategies beneficial, driven not only by a need to comply with regulatory requirements and environmental protection
regulations, but also to preserve future asset value and enhance brand image.
Almost 60% of respondents of CBRE’s 2021 Global Investor Intentions Survey (released in May 2021) stated that investors have already adopted ESG criteria as a part of
their investment strategies, with the Americas, EMEA and Asia-Pacific displaying a stronger focus on these issues than in previous years.
According to CBRE’s Asia Pacific Investors Intentions Survey, released in January 2022, an increasing number of large investors are integrating ESG criteria into their
strategies. Some of the approaches include prioritising the purchase of buildings with green certifications and retrofitting existing properties to enhance energy efficiency,
water usage and wellness.
Figure 4.1.1: Higher focus from investors towards adopting ESG criteria into their investment strategies
60%
50%
40%
30%
20%
10%
0%
Already adopted ESG criteria Will adopt ESG criteria Considering adopting Unlikely to adopt
within the next three to ESG criteria ESG criteria
five years
2020 2021 2022
Source: Asia Pacific Investors Intentions Survey, January 2022; CBRE India Research, Q1 2022

Figure 4.1.2: Key considerations for investors
Energy-saving The gap between

/ net-zero goals green rental premium
are the new and brown rental
normal discount is widening
Effective risk and

Health & wellness is
cost management
influencing building
can enhance
design and operations
resilience
Benchmarking
Technology is
and reporting will
critical to achieving
be essential
ESG goals
Green construction Corporate social

materials are responsibility is key to
available and viable good governance
Regulatory
requirements will
continue to tighten
Source: CBRE Global Research, ESG & Real Estate: Top 10 Things Investors Need to Know, October 2021;
CBRE Global Research, Global Investor Intentions Survey 2021, May 2021;
CBRE’s Sustainability Starts with Energy Management, August 2021

Figure 4.1.3: Examples of sustainable initiatives of key institutional investors / asset

owners in India and globally#
Investor HQ AUM (USD bn)* Sustainable Initiatives
GIC achieved its goal of becoming carbon neutral

across global operations in its 10 offices in FY 2020-
GIC Singapore 744 21. It launched its Sustainable Investment Fund (SIF)
in July 2020 as a dedicated portfolio to accelerate
sustainability integration across all asset classes.
Blackstone targets to reduce carbon emissions by

Blackstone US 731 15% across all new investments where it controls
energy usage.
ADIA remains a committed participant in the One

Planet Sovereign Wealth Fund Working Group,
ADIA UAE 700 fostering dialogue and taking action with other
global investors to align with the goals of the Paris
Agreement.
Brookfield Canada 650 Brookfield supports the goal of net zero greenhouse
gas emissions by 2050.
APG Asset APG has reduced the carbon footprint of its equity
Netherlands 650 portfolio by nearly 40% since 2015. It has expressed
Management its ambition to achieve net zero emissions by 2050.
By the end of FY23, CPPIB plans to achieve carbon

neutrality for its internal operations in terms
CPPIB Canada 542 of Scope 1 and 2 emissions and business travel
emissions. It is committed to net zero emissions
across its portfolio and operations for all scopes by
2050.
Hines aims to work towards its aim of net zero

Hines** US 165 operational carbon emissions (for Scope 1 and 2) by
2030 and advocate for net zero carbon emissions
(Scopes 1-3) by 2050.
CapitaLand The fund unveiled its 2030 Sustainability Master

Singapore 90 Plan in October 2020 with an aim to reduce its
Investment carbon emissions intensity by 78%
Source: Corporate websites; CBRE India Research, Q1 2022

* As of September 2021
** Hines European Core Fund
# The details have been provided as per the information available in the public domain. CBRE confirms that information contained herein, has been obtained
from sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about
them. Whilst all reasonable care has been taken to ensure that facts stated are accurate and the opinions given are fair. Neither CBRE, nor any director or
employee of CBRE shall in any way be responsible for the accuracy of the data obtained from reasonable sources.

4.2 Top considerations for occupiers in India and

their sustainable initiatives
Occupiers are the main drivers for the development of a green real estate ecosystem. The demand intensity for sustainable projects will define how quickly we see a
transformation in the sector. According to the Energy and Climate Intelligence Unit (ECIU), at least one-fifth (21%) of the world’s 2,000 largest public companies, with
sales of USD 14 trillion, have committed to meeting net zero emission targets6.
Further, CBRE India’s ‘The India Future of Office Survey 2021’ (December 2021) highlights that factors such as wellness (by way of improving air quality and focusing
on social distancing and touchless technologies) and sustainability (preference for green, open spaces) are among the top five expectations that occupiers have from
developers as they formulate return to work strategies.
Figure 4.2.1: Asset enhancement initiatives to focus on wellness, user experience and sustainability
% of respondents
Touchless building features such as self-opening doors,

contactless liftbuttons, voice-activated vending machines, etc. 78%
Improved indoor air quality through use of UVGI,

78%
air ionization, HEPA filters, etc.*
Social distancing and prominent signages in 76%

common and amenity areas
Sustainable / green spaces 59%
Real-time app-based communication regarding health and

45%
safety,building status updates, cleaning processes, indoor air
App-based F&B ordering 45%
Access to virtual events such as meditation and fitness classes 33%
Concierge services 27%
Source: The India Future of Office Survey 2021,

App-based tenant registration 25% December 2021; CBRE India Research, Q1 2022
6
Taking Stock: A Global Assessment of Net zero Targets,
Energy & Climate Intelligence Unit, University of Oxford,
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% March 2021

Figure 4.2.2: Key considerations for occupiers Figure 4.2.3: Examples of Net zero emission targets
of key occupiers in India*
Evaluating the Incorporating Occupier Sector HQ Net zero carbon target

climate risk profile of sustainability
prospective locations certification TCS Tech India 2030
as a site selection
criterion Accenture Consulting Ireland 2025
Creating a renewable Supporting easy and IBM Tech US 2030

energy and responsible sustainable commute;
material sourcing influencing employee KPMG Consulting Netherlands 2030
strategy behavior
Amazon E-commerce US 2040
Considering health & Improving reporting Microsoft Tech US 2030 (Carbon Negative)
wellness, community of transparency,
impact and diversity, committing to a living Google Tech US 2030
equity & inclusion wage and
aspects in whistle-blower Siemens Engineering Germany 2030
RE strategies protection
L&T Engineering India 2040
Conducting Using flexible spaces Reliance Industries Diversified India 2035

sustainability audits to reduce underutilization
to identify operational and green leases Cognizant Tech US 2030
improvements to incentivize
sustainability 2030 (internal operations);
British Telecom Telecom UK 2040 (for supply chain and
customer emissions)
Source: CBRE Global Research, Purpose-Driven: Corporate Real Estate’s Role in the ESG Agenda, BA Continuum BFSI US 2050
September 2021
American Express BFSI US 2035
Source: Corporate websites; CBRE India Research, Q1 2022

* The details have been provided as per the information available in the public domain. CBRE confirms that
information contained herein, has been obtained from sources believed to be reliable. While we do not doubt
their accuracy, we have not verified them and make no guarantee, warranty or representation about them. Whilst
all reasonable care has been taken to ensure that facts stated are accurate and the opinions given are fair.
Neither CBRE, nor any director or employee of CBRE shall in any way be responsible for the accuracy of the data
obtained from reasonable sources.

4.3 Top considerations for developers in India and their sustainable

initiatives
With ESG now playing a more prominent role in how companies operate, investors and developers across the board are embedding ESG considerations into every stage of
the property lifecycle – from due diligence to acquisitions and from leasing to asset management.
Figure 4.3.1: Key considerations for developers
Source: CBRE Global Research, ESG & Real Estate: Top 10 Things Investors Need to Know, October 2021;
CBRE APAC Research, Exploring Office Enhancement Strategies –Pandemic-Era Real Estate Investment, September 2021

While international asset owners / developers such as Blackstone, Brookfield, CapitaLand already have ESG commitments,
most leading Indian developers have also pledged compliance with ESG norms. Developers such as Tata Realty, Embassy
Group, Shapoorji Pallonji, Mahindra Lifespaces, Hiranandani, Oberoi Realty amongst others are making commitments
across asset types and taking concrete steps towards carbon neutrality. Below are some instances of Indian developers
and their sustainability initiatives in the recent past.
Figure 4.3.2: Examples of sustainable initiatives by key developers in India*
RE portfolio
Developer Category Sustainable Initiatives
(mn. sq. ft.)#
• 100% sites are zero water discharge across rental
portfolio since FY2018-19.
DLF Listed 330 • Aiming to ensure that atleast 90% of its rental
portfolio is Green Building certified.
• Aiming to reduce energy intensity in its rental
portfolio by 15% using FY 2019-20 as baseline.
A water-positive and carbon-neutral company

Godrej Properties Listed 187 (across Scope 1 and 2 GHG emissions), it is working
towards minimizing its waste-to-landfill footprint
proactively across its operations.
The Group continues to work on social impact

Prestige Estate Listed 144 initiatives such as rejuvenation of Ulsoor Lake,
Bangalore: spending on healthcare and education.
• Achieved 100% waste water recycling.

