In my 2017 blog, I had mentioned a memory of a conference in 2011 in which I stated from dais that “What is not Green is not affordable”. I realise, it was too early to state. 13 years down now, we are all becoming aware and I am sure in next 5 years this will become way to go for real estate industry as well. Reason being –
- a. Not green? Higher difficulties in securing funds.
- b. Not green? No access to green funds that are growing exponentially, globally.
- c. Not green? Difficult to market products globally.
- d. Not Green? Loose on brand value.
As it was quality management
systems (QMS like ISO etc.) in around 2000, ESG Complaint is latest buzz word and
barometer of organization, product and culture. It is not only Green building
Certification, it is ESG – Environment, Social, and Governance that is being looked for. Although Triple Bottom Line parameter is in the audits since long
but, the importance has geared up in last few years. At least for global
business, it is very much essential.
Impact of the change
Urban infrastructure is one of
the top three polluting segment with Power and Automobile. However I believe it
is MOST difficult segment to bring in change because of three major reasons –
2. Direct impact on informal sector involved in the segment
3. Processes are in situ and not in a manufacturing area
The government will, general
awareness in the customer and cost management are all needed.
Balancing the Capex and Opex
Due to significant risk in the
business, capital heavy character of a project and, proportionate large profit
margins make the ESG drive sensitive to Capex – Opex analysis. Although Defect
Liability Period is increasing cost to developer, ultimately opex will burden
end user. Hence, though early, I believe Maintenance Cost will become a project
advantage/ disadvantage for marketing people.
The governance plays an important
role post acquisition for the end user. It is not one person but, the whole
group of end users who are responsible for actions needed for positively using
the systems installed. This makes it more complicated for the architects and
EPC team to design systems that are not only easy to adept but also financially
benefitting.
Consumption and Disposals are
primary issues to control in post occupancy phase. Not to forget – it is only
25 -30 years cycle for construction and demolition in a growing city. At best
40 years. Hence, when we talk about Circularity, we should care for Circularity
of economy in the life cycle of a project.
This presents three point focus
to be taken care of –
- Creation including embodied and Stored Carbon
- Design to support governance for Carbon reduction during use and,
- Saving from Carbon at the time of demolition OR, recycle
Areas of Impact during project acquisition, design, construction, use and
demolition (for redevelopment) –
1. Processes to acquire the project
2 Demolition or, cleaning up site for construction
3. Architecture
4. Engineering
5. Landscape and horticulture design
6. Contract management
7. Process of handing over possession
8. Governance implementation during possession period and defect liability period
9. Systems integration in governance
10. Behavioural adaptation in end users
Future Readiness
May be I am writing this little
early but, having experience of ISO system writing, implementation and auditing
I feel it’s too late for unorganized segment of Real Estate and, time for
organized segment of Real Estate to get in the groove.
It all begins with defining standard
procedures on which an organization works. I am not sure how many organizations
have documented standard procedures. This is actually most important to create
a sustainable change. Implementation is next.
360 degree implementation is next
tricky action. Bringing your suppliers, contractors and Project
Management team in the gambit of the system is surely tricky. One has to be Future Ready.
One will not be able to carry out all of this once a financially crucial
project is about to begin. We certainly are facing scarcity for team of architects,
engineers, suppliers and contractors that are ready for all the processes,
products and mind-set.
Let us not forget Project
Management Systems that too needs a makeover for saving all the carbon generation
during the processes. One of the major risk to ESG begins with Communication Processes that have loads of data management. We need to seriously work on doing away with redundant data
management. Contract Management and Design management are next challenges. In a
nutshell, being ESG compliant requires adjustments in most of the functional
areas. It can be done, it has to be done and with coming funding and business conditions, it
will be done. The question is, how many are ready.
One
statement is very true – What is not Green, is not Affordable.
