The following sample essay on “Study on Environmental Sustainability “: is a depth study on environmental sustainability through green business practices in real estate.
Ranging from commercialized businesses, governments, and other regulatory bodies to citizens all over the world have shown concerns about the challenges of global warming. This has led companies to revise their business activities as well as the concept of green business has grown over some time. Green business, also alternatively known as environmental business along with sustainable business, prefer an organization’s efforts at designing, promoting, pricing, and distributing products that will not harm the environment.
The Real-Estate industry in India is the second-largest fast-growing industry after agriculture with the continuing& future projects and advancement of malls, high-rise residential buildings, family resorts, and commercialized businesses. This is creating investment and employment opportunities across various related sectors and there are several areas of concern with its rapid growth. A lot of organizations within the industry are supporting green-building by publishing educational materials, establishing guidelines and resources, creating training programs, and hosting green-building conferences/seminars, creating a new level of awareness.
This theoretical paper aims to highlight the unique aspects of environmental sustainability through green business practices in the Real-Estate sector.
The Real-Estate sector worldwide should adopt more ecological forms, especially given the detrimental effect that some of their practices tend to have on the land, nature, and health of people. At each step of economic development, countries must make decisions between conflicting objectives. To improve the lives of its citizens, nations are determined by the goals of economic growth and cheap energy for all.
Alternative, as well as reasonable sources of energy, are significant to making domestic companies aggressive and contribute greatly to financial development, job creation, and improvement. This frequently causes damage and environmental degradation.
Ensuring energy access to the public and improving the competitiveness of small businesses may require providing energy at lower costs through energy allocations. This encourages excessive use of energy, waste, and inefficiency, and also fuels environmental pollution. Subsequently, it leads to an inevitable effect on the earth causing health problems, and an increase in the number of deaths and disabilities among a maximum number of individuals constantly. While developing countries have assets and progress to combat the effect of pollution on land, sustainability is even less expected. In circumstances like this, pensive Real-Estate agents possibly become the most important factor.
Today, as never before, we are becoming aware of the estimation of the space in which we live and the need to keep it. This can be communicated through different angles: environmental, monetary, social &cultural. Recently, the World Economic Forum has chosen to build a typical arrangement of natural standards in partnership with the Real-Estate business. The objective of this exercise was to ensure that the leadership and basic activities of Real-Estate companies emphasize environmentally sustainable.
1) To study the unique aspects of green business practices in the Real-Estate sector in India.
2) To study the business case for sustainability in commercialized real-Estate.
3) To study how to choose smarter technology for environment friendly.
4) To study Ongoing challenges & barriers for green-buildings
5) To suggest some practical solutions for coping with these challenges successfully.
To fulfill such objectives secondary data is used. The purpose of the study is restricted to understanding the green business practices in the Real-Estate sector in India. The secondary data was collected through books, periodicals, journal published material, the internet, and various online site that provide the related Real-Estate industry for the study.
· Incorporate adherence to the best management standards of the class in all parts of their Real-Estate projects, with the obligation at the level of the board of directors to observe and disclose their compatibility execution.
· Ensure that your options match the improvements in ecological Mgmt. capacity at the neighborhood and urban levels.
· Commit to a continuous change in the ecological execution of the debt.& the progress exercises, terrestrial activities, and strategies of administration of benefits.
· Track the ecological execution of their land resources and activities on a non-stop premise, to survey their biological impression, and their exposure to risk from natural shocks, natural control along with the monetary effects of the environmental revolution.
· Identify the answers to improve their performance of natural compatibility, incorporating, in particular, their sense of duty concerning the emissions of substances harmful to ozone and expanding their use of renewable resources.
Modern studies find proof of lower default risk in commercialisedloans for buildings with sustainable labels, and better loan terms or conditions (lower interest rates as well as interest periods only significantly longer), compared to non-ecological buildings. Viz. a study shows that CMBS office loans can have a more than 30% reduction in default risk after the collateral property becomes labeled Energy Star or certified LEED (after controlling for other factors that affect the risk of non-compliance, like the trademark for loan ratio at market value, debt service coverage ratio, etc.).
· Another study focuses especially on the effects of energy consumption at the building level and the price of energy on the predetermined risk of securitized commercialized loan (including office, retail, and mixed-use properties). The research discovers that the features of construction assets and operating practices that affect the force of the use of property energy have key effects on the probability of default, advising that accounting for energy efficiency and risk of prices will be a significant part of the loan risk assessment process in the new originations of loans.