• Committed to net carbon neutral by 2035.
• Plans to formalize decarbonization with SBTi by
Macrotech Listed 81 FY2022-23. Initiated Green Certification of entire
portfolio.
• All upcoming developments are being being
provided EV infrastructure.
Sobha Ltd Listed 61 Reduced energy consumption by 20-30% and water

consumption by 30-50% in last one decade.
Source: Developers corporate websites; CBRE India Research, Q1 2022

# As of September 2021
* The details have been provided as per the information available in the public domain. CBRE confirms that information contained herein, has been obtained from
sources believed to be reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation about them.
Whilst all reasonable care has been taken to ensure that facts stated are accurate and the opinions given are fair. Neither CBRE, nor any director or employee of
CBRE shall in any way be responsible for the accuracy of the data obtained from reasonable sources.

Chapter 5
Policy ecosystem in
India to embrace ESG
and SDG goals

5.1 India’s policy timeline with respect to sustainability reporting
In May 2017, SEBI issued guidelines for

The Securities and green bond issuance specifying the In 2021, SEBI adopted Business Responsibility and
In 2008, the National Exchange Board of India (SEBI) disclosure requirements. Sustainability Reporting against the backdrop of
Action Plan on Climate Change made it mandatory for the top ESG (refer Annexure – III). This is an update on the
(NAPCC) was formulated with 100 listed entities based on In October 2017, the Report of the Committee on previously used Annual Business Responsibility
a vision to outline the broad market capitalisation at BSE Corporate Governance proposed that the board of Reports (ABRR) which was a part of the disclosure
policy framework for mitigating and NSE to publish annual directors shall meet at least once a year to specifically requirements of the ‘National Voluntary Guidelines
the impact of climate business responsibility report discuss strategy, budgets, board evaluation, risk on Social, Environmental and Economic
change. (ABRR). management, ESG and succession planning. Responsibilities of Business’ (NVGs).
2008 2012 2017 2021
2011 2013 2018

The Climate Change The Ministry of Corporate Affairs The NITI Aayog designed and
Finance Unit (CCFU) was imposed mandatory reporting of developed the SDG India Index
formed in 2011 within the the progress on Corporate Social which measures the progress in
Ministry of Finance as a coordi- Responsibilities (CSR) under the the journey of meeting the global
nating agency for the various Companies Act, 2013. goals and targets at a national
institutions responsible for and state level. The index covers
green finance in India. all 17 goals, 70 targets and 115
indicators.
Source: Green Finance in India_Progress and Challenges_RBI Bulletin_Jan 2021; CBRE India Research, Q1 2022
Source: Green Finance in India_Progress and Challenges_RBI Bulletin_Jan 2021

Certifications and reporting standards (Annexure IV)

5.2 Benefits and policy incentives for certified green buildings

The central and state governments in India are offering various incentives to promote green buildings under different rating systems. The Government of India (GoI) offers 30% of the installation cost of the rooftop solar panels as subsidy to the
institutional, residential and social sectors in most states. In addition, beneficiaries can avail a generation-based incentive wherein they can receive INR 2 per unit of generation, if the generation exceeds 1100kWh- 1500kWh per year. Further, the excess
power can be sold at a tariff set by the government.
Table 5.2.1: Sustainability incentives offered by governments across the country
IGBC GRIHA
• MoEFCC: Fast-track environmental clearance for projects which are pre-certified or provisionally certified by
GRIHA.
• Ministry of Environment, Forests, and Climate Change (MoEFCC): Fast-track • SUNREF* India (affordable green housing): Financial incentives under SUNREF India would be provided to
Central government environmental clearance for projects pre-certified or provisionally certified by the GRIHA-certified 4- and 5-star projects. (For homebuyers, PLIs, housing project developers).
IGBC.
• Ministry of Urban Development notification for local authorities: Incentivize and provide 1 – 5% extra ground
coverage and FAR for projects with more than 3,000 sqm. plot size on the basis of GRIHA evaluation.
Delhi NA • MPD 2021: 1 – 5% extra ground coverage and FAR; to be provided by local bodies based on the rating criteria
prescribed by GRIHA for green buildings.
• Housing and Urban Planning Department, Government of Uttar Pradesh: • Housing and Urban Planning Department, Government of Uttar Pradesh: Additional 5% FAR free of charge
Additional 5% FAR free of charge for projects rated gold or above by the IGBC. for projects with 4- or 5-star GRIHA rating.
Uttar Pradesh
• Greater Noida Industrial Development Authority (GNIDA): Additional 5% FAR • NOIDA and Greater NOIDA: Additional 5% FAR free of charge for projects of plots size 5,000 sqm and above
free of charge for projects rated gold or above by the IGBC. with a 4- or 5-star GRIHA rating.
• The Haryana Building Code 2017, Government of Haryana: GRIHA-rated projects can have additional FAR of
• Town & Country Planning Department, Government of Haryana: Additional FAR up to 15%.
Haryana of 9%, 12% and 15% for green buildings rated Silver, Gold and Platinum by the IGBC,
respectively. • Government of Haryana: 3%, 6%, 9%, 12% and 15% additional FAR for all buildings (except plotted residential
developments) with 1-, 2-, 3-, 4- and 5-star GRIHA rating, respectively.

IGBC GRIHA
• The Department of Urban Development: Additional FAR of 3%, 5% and 7% for • The Department of Urban Development (under Unified Development Control and Promotion Regulations):
green buildings rated silver, gold and platinum by the IGBC, respectively. Additional FSI of 3% for 3-star, 5% for 4-star and 7% for 5-star rated buildings on submission of Green Building
• Pune Municipal Corporation (PMC) and Pune Metropolitan Region Development Certificate from GRIHA.
Authority (PMRDA): Additional FAR of 3%, 5% and 7% for green buildings rated • Government of Maharashtra: Minimum 3-star GRIHA rating mandatory for all buildings belonging to
Maharashtra Silver, Gold and Platinum by the IGBC, respectively. government, semi-government and local bodies as well as public sector undertakings.
• Public Works Department (PWD), Government of Maharashtra: All new government buildings in Maharashtra or renovation of existing buildings to be carried out as per the suitable IGBC Green
Building Rating system or GRIHA rating system.
• The state also has a Green Building Policy.
• Industries & Commerce Department: 25% subsidy on total fixed capital

investment of the project (excluding cost of land, land development, preliminary • Industrial Development Policy 2015 – 2020 by the Government of Andhra Pradesh: GRIHA Incentives: The
and preoperative expenses, and consultancy fees) for buildings which obtain a government will provide 25% subsidy of up to INR 50 crore on total fixed capital investment of the project
green rating from the IGBC (applicable for MSMEs and large industries).
Andhra Pradesh (excluding cost of land, land development, preliminary and pre-operative expenses, and consultancy fees) for
• Municipal Administration and Urban Development Department: 20% reduction on industries which obtain green ratings from GRIHA.
permit fees; additionally, if the property is sold within 3 years, one-time reduction of
20% on duty on Transfer of Property (Surcharge on Stamp Duty) on the submission
of Occupancy Certificate issued by the local authority.
• While the government is in the process of bringing a green building code for new as well as existing warehouses and data centres, there are no current policies in the state that incentivize green
Telangana buildings under any rating systems.
• Though Karnataka ranks at the top of The State Energy Efficiency Index 2020 [developed by the Bureau of Energy Efficiency (BEE) and Alliance for an Energy Efficient Economy (AEEE)] which includes
Karnataka ECBC- compliant construction as one its parameters, the state does not have specific policies to incentivize green buildings.
• Industries Department, Government of Tamil Nadu, (TN Industrial Policy 2021):

25% subsidy on the cost of setting up environmental protection infrastructure, (with • Industrial policy: 25% subsidy on the cost of setting up environmental protection infrastructure for industrial
Tamil Nadu a limit of INR 1 crore) for industrial projects that obtain IGBC green certification. The projects with a GRIHA rating.
incentive will be available for projects establishing or expanding industrial units,
industrial parks, R&D projects, warehousing, and logistics parks.
• Department of Municipal Affairs, Kolkata Municipal Corporation: Additional 10%

FAR for projects which are pre-certified/ provisionally certified as gold or above by • Department of Municipal Affairs, Kolkata Municipal Corporation: 10% additional FAR for green buildings as
West Bengal the IGBC. per the rules notified by Kolkata Municipal Corporation. Sanction of building plans and grant of additional FAR
• New Kolkata Development Authority: Additional 10% FAR for projects pre- to be allowed on the basis of pre-certification by the agencies.
certified/ provisionally certified as gold or above by IGBC.
*SUNREF India – For promoting affordable green housing, in 2017, the National Housing Bank (NHB) and the French Development Agency (AFD) signed a Credit Facility Agreement for a non-sovereign loan of EUR100M, and a Grant Facility
Agreement of EUR12M financed by the European Union’s Asia Investment Facility (AIF), in favour of affordable green housing.
Source: IGBC, GRIHA India, Various state government policies, CBRE India Research Q1 2022

5.3 Sustainable Finance

Collaborative
Before COVID-19, it was estimated that India needs over USD 2.6 trillion to meet the
SDG targets by 2030. In this regard, India’s Department of Economic Affairs (DEA)
and Ministry of Finance (MoF), in collaboration with the United Nations Development
Programme (UNDP) India, launched the Sustainable Finance Collaborative (SFC) on
26 August 2020.
In September 2021, amid the growing global focus on the economic impact of ESG,
the government set up a key task force under the economic affairs secretary to lay
out a concrete roadmap to bolster India’s sustainable finance architecture. As a part
of this initiative, a survey is being undertaken with the help of the UNDP (India) to
assess climate and ESG resilience in India’s financial sector.
5.4 Energy Conservation

