Four Indian cities - Bengaluru, Delhi, Hyderabad and Mumbai – have made it to the list of top 20 sustainable cities in the Knight Frank APAC Sustainability Index 2021. While Singapore, Sydney, Wellington, Perth, and Melbourne are the top five green-rated cities in commercial real estate in the Asia-Pacific region, Bengaluru is ranked number 14 on the list.
The report titled Active Capital Asia-Pacific - Rising Capital in Uncertain Times also noted that India’s Green Bonds issuance increased 523 percent YoY, from $1.1 billion in 2020 to $6.8 billion in 2021. As of now, India is the sixth-largest country in APAC in terms of the total amount of green bonds issued in 2021.
Knight Frank’s APAC Sustainably Led Cities Index rated 36 cities based on urbanisation pressure, climate risk, carbon emissions and government initiatives.
Bengaluru led the sustainability index amongst the top Indian cities and is ranked 14thin the APAC region. Bengaluru is the only Indian city to achieve the Gold standard category. Delhi ranked second amongst the Indian cities (ranked 17th in the APAC region) followed by Hyderabad (ranked 18th in the APAC region) and Mumbai (ranked 20th in the APAC region).
Standard refers to the willingness of the cities in accepting and adapting to ESG (Environmental, Social, and Governance) metrics. Platinum indicates that the city is very advanced and extremely open to accepting and adapting to ESG metrics from all stakeholders to a high degree. Gold indicates that the city is slightly advanced and somewhat open to accepting and adapting to ESG metrics from all stakeholders to a certain degree. Silver indicates that the city is advanced and open to accepting and adapting to ESG metrics from all stakeholders to a limited degree.
“New market dynamics have propelled the growth of sustainable development in India. The global commitment to carbon neutrality and Net Zero, firmly focused on creating environmentally friendly premises, has led Indian developers to augment their products to meet the requirements. With more and more occupiers demanding for sustainable, green and well standard buildings, we expect these features to become a universal standard, rather than a novelty, in the foreseeable future,” said Shishir Baijal, Chairman and Managing Director Knight Frank India.
As indicated in the Sustainability Index, four Indian markets feature in top 20 in the APAC region which is a good indication of the real estate sector’s commitment to creating sustainable development, he added.
The report also noted that India’s Green Bonds issuance increased 523 percent YoY, from $1.1 billion in 2020 to $6.8 billion in 2021. As of now, India is the sixth-largest country in APAC in terms of the total amount of green bonds issued in 2021, the report said.
Green bond issuances that were negatively impacted by the pandemic in 2020 recovered in 2021, surpassing pre-pandemic levels and posting an increase of 116.9 percent from $3.1 billion raised in 2019.
According to statistics provided by the Climate Bonds Initiative (CBI), APAC issued $126 billion in green bonds in 2021, with China issuing the largest amount, USD 68 billion, exceeding the combined value of the other APAC nations.
“Over the last few years, Investors have been putting more emphasis on ESG-focused strategies to maximise their returns. Recent years have witnessed a rapid embrace of ESG measures benchmarking in the APAC region, driven by the pressing need to reduce climate risks. In the past, adopting sustainable methods have shown to strengthen investment portfolio. With debt cost soaring, yield-seeking investors will also be compelled to move up the risk curve to secure the desired spreads,” said Neil Brookes, Head of Global Capital Markets at Knight Frank.
The 2021 Active Capital Asia-Pacific Report - Rising Capital in Uncertain Times aims to provide an insight into how the real estate market in Asia-Pacific performed historically and how it is predicted to play out in 2022, thereby acting as a guide for investors. The report also highlights an important theme – Environmental, Social and Governance (ESG) – for investors that are looking to expand their ESG foothold in their portfolios.
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