· Although the form of research on the performance of sustainable assets is growing, the market still lacks transparency and a solid proof base, which would help market players to progress capital distribution strategies. The regulators are also progressively seeking reliable data, which would justify providing capital relief for energy efficiency loans.
· In response to improved policy and market motion, European banks are discovering a concept of “green labeling,” a well-organized process in which banks spot the environmental attributes of their loans and the underlying asset guarantee. The eco-logical labeling of bank-assets is expected to help expand sustainable financing and contribute to the new energy development efficiency business strategies by providing better tracking of green loan performance and sanctioning easier access to the ecology of the bond market. The United Nations research on the environment in the sustainable financial system design and a climate strategy and partners has currently published an exciting joint study on the practices of ten leading European banks in the labeling of energy efficiency financing in Real-Estate
In addition to a noun, green building is also a verb, that is, the practice of using processes &technologies that respect the environment and energy efficiency throughout the life cycle of the building, from the location to the design, construction, operation, maintenance, renovation, and deconstruction.
Green-building practices can improve the ecology of the environment in many ways. They can reduce energy consumption by 20-30% and the use of water by 30-50%, and significantly reduce the generation of waste through extensive recycling. In addition to the obvious protection of the ecosystem and biodiversity, the use of green-building practices leads to:
· Better air quality.
· Improved natural light, which leads to lower electricity consumption.
· Superior health and general well-being.
· Improvement of productivity.
In different countries, several programs and agencies define, categorize, and certify green buildings, such as LEED (USA), BREEAM (United Kingdom), DGNB (Germany), and CASBEF (Japan). In India, IGBC and GRIHA are at the forefront of the promotion of green-building programs and certifications. The certifications are made in various parameters such as:
· Water conservation and efficiency.
· Energy efficiency.
· The types of materials and resources of construction.
· quality of the interior environment, health, and comfort.
· Innovation and development.
· Management of facilities and sites.
Although in an incipient stage, India has become one of the leading countries in terms of green-building projects. India ranks second after the U.S. In terms of No. of green-technology projects and construction areas. More than 4,300 projects with approximately 4.7 billion square feet of constructed area are registered for green technology in the country.
However, this is only about 5% of the total buildings in India, indicating that there lies a tremendous potential for further penetration of green-building technology in India. Growing at an exponential rate, the Indian green buildings market is normally to double and may reach close to 10 billion sq. ft. by 2022 (at a valuation of $35-$50 billion).
While the use of green building practices is increasing in India, there are also some challenges and barriers. In recent years, the slowdown in the Real-Estate sector in India has led to a huge accumulation of unsold inventories. In addition, the impact of recent reforms amid moderate demand has further damped market sentiment, and most developers are struggling to unload the remaining inventory. The current market conditions have made developers skeptical about the use of any type of technology that increases the cost of construction. Apart from this short-term market situation, some of the other challenges to the implementation of green building practices in India are:
· Lack Of Awareness About Ecological Construction Practices And Their Long-Term Benefits: A large part of Indian users are still unaware of the concepts of ecological construction and its lasting benefits. Most users perceive that green building practices are expensive and not financially feasible.
· Inadequate Government Rules, Regulations, And Policies: There are not enough stringent and mandatory laws to enforce large-scale implementation of green-building standards.
· Lack Of Qualified Resource Experts And Subject Matter: Most industry stakeholders, such as policymakers, architects, engineers, contractors, and workers, do not possess the skills and knowledge necessary for the construction of ecological buildings.
· Incentives And Inefficient Subsidies For Developers: There are very few incentive plans and those that exist vary according to the states or even the cities, according to the governing bodies. While in most cases, the incentives are in the form of additional FAR / FSI, followed by a reduction in the property tax and other schemes. However, these incentives have not been significant enough to encourage developers and homebuyers.
· Higher Cost Of Equipment And Products: Equipment and products used in the construction of green buildings cost more than conventional ones, so small contractors and developers cannot afford them.
· Approvals And Authorizations: Developers already face a tedious process of approvals, and there is a fear that further addition of compliance related to green buildings may cause additional delays.
Low energy consumption devices (counting household hardware and kitchen appliances, among others) and lighting (especially LED lighting) reduce emissions much more, as does the expansion of solar-oriented photovoltaic advances. The construction of countertops and coatings.