Building Code (ECBC)
Since building and construction accounts for over 35% of the energy consumption in
India, there is a huge potential of energy conservation in this field, as over 200 million
sq. ft. of only office space is expected to enter the market by 2025. Recognizing this
potential and to bring energy efficiency in commercial buildings to the mainstream,
the Government of India, through the Bureau of Energy Efficiency (BEE), launched
the Energy Conservation Building Code (ECBC) in 2007 and has developed a rating
for existing projects. Until December 2016, 10 states had made ECBC mandatory for
commercial buildings through a notification in their state gazettes while another 10
states were in advanced stages of making it mandatory7.
7 Rolling Out Energy Conservation Building Code (ECBC), UNDP GEF and BEE
7. Rolling Out Energy Conservation Building Code (ECBC), UNDP GEF and BEE

Chapter 6
Understanding
global sustainability
reporting standards
and best practices

6.1 Global best practices on policies for reporting

standards and frameworks
Across the world’s 50 largest economies, there are now over 730 hard and soft law policy revisions across the 500 policy instruments8 that support investors in their
consideration of long-term value drivers, including the ESG factors.
Voluntary Global Frameworks Gaining Traction

A number of NGOs globally are encouraging asset owners, asset managers and corporates to voluntarily adopt ESG standards, the largest of which are
UN PRI, SASB and the GRI. Further, there is an evolving regulatory framework anchored by the EU Sustainable Finance Disclosure Regulation (SFDR)
and UK Sustainability Disclosure Requirements (SDR) alongside associated taxonomy legislation (which essentially defines investments that can be
environmentally sustainable). The European Commission is eventually expected to endorse industry-appropriate SFDR regulatory technical standards that
will apply from July 2022.
Figure 6.1.1: Standards and influencers in the voluntary reporting framework ecosystem
PRI SASB
Principles for Sustainable
Responsible Accounting
Investing Standards
Board
IIRC
GRI International
Global Integrated
Reporting Reporting
Initiative Council WDI Other Emerging
Workforce
Disclosure Frameworks
Initiative
CDP
TCFD Carbon
GRESB Task Force on Disclosure
Global Real Climate- Related Project
Estate Financial
Sustanability Disclosure
Benchmark
Influencers
Standards
Source: ESG Considerations Beginning to Re-Shape Investment Management, Citibank; CBRE India Research, Q1 2022
8. ESG Considerations Beginning to Re-Shape Investment Management, Citibank

6.1.1. United Nations’ Principles for Responsible Investing Figure 6.1.1(b): PRI: A widely adopted reporting standard globally with 4,375 signatories as of September 2021
(UN PRI)
Headquartered in the UK, the PRI is an investor initiative in
partnership with UNEP Finance Initiative and UN Global Compact. It
works to understand the investment implications of the ESG factors.
It also supports its signatories in incorporating these factors into
NORDIC
their investment and ownership decisions. NETHERLANDS
COUNTRIES
135 309
The six principles of the PRI initiative are a voluntary set of investment
BENELUX
guidelines that offer a menu of possible actions for incorporating ESG UK & IRELAND
CEE &CIS
tenets into investment practice. CANADA
760 119
201 37
FRANCE GERMANY & AUSTRIA
Figure 6.1.1(a): Six principles of responsible investment 343 250
US CHINA
SOUTHERN JAPAN
874 1
EUROPE SWITZERLAND 72 99
Incorporate ESG issues into investment analysis
PRINCIPLE #1 and decision-making processes. 234 187
MIDDLE EAST
Be active owners and incorporate ESG issues into

27
REST OF ASIA
PRINCIPLE #2 ownership policies and practices. LATIN AMERICA
(EX. BRAZIL)
181
96 AFRICA
PRINCIPLE #3
Seek appropriate disclosure on ESG issues by the entities in which 105
companies that are members / signatories of PRI Invests. AUSTRALIA & NZ
BRAZIL
242
106
Promote acceptance and implementation
PRINCIPLE #4 of the principles within the investment industry.
Work together to enhance the agency’s effectiveness

PRINCIPLE #5 in implementing these principles.
Report on activities and progress towards

PRINCIPLE #6 implementing the principles.
Source: PRI Update, Q4 2021, PRI; CBRE India Research, Q1 2022

6.1.2. Taskforce on Climate-related Financial Disclosures (TCFD)

The TCFD was established by the Financial Stability Board (FSB) in December 2015, with an aim to develop recommendations for more effective voluntary
climate-related disclosures that could promote more informed investment, credit and insurance underwriting decisions. These decisions could in turn enable
stakeholders to understand the concentration of carbon-related assets in the financial sector and the financial system’s exposures to climate-related risks.
Drafted in 2017, the recommendations on climate-related financial disclosures are structured around key areas that represent core elements of how an
organization operates.
Figure 6.1.2: Core clements of recommended climate-related financial disclosures
Risk Metrics &

Governance Strategy Management Targets
Disclose the Disclose the actual Disclose how the Disclose the metrics
company’s and potential company identifies, and targets used to
governance around impacts of climate- assesses, and manages assess and manage
climate-related risks related risks and climate-related risks. relevant climate-
and opportunities. opportunities on the related risks and
company’s businesses, opportunities where
strategy, and financial such information is
planning where such material.
information is material.
Source: TCFD 2021 Status Report; CBRE Research, Q1 2022
As part of the taskforce’s annual financial and reporting processes, the TCFD’s recommendations endeavor to encourage organizations to evaluate and
disclose climate-related risks and opportunities that are most pertinent to business activities.

6.1.3. Global Real Estate Sustainability Benchmarks (GRESB)

Incorporated in 2009, GRESB is the global ESG benchmark for financial markets and consists of an With the available data on ESG, GRESB Real Estate Assessment produces two benchmarks:
independent foundation and a benefit corporation. It collects, validates, scores and benchmarks
ESG data to provide business intelligence and regulatory reporting solutions to investors, asset + The GRESB Real Estate Benchmark, which considers management and performance factors
managers and the wider industry. GRESB generates the following ESG benchmarks for the + The GRESB Development Benchmark, which considers management and development factors
industry:
• Real Estate Benchmark

The real estate assessment involves three parts:
• Real Estate Development Benchmark
• Infrastructure Fund Benchmark THE MANAGEMENT

ASSESSMENT
• Infrastructure Asset Benchmark
In 2021, participants of the Real Estate Benchmark grew by 24% y-o-y to 1,520 from 1,229 in 2020, Measures an entity’s strategy and leadership, policies and processes,
demonstrating the growing interest among stakeholders. This is the highest percentage increase risk management, and its stakeholder engagement approach.
since 2012 and a new peak in terms of the number of participants. The GRESB benchmark now
covers USD5.7 trillion of AUM (up from USD4.8 trillion in 2020) in real estate and infrastructure
value including over 117,000 geo-coded assets that are reported at the asset level. THE PERFORMANCE
ASSESSMENT
Figure: 6.1.3 Number of participants across the globe

Measures an entity’s asset portfolio performance drawn from
information collected at the asset and portfolio levels.
1600
1400
1200 THE DEVELOPMENT
ASSESSMENT
# of Participants
1000
800
Measures an entity’s efforts to address ESG issues during a
600
building’s design, construction, and renovation phases.
400
200
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: GRESB; CBRE Research Q1 2022

Chapter 7
Successful
international
case studies

7.1 Singapore
Across the globe, different countries, states and cities have implemented various policy measures that align with ESG-
related goals. One such example is the densely populated Singapore which has managed to be one of the most carbon-
efficient economies of the world.
Table 6.1 Country-level case study
SINGAPORE'S GREEN BUILDINGS
Targets Key ideas

• The country targets to have 80% of its built • All buildings are required to
environment ‘green’ by 2030 meet a minimum environmental
• Overall Net Zero target – as soon as viable sustainability standard
in the second-half of the century • Circularity through recycling in
construction
• Use of sustainable materials and
Programmes
technologies to reduce emissions,
(specific to construction industry)
minimize carbon footprint and
• Green Mark Incentive Scheme’ reduce waste
• Super Low Energy programme • Creating an enabling environment Other policies: Green finance action plan:
• Building Retrofit Energy Efficiency through policies
Financing Scheme Strengthen financial sector resilience Guidelines on environmental risk management:
to environmental risks: • Green and Sustainable Bond and Loan Grant Scheme
• Skyrise Greenery Incentive Scheme
• Develop market and solutions for a • USD 2 billion MAS (Monetary Authority of Singapore)
• Quieter Construction Innovation Fund
sustainable economy Green Investment Programme
Source: International Good Practice Principles for Sustainable Infrastructure, UN; Monetary Authority of Singapore; • Harness technology to enable trusted and • SGD 1.7 million Global FinTech Innovation Challenge
CBRE India Research Q1 2022
efficient sustainable finance flows
• Asia-focused Climate Research and Training
• Build knowledge and capabilities in
sustainable finance • Sustainable Finance Verification, Review and Rating
Along with the requirement of meeting a minimum environmental sustainability standard, these schemes are geared towards
Services
addressing a range of environmental, social, and economic considerations. The success of Singapore’s green building story
can definitely be viewed as a model for other cities of the world.
On individual project level, while quantitative value of implementation of all ESG parameters is not easy to determine, the
benefits that the “environmental” aspect brings have been documented for a lot of projects. Here we present some case
studies to show the measures implemented and the benefits derived:

7.2 Netherlands
THE EDGE
YEAR OF
COMPLETION AREA (SQ FT) LOCATION
2014 430,556 Amsterdam, Netherlands
CERTIFICATIONS
BREEAM NL New Construction (98.3% Score - Outstanding)
DESIGN ELEMENT
• Every workspace is within 7 meters (23 feet) of a window.
• In the building, a new LED lighting system has been co-developed with Philips. The Light over Ethernet (LoE) LED
system is 100% IP based and powered by Ethernet. This makes the system centrally controllable through a computer.
It also helps in implementing changes quickly and conveniently, without opening suspended ceilings. Each luminaire
is also equipped with a ‘coded-light’ system for highly precise localization via smartphone in comparison to Wi-Fi
or beacon systems.
• Anonymous remote tracking of occupancy in the building.
EFFICIENCY BENEFIT
• 30,000 sensors continuously measure occupancy, movement, lighting levels, humidity, and temperature and are
integrated with the project’s Ethernet-powered LED lighting system, allowing it to automatically adjust energy use. • The project consumes around 50% energy for • Prediction of lunchtime occupancy based on
• Rainwater is collected on the roof and harvested to flush toilets and irrigate the green terraces in the atrium and cooling in comparison to a typical Dutch office real-time historical data and traffic and weather
other garden areas surrounding the building. building, as the LED lighting system used reduces information to avoid food wastage.
• Two 129 m deep wells reach down to an aquifer, allowing thermal energy differentials to be stored deep underground. the energy requirement by about 50% compared to
• Unused rooms are skipped for cleaning.
conventional lighting.
• Over a period of 10 years, the building is estimated
• Heating, cooling, fresh air, and lighting are fully
to save 42 million kilograms of CO2 as compared to
integrated with the Internet of Things (IoT) and
Source: The Edge, Amsterdam, BREEAM; CBRE India Research Q1 2022 a typical office building.
controlled by a Building Management System
(BMS) per 200 sq. ft. based on occupancy i.e. with
zero occupancy, there is next-to-zero energy use.

7.3 USA
WILLIS TOWER
YEAR OF
1969 3,800,000 Chicago, USA
(Refurbishment
Completed in 2019)
CERTIFICATIONS
LEED v4.1 Recertification (80 points - Platinum)
DESIGN ELEMENT
• Renovation of the building's LED antenna lighting system.
• Installation of high-efficiency lighting systems with improved controls to reduce energy consumption.
• Indoor bicycle parking, showers, changing rooms, complimentary loaner bikes, helmets, and locks provided.
• Along with the new building automation management system, improvement to the building's HVAC exhaust and
return fan dampers enabled better control of temperatures in the building and reduced energy usage.
• Introduction of all new air media, fan gearboxes and fan blades, along with the installation of new variable frequency EFFICIENCY BENEFIT
drives to all four of the building's cooling towers. • In the last 20 years, it has reduced annual • Tenant bike riding programs.
• Enhanced integrity of electrical infrastructure through replacement of the building's automatic transfer switches. electricity consumption by 34%.
• Tenants driving hybrid vehicles incentivized
• Installed high-efficiency lighting systems with improved controls to reduce the building’s energy consumption. • Tenants recycled over 2,103 tons of paper, through parking discounts.
• Retrofitted building restroom lighting with low energy ballasts, bulbs, and occupancy sensors. aluminum, glass, plastic, and construction
• Low-flow, high-efficiency units installed on more
• Installed window-shading to reduce cooling needs during warm months and heat loss through the windows during waste annually, as part of the building’s recycling
than 450 sinks, 650 toilets & urinals, saving around
colder months. program.
11 million gallons of water consumption annually
• Improved indoor air quality and reduced waste by implementing “green” cleaning program. • Increased building recycling rate from an average of and reducing the building's water usage by 30%.
• Testing its ability to absorb storm water and reduce urban heat island effect; the building installed a mock-up of the 10 tons per month in 2007 to more than 56 tons per
• Window replacement to improve insulation.
world’s tallest “green roof” on the roof of the 90th floor. month in 2009.
• Enhanced lighting systems and controls, higher
• Annual saving of more than 10 million gallons of
efficiency motors and management practices
water.
Improved energy efficiency.
Source: USGBC; Willis Tower; CBRE India Research Q1 2022 • 16 tons of electronics recycled in over one year.
• Use of harmful chemicals reduced by
• The modernization of HVAC system helped supply implementing green cleaning and maintenance
the chillers with lower temperature condensing programs.
water, resulting in an around 20% saving on the
• Implemented new staffing procedure to reduce
electric energy consumed by the cooling towers.
number of lights on at night for energy savings.
7.4 India
SUZLON ONE EARTH
YEAR OF
2009 762,785 Pune, India
CERTIFICATIONS
Platinum LEED India NC and GRIHA 5 - star certified building
DESIGN ELEMENT
• High-performance glazing used. U value – 0.32 Btu/hr.ft2.ºF; Solar Factor – 0.26 which is less than 0.3 prescribed by
ECBC for moderate climate zones.
• Dimmable ballasts in conjunction with daylight sensors are used throughout the open office space.
• Installed capacity of solar energy: 13.44 KW.
• Installed capacity of wind energy: 18 windmills of 4.75 KW each.
• Use of Siporex fly-ash blocks for better insulation.
• General lighting at 350 Lux. EFFICIENCY BENEFIT
• The brightness of artificial lights can be increased and decreased from 0% to 100% depending on the adequacy of
available daylight to meet the 350lux requirement. • The campus saves 65% of energy by utilizing LED • 55% water recycled and reused within the complex
open-air lighting systems.
• Task lights have an intelligent built-in occupancy sensor in conjunction with a continuous dimmer. • 50% reduction in landscape water consumption
• Lighting of individual offices is controlled basis the daylight and occupancy sensors. • 8% of annual energy is produced by photovoltaic by planting native species of trees and shrubs and
• 90% of the luminaries in the office space have dimmable ballasts and are either connected to ‘Occulux’ sensors, boards and windmills with an absolute gradual by using efficient irrigation systems.
daylight sensors or ‘Occuswitch’ sensors. expense of about 11%.
• 250,000 units of electricity generated annually.
• Lighting Power Density (LPD) of the whole building area method is 0.8 W/ sq. ft. • 92% of the energy consumed is through
• 37% reduction in quantity of structural concrete
• Flexible variable refrigerant volume system to maintain desired temperature. sustainable energy modes, making it a Zero
by using Post Tension slabs.
• Pre-cooling and heat recovery at Treated Fresh Air (TFAs): A sensible heat exchanger is used as pre-cooler to sink Energy Project.
the temperature of incoming air (say 38.4°C DBT approx.) to approx.27.66°C. • 50% reduction in quantity of structural steel by
• 65% reduction in building water consumption by
• Use of direct-indirect evaporative cooling. using Post Tension slabs.
use of low-flow fixtures.
• Dust screens provided around construction areas to prevent air pollution.
• Soil erosion control measures adopted on site.
• The project adopted passive architectural design strategies:
» The façade of the building faces north, south, north-west, and south-east.
» External louvers shades 100% surface area on the first and second floor.
» Partly self-shading blocks.
• Small terraces created in all blocks to promote interaction with external environment.
Source: Suzlon; CBRE India Research Q1 2022

Chapter 8
The way forward –

What to expect in the
future?
In Asia and Africa, the total building stock is expected to double by 2050. In addition,
the material used is expected to more than double globally by 2060, with building and
construction to account for a nearly one-third share9 . Hence, it will be important for the
building and construction sectors to inculcate ESG practices throughout the lifecycle of
the projects for a sustainable future.
8.1 Regulatory requirements will

continue to tighten
The number of ESG regulations affecting property owners have soared over the past decade, as governments
and industry bodies increasingly mandate green reporting standards.
Internationally, the UK’s TCFD, a new international standard for reporting climate risks, will be mandatory for
all fund managers by 2025. Eight jurisdictions, including the EU, have already adopted the TCFD standards.
In India, SEBI in 2021 issued new sustainability related reporting requirements ‘Business Responsibility
and Sustainability Report’ (BRSR) – for the top 1,000 listed companies by market capitalization. More
such regulations are expected to be passed over time as we proceed from COP21 to COP26 and aim to
achieve global sustainability targets.
As the trend towards tighter green compliance accelerates, investors and developers must ensure that
they have the expertise to keep pace with a rapidly evolving regulatory environment. Developers and
investors who align their working practices with ESG requirements on a pre-emptive basis are expected to
stay ahead of the curve and are likely to face minimum hindrances in business operations from a regulatory
aspect.
9. 2021 Global Status Report for Building and Construction, Global Alliance of Buildings and Construction, and
UN Environment Programme, October 2021

8.2 Benchmarking and reporting

will be essential
As pressure on the corporate world to contribute to ESG goals increases, the measurement of that contribution has become
more pressing to ensure that everyone is ‘doing their bit’ and ‘playing by the same rules’. As a result, sustainability reporting
standards and benchmarks are anticipated to gather steam.
As investors attempt to monitor and evaluate asset-level ESG performance, the use of benchmarking tools such as GRESB
will become increasingly prominent.
In India, besides the BRSR framework, there are very few mandatory ESG disclosure requirements for corporates. Currently,
ESG reporting remains a focus area for large-listed companies, but it is important that smaller/mid-sized companies start
assessing their ESG risks and opportunities.
As investments start to flow in on the basis of ESG compliance/ratings, lenders/investors will rely on reliable information
to make informed decisions. This is why reporting and disclosures will gain significant prominence, by all stakeholders,
including governments. For instance, the Reserve Bank of India formed a Sustainable Finance Group (SFG) in May 2021 and
the group is expected to lay down rules of ESG based lending. Also, the State Bank of India, the country’s largest lender is
chalking a strategy to disburse loans on the basis of ESG scores.
8.3 Technology will be critical for

achieving ESG goals
As the focus on ESG strengthens, technology will play a key role in creating significant and long-lasting
change within investors’ practices and portfolios by enhancing the collection and reporting of ESG data.
These technologies include data management platforms to store and process ESG data, monitoring
platforms to streamline ESG review and delivery processes, and PropTech-based platforms to enhance
tenant experience.
Enablement technologies to monitor and enhance the energy performance of buildings will also see greater
adoption. Technology that can be plugged into a property’s Building Management System (BMS), retrieve
energy data in real time and arrange and analyze it to determine the best strategy to improve energy
efficiency and reduce costs will be crucial.
10. Global Alliance for Building and Construction, 03 December 2021

