India's Net-Zero Push: How green construction is shaping the future of real estate

Green construction is no longer a lifestyle preference but an economic and environmental imperative, according to a joint report by KPMG in India and NAREDCO titled “The Role of Real Estate in Viksit Bharat @2047.” The report underscores that as India accelerates toward its long-term climate and development goals, the real estate sector will play a decisive role in shaping sustainable outcomes.

India’s climate commitment: Buildings in focus

India has committed to achieving net-zero emissions by 2070 and reducing carbon intensity by 45 per cent by 2030. The building sector serves as a vital mechanism for environmental protection as it accounts for a major part of global emissions.

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According to the report, India produced almost 8 per cent of worldwide CO₂ emissions during the year 2023. In 2024, the country emitted about 3.0 gigatonnes, while China emitted approximately 12.6 gigatons, and the United States emitted 4.5 gigatonnes.

The report reveals that present decisions regarding the design and operation of homes, offices and cities will establish long-term energy consumption patterns which will lead to emissions that persist for decades. The construction of environmentally friendly buildings represents an essential strategy for reducing climate change impacts.

Green construction: Markets and trends

Strong growth in green materials

India’s green building materials market is expanding at a 10–12 per cent CAGR, with projections estimating a market size of Rs 6.2 to 7 trillion by 2030. The growth is driven by a shift toward lower-emission and resource-efficient inputs.

Office market turning green

The Grade-A office segment has rapidly transitioned toward sustainability:

• In 2019, India’s top seven cities had 322 million sq ft of green-certified office stock.
• By H1 2025, 530 million sq ft out of 865 million sq ft (61 per cent) of total stock across the top seven cities is green-certified.
• Certifications such as LEED, IGBC, and GRIHA are increasingly becoming industry standards rather than differentiators.

Residential sector adopts green features

The report highlighted that sustainability features are now mainstream in housing projects, including:

• Solar rooftops
• Rainwater harvesting and water recycling
• Passive cooling systems
• Energy monitoring applications
• Smart-home integration

India’s smart homes market is projected to grow at 9.14 per cent annually between 2024 and 2028, reaching Rs 802 billion by 2028, reflecting growing consumer demand for tech-enabled efficiency.

Policy push making green mandatory

India has layered regulatory frameworks and policy initiatives to promote sustainable construction. Key measures include:

• Energy Conservation Building Code (ECBC): Sets minimum energy standards for commercial buildings.
• Eco-Niwas Samhita (ENS): Establishes sustainability benchmarks for residential buildings.
• National Building Code (NBC): Incorporates green standards into core building regulations.
• Energy Conservation Amendment Act (ECAA) 2023: Provides legal backing for carbon trading and green incentives.
• India Cooling Action Plan (2019): Promotes sustainable cooling solutions.
• Smart Cities Mission (2015): Upgrades urban infrastructure and governance, indirectly enabling sustainable real estate outcomes.

The report notes that these measures are increasingly becoming mandatory in new construction and retrofits, signalling a regulatory shift toward sustainability.

The cost–benefit equation

While green buildings often entail higher upfront costs, the long-term financial benefits are substantial:

• Lower energy and water bills
• Reduced maintenance costs
• Higher occupancy rates
• Premium rental yields

Homeowners benefit from green features, which increase their property value. The combination of better air quality, lighting and thermal comfort improvements results in higher workplace efficiency and lower operational expenses.

Neeraj Bansal, Partner and Head–India Global at KPMG in India, said, "Green building standards and energy efficiency codes are becoming essential to avoid-locking in long term operating inefficiency and emissions, especially as the next two decades would define outcomes for generations."

Parveen Jain, President of NAREDCO, added, "...green building is moving from preference to necessity as the choices, we would make today shape resilience and environmental outcomes for decades."