Companies should aim to:
· Reduce the negative environmental impacts of design and development, and improve local regions.
· Minimize the energy and water consumption of the properties they develop.
· Improvise the sustainable use of resources in more than one way.
· Decrease in the intensity of hazardous materials in the property and commercialized spaces.
· Instead, recycled materials are used and a greater recycling capacity is adopted.
· Extension of the durability and functionality of the properties.
It is important to understand that the global financial powers will face the natural effect of the division of the land considerably more shortly. According to most projections, around the year 2030, the population of the world will exceed 8bn (billion), and more than 60 percent (4.9bn people) will live in urban areas. This will cause a great development in the areas of construction as well as real estate, and sustainability should be an integral consideration in this development.
The status of sustainability in commercialized real-Estate as a driver of growth is now recognized by market participants, in terms of capital and debt on both side.
Previously this year, ING published a survey which found that in the Americas, sustainability strategies have gone from being a cost reduction or style of brand reputation to being a true revenue driver. This is also true for commercialized Real-Estate. The significance of sustainability in commercialized Real-Estate, like a driver of growth, is now recognized by market participants, in terms of capital and debt on both side. It is no longer limited to simply “doing the right thing”, market participants’ decisions to go green are based on a positive impact on revenue, reduced operating costs, and reduced capitalization rates, all of which leads to higher property values.
Properties of Brookfield, the owner, operator as well as developer of office and multi-family assets, tenant survey repeatedly results in reports show the tenant’s great interest in decreasing the price of energy used along with the waste generated in their buildings. As of 2016, at least 80% of survey respondents from Brookfield indicated that sustainable building practices were important to them. It is not surprising that Brookfield Properties has put sustainability at the center of its business strategy. 90% of the firm’s globally eligible office area has achieved a sustainability designation.
USAA Real-Estate Company is a different player in the market that has integrated sustainable growth &financial performance. The main focus of the company is to increase efficiency and reduce environmental impact by maintaining a sharp focus on the comfort and satisfaction of tenants while improving financial performance. In 2016, the company informed annual savings in total operating costs of sustainable growth of $ 1.5m, including $ 0.6m in savings in energy costs. The aggregate energy savings of USAA Real-Estate since 2000 have reached $ 24.5m. The company’s analysis of results on performance shows that audits related to LEED and the implementation of recommendations show a 59% return on investment (ROI) and a simple refund in less than 2 years.
Although the initial costs of a green-building can be higher (up to 15%, depending on various factors) than for conventional buildings, the long-term benefits, such as low operating costs, the potential fitness & health benefits of the occupants, and the protection of the environment, make Such green-buildings are very viable options. Some of the key factors that are likely to drive the demand for green buildings are:
· Improve affordability.
· Environmental benefits.
· Increase awareness.
· Resources: countries with more population and limited resources will tend to adopt green-building practices more quickly.
· Govt. support, subsidies, and compulsions.
The green buildings aim to build a sustainable environment through the competent use of energy and the conservation of natural resources. The efficiency of an eco-friendly building can be maximized through the use of advanced or innovative building materials and state-of-the-art technology. While there are various technologies used in different countries, some of the most notable are:
The relentless ruin of the environment, together with the rapid diminution of resources, the rise in pollution, and climate change, have significantly damaged human being life. The deterioration of fitness or health conditions and habitability coefficients are alarming for current and forthcoming generations. This circumstance requires greater attention along with withgreater participation of countries all over the world to take measures to curb environmental degradation. The construction sector, which is one of the largest consumers of resources and emits a large number of pollutants and wastes, can play a vital role in building a sustainable-environment by raising the use of green technologies. In India, the growth of green-buildings can be accelerated by standardizing standards, better incentive schemes, one-stop permits, a strong financial support system and, most importantly, increasing awareness amongst all stakeholders. A greater responsiveness or awareness of green-buildings and their long-term benefits can create a much greater market potential, and when all is said and done, green-buildings are the foundation of any substantial sustainable life mantra. The momentum behind sustainable investments is undoubtedly growing. In the commercialisedReal-Estate space, both debt-equity market actors are increasingly focusing on the importance of the environmentally friendly attributes of their assets. The systematic approach to identify and monitor the financial and operational performance of sustainable investments will helpful in raise market transparency and improve the efficiency of capital allocation.