8.4 Green finance will gather steam

The G20 uses the term “Green Finance” as a broad umbrella term that refers to the major shift in financial flows required to support projects that benefit the environment and
society by reducing pollution or tackling climate change.
Climate finance (a subset of green finance) refers to any type of financing that is drawn from public, private or alternative sources of financing with the aim of supporting
actions that will address or mitigate climate change. The sustainable finance route enables the public or private issuer of sustainable bonds an easy access to low-cost capital
to finance their sustainable projects by issuing and listing such bonds on the stock exchanges.
As per the Climate Policy Initiative, global climate finance averaged around USD 630 billion in 2019 and 2020. Further, it is estimated that the transition to a net zero carbon
emission world would require investments to increase by nearly eight times from the existing levels, resulting in the requirement of over USD 5 trillion annually as investment
through 2030 (Fig 8.4.1).
Figure 8.4.1: Globally Tracked Climate Finance Flows

(USD bilion)
6000
5000
4000
3000
2000
1000
0
2011-2020 2021F 2030F 2040F 2050F
Actual Future climate finance necessary
Climate finance to maintain 1.5oC Pathway
Source: United Nations; Climate Policy Initiative; CBRE Research, Q1 2022
ESG is no longer a "feel good factor" but now forms the basis of quantifiable, investment decisions. In India, the Assets under management (AUM) of ESG funds in 2021 added upto
INR 123 billion (USD 1.63 billion), nearly five times the AUM from two years ago. There are around 10 ESG mutual funds in India ( with some of these funds holding shares of RE players
as well) today and multiple ESG indexes for investors to benchmark their returns*. Since the traditional methods of financing would not be enough to meet the 2030 and 2050 goals,
new and innovative ways of financing such as sustainable finance, climate finance, green bonds, green lending, sustainable bonds etc. would gain traction.
In India, the SEBI had put in place the regulatory framework in 2017 for issuance of green bonds and the corresponding listing requirements of such bonds on the stock exchanges. In
2021, India issued green bonds worth USD 16.5 billion and we expect this number to jump significantly as the focus on green bonds issuance was reiterated in the Union Budget 2022-
23. Further, the RBI had liberalized the ECB norms to enable green projects across industries and sectors to tap this window for raising finance.
* Business Standard, December 2021

8.5 Focus on energy

efficiency in buildings Figure 8.5.1: Status of adoption of building energy codes globally
will increase
As per the International Energy Agency’s (IEA) net zero
energy scenario, it is possible to nearly eliminate carbon
emissions from the buildings by 2050 through energy
efficiency measures coupled with a higher adoption of
renewable sources of energy such as solar, thermal and
bioenergy. It is estimated that electrification and energy
efficiency would account for about 70% of the building-
related emission reductions until 2050, followed by
the adoption of renewables such as solar, thermal and
bioenergy, and behavioral changes.
Against the backdrop of the target to eliminate carbon

emissions from the built environment, energy audits are
expected to play a critical role in achieving energy and
cost savings. These audits go a long way in identifying and
designing cost-effective energy savings opportunities.
Building Energy Code
Energy efficiency and energy codes in buildings are Mandatory
the second-most frequently cited actions within all Voluntary
Nationally Determined Contributions (NDC). Since In development
2015, the coverage of buildings under NDC has gone up No know code
from 90 to 136 countries12, including India. Furthermore,
New or update code
as of November 2021, 80 countries have developed
building energy codes, compared to 62 in 2015. The trend
is expected to continue going forward too as the policy
landscape continues to evolve.
Source: International Energy Agency; CBRE Research, Q1 2022
12 The Global Risks Report 2022, World Economic Forum, January 2022; CBRE India Research, Q1 2022

Chapter 9
How CBRE can

support the CRE
industry in defining
and achieving their
ESG goals?
9.1 CBRE’s commitments

towards ESG
In recognition of our progress on ESG, we are the only commercial real
estate services provider included in the Dow Jones Sustainability World
CBRE Achievements
Index. In late 2020, we signed the Business Ambition for 1.5°C commitment
by 2040, a campaign led by the Science Based Targets initiative (SBTi)
in partnership with the UN Global Compact and the We Mean Business
coalition. This encompasses carbon emissions from the properties that
we manage for investors and occupiers as well as indirect supply chain Ranked #24 Ranked #22 Earned a spot on the
emissions. CBRE committed to science-based GHG reduction targets with
a goal of cutting own operational emissions by over two-third by 2035. Overall and the top- on the 2021 Barron’s FTSE4
As a part of our 2040 net-zero emissions strategy, CBRE also signed The
Climate Pledge, a commitment to achieving net-zero carbon 10 years
ranked real estate
company on 3BL Media’s
100 Most Sustainable Good Index
Companies list. for the eighth consecutive
ahead of the goal stated in the Paris Agreement.
100 Best Corporate
year.
Citizens of 2021.
Quantifying our targets
We have committed to achieving 100% renewable electricity by 2025

and transitioning our vehicle fleet to electric vehicles. We will curb CBRE's industry-leading international green building consulting team is working in conjunction with experienced technical colleagues on
emissions in the facilities that we manage for occupiers worldwide the ground to provide our clients world-class green building advisory. Until date, we have certified more than 600 projects using various
by 79% per sq. ft. by 2035. For properties that we manage for versions of the green building rating tools, ranging from new and existing buildings, building interiors to occupant wellbeing. CBRE’s extensive
investors worldwide, CBRE will reduce emissions by 67% per sqm. experience in building marketing & leasing, property and facility management, and green tenant representation allows us to provide clients
over the same time frame. We plan to achieve our Scope 3 target with a holistic, outcome-oriented approach to sustainability consulting that goes beyond the basic achievement of the certification itself, but
through a partnership with our Global Workplace Solutions (GWS) also helps the client manage the buildings in environmentally and financially sustainable manner throughout the whole building life cycle.
and Property Management clients. We manage nearly 650 million
sqm. of corporate facilities and commercial properties worldwide.

CBRE supports, endorses and/or engages in CBRE is a member of these leading

a number of external initiatives, including: organizations:
• Boston College Center for Corporate Citizenship (BCCCC) and

• Building Research Establishment Environmental its professional Services Sustainability Roundtable (PSSR)
Assessment Method (BREEAM)
• Building Owner and Managers Association (BOMA)
• CEO Action for Diversity & Inclusion
• Building Owners and Managers Institute (BOMI)
• Carbon Disclosure Project
• Business Roundtable
• Environmental Protection Agency (EPA) ENERGY STAR
• Catalyst
• Fitwel Standard
• Corporate Eco Forum
• Greenhouse Gas (GHG) Protocol
• Corporate Electric Vehicle Alliance (CEVA), Led by Cenes
• GRI Standard
• Global Real Estate Sustainability Benchmark (GRESB)
• International Organization For Standardization (ISO) I 4001
• Global Reporting Initiative (GRI) Community
• Leadership in Energy and Environmental Design (LEED)*
• International Council of Shopping Centers (ICSC)
• Occupational Health and Safety Assessment Series
(OHSAS) 18001 • International Well Building Institute (IWBI)
• Principles for Responsible Investment (PRI) • NAIOP, the Commercial Real Estate Development Association
• Science Based Targets initiative (SBTi) • Real Estate Roundtable (RER) and its Sustainability Policy
Advisory Committee (SPAC)
• SASB Standards
• Renewable Energy Buyers Alliance (REBA)
• Task Force for Climate-Related Financial Disclosures
(TCFD) • Sustainability Accounting Standard Board (SASB) Alliance
• United Nations Global Compact (UNGC) • U.K. Green Building Council (UKGBC)
• United Nations Guiding Principles on Business and Human • U.S. Green Building Counscil (USGBC)
Rights
• United Nations LGBTI Standard of Conduct for Business
• We Mean Business
• Well Building Standard (WELL)
• Women’s Empowerment Principles (WEPs)
• World Green Building Council (World GBC) and its
Advancing Net Zero program

9.2 CBRE’s framework for environmental

considerations across an occupier’s lease /
ownership lifecycle
Across the real estate lifecycle, occupiers arrive at varied decision points to progress on their ESG goals. In
our endeavor to steer its clients on this journey, CBRE has arrived at the following framework that explores
environmental considerations that occupiers should focus on throughout their property lease or ownership cycle.
MEASURE
• Business strategy and
resources
• Metrics and specifics
• Materiality, consistency and
OPERATE transparency
• Improve operations and PLAN

enhance asset performance • Climate change risk profile
• Promote and support • Renewable energy strategy
sustainable travel
• Green commute options
• Inform and influence
organisational behavior • Sustainable business improve-
ment districts
• Role of partners and
suppliers
BUILD TRANSACT
• Sustainable building • Traditional lease vs
certification flexible space
• Energy-efficient • Green leasing
opportunities • Landlord engagement
• Material selection • Sustainable building
• Role of partners and certification
suppliers
Source: Purpose Driven: Corporate Real Estate's Role in ESG Agenda,

