India’s real estate sector is increasingly positioning sustainability as a business priority, but a widening gap between rapid urban expansion and climate preparedness is raising questions over whether the industry’s green ambitions can translate into resilient, future-ready cities.

The debate has gained urgency after the UN-Habitat World Cities Report 2026 warned that climate-related hazards could damage or destroy 167 million homes globally by 2040. The report argues that future housing must move beyond conventional construction to prioritise climate resilience, integrated urban planning and resource-efficient development, while identifying India among the countries where emissions from the buildings sector have increased significantly since 2015, according to a report by Business World.

Climate Risk Takes Centre Stage
The UN-Habitat report estimates that housing contributes 17–21 per cent of global greenhouse gas emissions, underscoring why future residential development must prioritise climate resilience, efficient resource use and stronger integration with urban infrastructure.

Rohit Mohan, Chief Design and Sustainability Officer at Godrej Properties, said sustainability is no longer a parallel workstream but has become central to how land is selected, communities are designed and long-term value is created. “Climate-related risks – extreme heat, flooding and water stress – are no longer distant projections,” he said.

“They are present variables that responsible developers must account for at every stage, from site evaluation and design to construction and operations,” Mohan said, adding that resilience must be embedded into projects from the planning stage rather than treated as an afterthought.

Low-Carbon Construction Gains Ground
The report states that buildings account for 37 per cent of global greenhouse gas emissions, reinforcing the need to reduce emissions across the building lifecycle through sustainable materials, resource-efficient design and low-carbon construction practices.

Highlighting the industry’s decarbonisation challenge, Suman Jagdev, Programme Director, Build Ahead, and Partner at Xynteo, said India has a significant opportunity to cut emissions as nearly 50 per cent of the building stock required by 2030 is yet to be built. “Our pilots show 40–50 per cent slag substitution in concrete cuts building-level embodied carbon by 8–14 per cent with no schedule or strength penalty, often at cost parity. So viability isn’t the real barrier,” he said.

However, he noted that the bigger challenge lies in the enabling ecosystem rather than technology. “The roadblocks are systemic: no mandatory embodied-carbon measurement, lagging BIS standards for newer materials, lack of codal provisions for alternate building materials, procurement that rewards the lowest cost, and finance that is not able to consider embodied carbon. If we fix the enabling system, information asymmetry and system inertia, adoption can scale on its own,” he added. 

Planning Beyond Projects
India’s urban population is projected to reach nearly 675 million by 2035, making integrated planning increasingly critical as cities face rising demand for housing, transport, water and public infrastructure.

Pointing to a shift in how projects are being planned, Shahbeg Singh, Director, AIPL, said developers are increasingly embedding climate considerations into the early stages of project planning. According to him, master planning today begins with topography, drainage and microclimate studies, while material selection is assessed for thermal performance and water efficiency alongside commercial viability.

He noted that green certification, once viewed as a differentiator, is fast becoming a baseline expectation across the sector. However, Singh stressed that the next step is to integrate climate-risk assessments into land acquisition itself, in collaboration with architects, planners and civic authorities, so resilience is built into projects from the outset rather than addressed later.

Policy Can Accelerate The Transition
The report estimates that housing contributes around 13 per cent of global GDP and supports nearly 280 million jobs, underscoring the need for stronger policy support, green financing and governance reforms to scale sustainable urban development.

Calling for systemic reforms, Jagdev said sustainability continues to be driven largely by compliance and certification across much of the sector, with only a limited group of developers treating it as a long-term business strategy. He argued that mandatory embodied-carbon disclosure, green public procurement and an RBI taxonomy for low-carbon assets would create stronger incentives for sustainable construction while enabling finance to better support low-carbon buildings.

Sharing a similar perspective, Singh said policy support can further strengthen the business case for sustainable real estate. He said standardised incentives for green buildings, faster approvals for certified projects and wider access to green financing instruments across both metro and emerging markets would encourage developers to scale sustainable construction practices.

Sustainability Becomes A Business Imperative
India now has more than 19,700 registered green building projects, covering over 16 billion square feet, reflecting how environmental performance is becoming a defining factor in real estate development.

Reflecting this transition, Mohan said sustainability has moved beyond environmental commitments to become a core business consideration for the real estate sector. He said investor expectations around ESG performance are becoming more specific, while a growing segment of homebuyers is making decisions with environmental quality in mind.