CBRE September 2021; CBRE India Research, Q1 2022

9.3 How CBRE India can help?

ESG is far beyond mere good intent. It's about creating a tangible plan that achieves real and measurable results. We help clients to tackle the key challenges of today and capture
the vast opportunities that the future holds. Enlisted below are some of the key services that we provide to clients to help them achieve their ESG goals:
Design advisory and management Sustainability and Smart Building Advisory Pre-investment Diligence
— Vision management — ESG framework preparation Review of ESG compliance by developers as part of
pre-investment diligence on behalf of funds / lenders:
— Design governance — LEED, IGBC and GRIHA certifications
— Assessment of environment related compliances
— Project risk management — GRESB consultancy
— Assessment of Occupational Health & Safety
— Value engineering and — Ashrae audit services Compliance
management
— ISO 50001 certification — Assessment of labour & working conditions
— Stakeholder management and related compliance
content coordination — Energy management
— Social assessment
— WELL Building Standard — Space utilization and optimization
consultancy — Climate assessment
— Security and safety services
— Location services such as equipment
and people tracking
WHY CBRE?
Advisory on governance and — Operational maintenance
social aspects + Network of inhouse design, architecture,
— Carbon footprint reporting and engineering discipline leads and urban
— Management concept planners
development — Rooftop solar consultancy
+ Proficient pool of sustainability and WELL
— Governance process flow design — EV charging setup & installations certified professionals
— Social Impact Assessment — Smart Eco Industrial Town Development + Usage of value-added tools such as virtual
visualization for gap analysis, and Building
— Social return on investment — Smart energy use in industrial parks Information Modeling (BIM) for clash
detection
— Benchmarking sustainability — Defining sustainability/ SDG rating tools and
practices benchmarks for projects + Data driven strategy to prioritize activities
and identification of areas requiring
improvement

Chapter 10
Annexures
Annexure - I
India’s Nationally Determined Contributions, 2015 brief
The first Intended Nationally Determined Contribution (INDC) for 2021 to 2030 includes:
• Reduction of emissions intensity by 33–35% from 2005 levels
• Achieving 40% installed capacity of cumulative electric power through non-fossil-based energy resources with international support
• Creating an additional carbon sink of 2.5–3 GtCO2e through additional forest and tree cover.
There are numerous policies in effect under the National Action Plan of Climate Change (NAPCC), including National Missions for Solar, Enhanced Energy Efficiency,
Sustainable Habitat, Water, Green India, Sustainable Agriculture, etc. Other focus areas include:
• Developing climate resilient urban centers: Schemes include Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), National
Heritage City Development and Augmentation Yojana (HRIDAY), etc.
• Smart and sustainable green transportation network: Schemes include Dedicated Freight Corridors, Jal Marg Vikas, Sagarmala Project, Bharatmala Project, Mass
Rapid Transit System (MRTS), Green Highways (Plantation & Maintenance), National Electric Mobility Mission Plan 2020, Vehicle Fuel Efficiency Program, National Policy
on Biofuels, etc.
• Planned afforestation: Schemes include Green India Mission (GIM), National Agro-forestry Policy (NAP), REDD-Plus policy, Joint Forest Management, National
Afforestation Programme, etc.
• Abatement of pollution: Schemes include Continuous Emission Monitoring System (CEMS), Common Effluent Treatment Plants (CETPs), Fly Ash Utilisation Policy,
National Air Quality Index (AQI), Municipal Solid Waste Management (Management and Handling) Rules, etc.
• Citizens and private sector contribution in combating climate change: Schemes include Swachh Bharat Mission, Corporate Social Responsibility (CSR) through
Companies Act 2013, India GHG Programme for Indian Industries, Smart Power for Environmentally-sound Economic Development (SPEED), GreenCo Rating System,
New Ventures India (NVI), Small and medium-sized enterprises (SME) Cluster Programs for Energy Efficiency, etc.
Further, there are climate finance policies in place which include setting up of a USD 55.6-million National Adaptation Fund, subsidy reduction on fossil fuels (diesel,
kerosene and domestic LPG, etc.), significant increase in coal cess, introduction of Tax Free Infrastructure Bonds for funding of renewable energy projects, Finance
Commission (FC) incentive for creation of carbon sink, etc.

Annexure - II
II.1 Sustainable Development Goals (SDG) India Index by Figure II.1.1: Institutional Structure for SDGs at National and Sub-national Level
NITI Aayog and UN
LEVEL NODAL BODIES FOR INSTITUTIONALISING SDGS AT THE
NATIONAL AND SUB-NATIONAL
As the nodal institution for meeting the SDGs set in the 2030 agenda, the
NITI Aayog has been driving SDG localisation, collaborating with states /
UTs, instituting monitoring, reporting and reviewing systems, and engaging
with the civil society and the private sector by forging partnerships. NITI AAYOG: AT NATIONAL LEVEL
Designed and developed by NITI Aayog in 2018, the SDG India Index
measures the progress in the journey of meeting the global goals and
targets at a national and state level. The index covers all 17 goals, 70
Supporting States in
targets and 115 indicators. Mapping targets to Coordination with Coordination with State developing monitoring
central ministries
programmes and policies Planning Departments framework
Assigning data
Target setting Bi-annual review Facilitating partnership
responsibilities building
PLANNING DEPARTMENT: AT SUB-NATIONAL LEVEL
SDG Vision roadmap for Aligning budget

the state Coordination with line allocation with SDG Capacity building of
departments and districts
Mapping targets with priorities State and district-level
departments Forming thematic task officials
Coordination of periodic
groups
Target setting reviews
Source: SDG India – Index and Dashboard 2020-21,

CBRE India Research Q1 2022

Table II.1.1. Localisation of SDGs and Progress in Key States
SDG MAPPING OF DEPARTMENTS

STATE INSTITUTIONAL SDG VISION SDG MONITORING SYSTEM SDG BUDGETING ‘LEAVE NO ONE BEHIND’ INITIATIVES
& SCHEMES
Andhra Pradesh Nodal: Planning Department Coordinates SDG Vision Document revised; All department and development State Indicator Framework (SIF) Annual Outcome Budget to The “Navaratnalu” (cluster of nine flagship programmes)
Implementation at Stage level, facilitates the SDG Annual Status report schemes mapped. prepared; District Indicator Framework reflect SDGs. Implemented to reach out to vulnerable communities across
localisation process, and conducts SDG prepared. (DIF) under preparation. State sector, such as, agriculture, health, education, housing,
monitoring. Andhra Pradesh Stage Development Dashboard under preparation entrepreneurship development and social protection
Planning Society provides technical assistance
Delhi Nodal: Planning Department; Nine Working Vision 2030 under SDG SIF prepared. Budget aligned with SDGs. For evidence-based policy making, the Government of NCT
Groups constituted under the Chairmanship of finalization. Target-wise mapping of Schemes/ Scheme-wise mapping of conducted a situation analysis for various social groups through
Administrative Secretaries of line Departments. Departments SDGs linked with budget surveys and evaluation studies.
Overall review and monitoring of SDGs will be allocation.
done by the Steering Committee headed by the
Chief Secretary
Haryana Nodal: Swarna Jayanti Haryana Institute for Fiscal Vision document 2030 in SDG Target-wise mapping of State State level Monitoring system in place; SDG-wise budget An initiative for allocation of unique 'Family ID' to all families in
Management; State SDG Coordination Centre place. Departments and schemes SIF under approval; An online allocation prepared; order to identify vulnerable population groups and provide
functional. completed. integrated SDG M&E dashboard being "District Budget" Booklet prioritised support under finalisation. A 'District Vulnerability'
developed. prepared for the Index also proposed to be developed for identifying and
Aspirational District "Nuh" supporting vulnerable groups.
in alignment with SDGs.
Tamil Nadu Nodal: Planning & Development Department; A Vision 2030 under SDG Target-wise mapping of SIF, DIF and Block Indicator Framework Child & Gender Budget under finalization; Strategies discussed
High-Power Committee headed by the Chief finalization. Schemes/ Departments finalized. SDG Dashboard yet to be with various departments on addressing issues related to LNOB;
Secretary oversees SDG implementation; Eight completed. developed. Study commissioned for looking at the Status of readiness to
thematic Working Groups constituted; SDG Units 'Leave No One Behind'.
formed in every department; A High-Power
Committee, Executive Committee and SDG Cell
formed in every district.
Maharashtra Nodal: Planning Department; SDG- Vision 2030 In place. SDGs/Targets mapped on 1335 Monitoring strategies formulated; The MPSIMS links budget Gender & Child Budget 2020-21 published in collaboration with
Implementation & Coordination Centre (SDG-ICC) State-Level and 540 District Level SIF/DIF under finalization; Maharashtra outlay on schemes/ UNICEF; Financial support provided to women entrepreneurs
functional under the Directorate of Economics & Schemes & Programmes. Plan Information Management System programmes to through various schemes; Village Social Transformation
Statistics of Planning Department. (MPSIMS) web portal integrate State and SDGs/Targets. Foundation (VSTF) set up to promote PPP between the State
district level planning and monitoring Government, Corporate sectors and Philanthropic Organizations
data; Environment Adjusted Human to bridge development gaps In 1,000 villages; Guidelines for
Vulnerability Index (EAHVI) developed to State Annual Plan 2021-22 gives specific instructions to map
track progress in 27 most backward Schemes/Programmes for beneficiaries with Special Needs
Development Blocks. defined under the Disabilities Act, 2016.
Source: SDG India – Index and Dashboard 2020-21, CBRE Research Q1 2022

SDG MAPPING OF DEPARTMENTS

STATE INSTITUTIONAL SDG VISION SDG MONITORING SYSTEM SDG BUDGETING ‘LEAVE NO ONE BEHIND’ INITIATIVES
& SCHEMES
Maharashtra Nodal: Planning Department; SDG- Vision 2030 In place. SDGs/Targets mapped on 1335 Monitoring strategies formulated; The MPSIMS links budget Gender & Child Budget 2020-21 published in collaboration with
Implementation & Coordination Centre (SDG-ICC) State-Level and 540 District Level SIF/DIF under finalization; Maharashtra outlay on schemes/ UNICEF; Financial support provided to women entrepreneurs
functional under the Directorate of Economics & Schemes & Programmes. Plan Information Management System programmes to through various schemes; Village Social Transformation
Statistics of Planning Department. (MPSIMS) web portal integrate State and SDGs/Targets. Foundation (VSTF) set up to promote PPP between the State
district level planning and monitoring Government, Corporate sectors and Philanthropic Organizations
data; Environment Adjusted Human to bridge development gaps In 1,000 villages; Guidelines for
Vulnerability Index (EAHVI) developed to State Annual Plan 2021-22 gives specific instructions to map
track progress in 27 most backward Schemes/Programmes for beneficiaries with Special Needs
Development Blocks. defined under the Disabilities Act, 2016.
Karnataka Nodal: Department of Planning, Programme Nava Karnataka (New SDG Target-wise mapping of State SIF prepared; Comprehensive New Decision Support Livelihood opportunities being created for SC/STs, artisans, and
Monitoring and Statistics; SDG Coordination Karnataka) Vision 2025 in Departments, Agencies, Schemes/ development monitoring involving 1500 System (NDSS)-Avaloka-na: women through targeted skill development and market support.
Centre set up in partnership with UNDP provides place. Programmes completed. programmes/ schemes ensured the platform includes SDGs
technical support In SDG implementation; At Panchayat level upward through the and indicators mapped to
district level, every Department has a Nodal digital platform - Avalokana. Line Departments -with
Officer on SDGs. specified financial and
physical targets for each
scheme, as per the State
Budget.
Telangana Nodal: Planning Department; Centre for SDGs set Vision 2030 under SDG Target-wise mapping of SIF under finalization. DIF and Dashboard Budget allocations for There are schemes (Aasara Pensions) for pensions and financial
up at MCR HRD Institute; At the district level, Chief preparation. Schemes/ completed. yet to be developed. various development assistance for vulnerable social groups, such as, widows,
Planning Officer plays nodal function. schemes mapped to SDGs. disabled, HIV patients, toddy tappers, weavers, etc; housing for
poor; assistance for pregnant women and new-borns (KCR Kit
scheme), schemes for empowerment of women (e.g. Kalyana
Lakshmi, Shadi Mubarak, etc.); Food grains for poor households;
Educational support in terms of residential schools and colleges,
study abroad scheme for minorities, etc.; skill development and
income generation programmes for the poor; Farmers' support
schemes, such as Ryuthu Bandhu (Investment support), Rythu
Bima (life insurance), etc.
Uttar Pradesh Nodal: Planning Department; State SDG Cell Vision 2030 In place. SDG Target- and Indicator-wise SIF & DIF prepared; SDG Dashboard Special initiatives for vulnerable groups Include: educational
constituted; SDG Task Force constituted under mapping of Schemes/ developed In partnership with UNICEF. Incentive programme for child labour (Bal Shramik Vidya
the chairmanship of the Chief Secretary; Nodal Departments completed. Yojana); Financial transfer to girl children for education and
Officer for each Goal nominated; Goal-wise empowerment (Kanya Sumangala Yojana); Housing scheme for
Working Group constituted; Task Force formed at poor people under Mukhyamantrl Awas Yojana, etc.
district/division level.
Source: SDG India – Index and Dashboard 2020-21, CBRE Research Q1 2022

Annexure - III
SEBI’s Business Responsibility and Sustainability Reporting Standards
Overview • Leadership indicators:

In 2021, SEBI adopted Business Responsibility and Sustainability Reporting against the backdrop of ESG.
This is an update on the previously used Annual Business Responsibility Reports (ABRR) which was a part – Energy consumption break-up into renewable & nonrenewable sources
of the disclosure requirements of the ‘National Voluntary Guidelines on Social, Environmental and Economic – Water discharge
Responsibilities of Business’ (NVGs). Initially, SEBI had mandated the top 100 listed companies by market
capitalisation to file BRR as part of their annual report, which was progressively extended to the top 500 – Water withdrawal and water consumption in areas of water stress
listed entities by market capitalisation in 2015 and subsequently to the top 1000 listed entities in 2019.
– Scope 3 GHG emissions
In order to align with global developments, like the UN Sustainable Development Goals (SDGs), United
Nations Guiding Principles on Business and Human Rights (UNGPs), and Paris Agreement on Climate – Reclaimed products
Change, the NVGs were reviewed and published as the National Guidelines on Responsible Business
– Use of innovative technology
Conduct (NGRBCs) in March 2019.
– Impact on biodiversity
Brief 3. Social indicators:
The BRSR emphasize on quantifiable metrics, allowing for comparison across companies and time period.
The disclosure on climate and social issues for an entity are significantly improved and made more detailed • Employees / workers centric: Details on gender, social diversity including measures for differently abled
as compared to previous version. Few of the key disclosures sought for ESG in BRSR includes: employees and workers, turnover rates, median wages, welfare benefits to permanent and contractual
employees / workers, occupational health and safety, trainings etc.
1. Highlight material responsible business conduct issues that are risks or opportunities to the business
and approach to mitigate the same along with financial implications. • Community related: disclosures on Social Impact Assessments (SIA), Rehabilitation and Resettlement,
Corporate Social Responsibility etc.
2. Environment related disclosures:
• Consumer related: Details on product labelling, product recall, consumer complaints in respect of data
• Essential indicators: privacy, cyber security etc.
– Resource usage: Energy consumption & energy intensity, water withdrawal and consumption 4. Governance related disclosures:
volume
• Role of the Board in sustainability: Statement from the director responsible for the report, to highlight
– Air emissions: Scope 1 and Scope 2 GHG emissions sustainability related challenges, targets and performance.
– Waste management: Quantum of plastic waste, e-waste, bio-medical waste, construction and • Conduct related: Details on fines and penalties, along-with any action taken by regulatory authorities on any
demolition waste, battery waste, radioactive waste, other hazardous and nonhazardous waste of the principles.
generated, re-used and recycled along-with waste management practices

Annexure - IV
CERTIFICATIONS
IV.1. Environment (E) There are various rating systems available at global level to assess the environmental performance of real estate
assets. A few of the prominent certifications have been listed below.
Environmental considerations were once seen as tangential pieces of the economic equation, but issues
such as climate risk, water scarcity, extreme temperatures and carbon emissions are now threatening
to dampen economic growth. The state of the environment can directly affect a company’s competitive Building Research Excellence in Design
Indian Green US Green Establishment Environmental
positioning. Environmental indicators majorly cover contribution of a firm / government towards climate for Greater Efficiencies
Building Council Building Council Assessment Method (EDGE)
change via CO2 emissions, waste production, energy consumption etc. and how stakeholders are (BREEAM)
attempting to combat these issues by incorporating various strategies such as decarbonizing, effective
waste management, obtaining energy efficiency process etc. Comprehensive Assessment
System for Build Energy BCA Green Green Star RESET Standard
Environment Efficiency Mark Scheme
(CASBEEE)
Real Estate Environment Factors
ENERGY WASTE INDOOR ENVIRONMENT

CONSUMPTION MANAGEMENT QUALITY In India, two prevalent certifications are the Indian Green Building Council Certification and US Green Building
Council Certification, also known as LEEDS certification.
GREENHOUSE BIODIVERSITY AND POLLUTION
GAS EMISSIONS HABITAT PROTECTION PREVENTION
IGBC
MATERIAL CLIMATE CHANGE The Indian Green Building Council (IGBC), a part of the Confederation of Indian Industry (CII), was formed in the
SOURCING ADOPTION year 2001. The council has different norms for all types of assets, ranging from residential projects, townships, data
centers and logistics parks to railway stations, and schools. As of April 2021, IGBC had certified a total of 7.77 billion
RENEWABLE WATER CONSUMPTION/ sq. ft. real estate footprint, with about 6,400 projects registered2.
ENERGY USE CONSERVATION
LEEDS
US LEEDS certification started its pivot testing in 1998 and has grown since then, with the latest LEEDS v4.1 being
launched in 2019. This is more inclusive benchmark with updated referenced standards and allows projects to earn
According to UNEP FI – Global ESG Real Estate Investment Survey Results 2019, 68% respondents have
LEEDS points through building performance monitoring. It also continues to drive performance, fully integrating
started considering GHG emission management of potential acquisitions and 91% respondents are using
performance outcomes supported by new methodologies and a simple data-driven path to measure performance
sustainability disclosure frameworks1. This shows the readiness of real estate stakeholders to create
on an ongoing basis. Several US states have now made sustainable, healthy buildings a priority, certifying over 0.4
better environment-friendly processes for developing assets and facilities. This trend is expected to gain
billion sq. ft. of space to LEED standards3.
prominence in the near future.
1
UNEP FI – Global ESG Real Estate Investment Survey Results | 2019
2
IGBC | 2021
3
LEEDS | 2020

IV.2 Social (S)

The 'S' of ESG is an assessment of how a company manages its relationship with its labour force, the
CERTIFICATIONS
society in which it operates, and the political environment. A firm’s short to long term growth and
performance is affected by these social factors. For instance, if employees on strikes can create a dearth
There is no extensive rating system which specifically covers social factors of a firm. However, two rating systems
of skilled labour, it can also damage the company’s reputation in the society. Hence, employee satisfaction
can be used as they cover a few of the above social factors:
is an important factor in a company’s performance.
WELL
Real Estate Social Factors WELL is a building certification program which was created in 2014 by Delos and International WELL Building
Institute (IWBI). It is currently being managed by the IWBI. It emphasises on assessing building design from the
COMMUNITY HUMAN RIGHT CHILD LABOR lens of occupant health and well-being. The evaluation of a building is based on 11 points of assessment – air, water,
DEVELOPMENT PROTOCOL POLICY nourishment, light, movement, thermal comfort, sound, materials, mind, community, and innovation. In February 2021,
WELL-certified projects have crossed the 1.5-billion sq. ft. mark across more than 80 countries5.
EMPLOYEE INCLUSION AND HEALTH AND SAFETY OF
ENGAGEMENT DIVERSITY COMMUNITY, CONTRACTORS, FitWel
AND EMPLOYEES Fitwel was created in 2017 in collaboration between The Center for Disease Control, the US General Services
EMPLOYEE HEALTH LABOR STANDARDS AND Administration and the Center for Active Design. FitWel emphases on location, building access, outdoor spaces,
& WELL-BEING WORKING CONDITIONS entrances, stairs, indoor environment, workspaces, shared spaces, water supply, cafeterias and prepared food areas,
vending machines and snack bars, and emergency procedures. The rating system is both managed and reviewed by
FREEDOM OF STAKEHOLDER the Center for Active Design, a non-profit organization based in New York City. Being relatively new, in 2020, FitWel
ASSOCIATION RELATIONS had rated over 0.1 billion sq. ft. of assets across the globe6.
The impact of COVID-19 has affected the communities interact and behave, leading stakeholders to take a
relook at the transport, technology, and health infrastructure available to them. According to a McKinsey
survey, ‘The ESG Premium: New perspectives on value and perspectives’ published in 2020, 93% of total
respondents feel that social programs make a positive long-term contribution. In comparison, only 77%
respondents had stated that social programs were important for their growth in the company’s 2009
survey4.
4
The ESG premium: New perspectives on value and performance | 2020
5
WELL | 2021
6
FitWel | 2020

IV.3 Governance (G)

Governance factors include decision-making, spanning from policymaking by a company’s stakeholders
CERTIFICATIONS
to the distribution of rights and responsibilities among different levels in corporations, with includes
the board of directors, managers, shareholders, and stakeholders. In ESG, the ‘G’ factor is still not very
There is no specific rating system available which specializes in quantifying and ranking firms on ‘G’ factor. However,
prominently taken into consideration. However, understanding governance risks and opportunities in
there are three important disclosure frameworks which are being used by firms / organizations across the globe
decision-making is critical, as poor corporate governance practices have stood at the core of some of the
that quantify and rate ‘G’ factor along with the other factors of ESG. UN PRI and GRESB standards have already
biggest corporate misdemeanours. been covered in the earlier part of the report. Enlisted below is another important standard that is widely accepted
worlwide:
Real Estate Governance Factors

GRI
BRIBERY AND EXECUTIVE POLITICAL GRI stands for ‘Global Reporting Initiative’ which was formed in 1997 in Boston, which has gone over many revisions.
CORRUPTION COMPENSATION CONTRIBUTIONS In 2016, GRI transitioned from defining guidelines to setting the first global standards for sustainability reporting
– the GRI Standards. The GRI Standards aim to make firms / organizations understand and report their impact on
CYBERSECURITY FIDUCIARY AUDIT SHAREHOLDER the economy, environment, and people in a comparable and credible way, which helps increase the transparency on
RIGHTS their contribution to sustainable development. According to KPMG’s Survey of Sustainability Reporting 2020, GRI
DATA PROTECTION FRAUD remains the most widely followed and used reporting standards. In a sample of 5,200 top firms from globe, 67% of
AND PRIVACY respondents reported to using GRI as their sustainability reporting guideline8.
With an aim to mitigate risks, a majority firms across the globe have started giving the ‘G’ factor of ESG
equal importance to improve their ESG ratings. According to the latest UNEP FI – Global ESG Real Estate
Investment Survey Results 2019, 85% of respondents are highly or very highly motivated to incorporate
the ESG principles due to reduced risk. The survey further showed that 80% of Asia-Pacific respondents
were highly motivated to use ESG principles in their functioning7.
7
UNEP FI – Global ESG Real Estate Investment Survey Results | 2019
8
KPMG Survey of Sustainability Reporting | 2020

Contacts
Research Business Line Global Research Follow Us

Abhinav Joshi Gurjot Bhatia Richard Barkham, Ph.D., MRICS
Head of Research - India, Middle Managing Director - Project Management Global Chief Economist & Head of Research
East & North Africa Gurjot.bhatia@cbre.co.in richard.barkham@cbre.com
Abhinav.joshi@cbre.co.in
Rajesh Pandit Henry Chin
Vidhi Dheri Managing Director - Global Workplace Solutions Global Head of Investor Thought Leadership &
Senior Associate Director & Property Management Head of Research, APAC
Vidhi.dheri@cbre.co.in Rajesh.pandit@cbre.co.in henry.chin@cbre.com.hk
Vineet Sharma Rami Kaushal Neil Blake, Ph.D.

Deputy General Manager Managing Director - Consulting & Valuation Head of Forecasting & Analytics, Global
Vineet.sharma1@cbre.com Rami.kaushal@cbre.co.in neil.blake@cbre.com
Tauseef Ahmad Spencer Levy

Assistant Manager Chairman & Senior Economic Advisor,
Tauseef.ahmad@cbre.com Americas Research
spencer.levy@cbre.com
Abhay Bembey
Senior Research Analyst
Abhay.bembey@cbre.com
CBRE Research
This report was prepared by the CBRE India Research Team, which forms part of CBRE Research—a network of preeminent researchers who collaborate to provide real estate market research and econometric forecasting to real estate.
All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be
reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, com-
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Indian Real Estate's

ESG Landscape and

3 CBRE RESEARCH ©2022 CBRE, INC.

4 CBRE RESEARCH ©2022 CBRE, INC.

1.1 Defining ESG

Figure 1.1.1: Major elements of an ESG strategy

Environment (E) Social (S) Governance (G)

6 CBRE RESEARCH ©2022 CBRE, INC.

1.2 Figure 1.2.1: Global Climate Risk Index Rankings (2000-2019)*

Global Climate Risk Index: Ranking 2000 - 2019

7 CBRE RESEARCH ©2022 CBRE, INC.

Figure 1.2.2: Scope 1, 2 and 3 carbon emissions*

REPORTING COMPANY DOWNSTREAM ACTIVITIES

8 CBRE RESEARCH ©2022 CBRE, INC.

9 CBRE RESEARCH ©2022 CBRE, INC.

1.3 Why should real estate players adopt ESG?

1.3.1 1.3.2 1.3.3 1.3.4 1.3.5

3. Is sustainability certification in Real Estate worth it? | 2021

10 CBRE RESEARCH ©2022 CBRE, INC.

Why the focus on

2.1 Paris Agreement and India’s aim for 2030

Action plan to achieve the goals

12 CBRE RESEARCH ©2022 CBRE, INC.

13 CBRE RESEARCH ©2022 CBRE, INC.

2.2 UN Sustainable Development Goals can help define

Figure 2.2.1: Sustainable Development Goals

NO POVERTY ZERO HUNGER GOOD HEALTH QUALITY GENDER CLEAN WATER

AFFORDABLE AND DECENT WORK INDUSTRY, REDUCED SUSTAINABLE RESPONSIBLE

CLIMATE LIFE BELOW LIFE ON PEACE, JUSTICE PARTNERSHIP

Source: UNDP; CBRE India Research, Q1 2022

14 CBRE RESEARCH ©2022 CBRE, INC.

6: Clean Water and Sanitation 100

17: Partnership for the Goals

15 CBRE RESEARCH ©2022 CBRE, INC.

In million sq. ft.

Certified Stock Non-Certified Stock

Source: CBRE India Research, Q1 2022

17 CBRE RESEARCH ©2022 CBRE, INC.

30% 24% 19%

18 CBRE RESEARCH ©2022 CBRE, INC.

3.2 NCR and Hyderabad lead in terms of certified

Source: CBRE India Research, Q1 2022

19 CBRE RESEARCH ©2022 CBRE, INC.

3.3 Certified green projects command rental

20 CBRE RESEARCH ©2022 CBRE, INC.

3.4 LEED certification dominates

Our analysis also showed

21 CBRE RESEARCH ©2022 CBRE, INC.

Figure 3.4.2: City-wise LEED and IGBC certified stock

Million sq. ft.

Certified Gold Platinum Silver Certified Gold Platinum

22 CBRE RESEARCH ©2022 CBRE, INC.

3.5 Certified green stock majorly

Figure 3.5.1: Concentration of Certified Stock by Business District

Core Secondary Business Districts Peripheral locations

Source: CBRE India Research, Q1 2022

23 CBRE RESEARCH ©2022 CBRE, INC.

3.6 Institutional investors ahead of

0% 20% 40% 60%

24 CBRE RESEARCH ©2022 CBRE, INC.