OUR ROADMAP TO NET-ZERO

Leading the charge towards Net Zero in India's Real Estate sector

In the face of rapid urbanisation and escalating environmental challenges, the real estate sector in India stands at the forefront of sustainable development. As the country grapples with the impacts of climate change, our sector becomes a pivotal arena for environmentally conscious development. Transitioning to net-zero is not merely a strategic choice but an imperative for the real estate industry, particularly as we strive to drive economic sustainability and resilience in one of the fastest-growing economies in the world.

As India’s No. 1 real estate developer, we are uniquely positioned to significantly influence the market through our commitment to adopting net-zero practices. This commitment not only aligns with global climate goals, but also addresses our commitment to offer our consumers with greener, healthier, and more efficient living spaces. By mitigating risks associated with future regulations and enhancing asset values and operational savings, we catalyse broader economic benefits and contribute to India's national commitment to achieving net-zero by 2070. We are spearheading the industry’s transition to a low-carbon future, ensuring long-term viability and leadership, through our ambitious science-based targets and our flagship decarbonisation initiative, Lodha Net Zero Urban Accelerator. The Accelerator is a pioneering initiative with an overarching goal to maximize the building sector's contribution to India's 2070 net-zero emissions target. It focuses on enhancing resilience, health, affordability, and access to energy services for all through actionable initiatives in five key areas: Embodied Carbon, Passive Design Solutions, Efficient Equipment, Clean Energy, and Clean Mobility.

Our Carbon Footprint

Our carbon footprint encompasses the total greenhouse gas emissions resulting from our operations, products, and supply chain. According to the GHG Protocol, these emissions are classified into three scopes:

Scope 1 Emissions: Direct emissions from assets we own, including fuel consumption in equipment and vehicles, and the use of refrigerants.
Scope 2 emissions: Indirect emissions from electricity consumption at our construction sites and owned assets.
Scope 3 emissions: Indirect emissions that occur throughout our value chain, divided into upstream and downstream emissions, organized across fifteen categories.

Our most significant Scope 3 emissions originate from the use of sold products, specifically the energy consumption by residents in our developments, and from purchased goods and services, mainly the materials used in our construction projects. Together, these categories constitute over 97.4% of our overall emissions. The remaining Scope 3 emissions, making up 2.17% of the total, are distributed across various categories, including capital goods, fuel and energy-related activities (not covered in Scope 1 or 2), upstream transport, business travel, employee commuting, end-of-life treatment of sold products, and downstream leased assets.

Our Net-Zero Targets

In FY24, we achieved a significant milestone by becoming the first real estate company in India to have our long term and net-zero targets validated by the Science Based Targets initiative (SBTi). This global organisation empowers businesses to establish ambitious emissions reduction targets that align with the latest climate science. By providing extensive resources and guidance for target setting and implementation, the SBTi is spearheading the transition to a net-zero economy, fostering innovation, and promoting sustainable growth.

Our outlined targets as validated by SBTi are as follows:

Near term targets:

Reduce absolute scope 1 and 2 GHG emissions 97.9% by FY2028 from a FY2022 base year
Reduce scope 3 GHG emissions 51.6% per square meter of area developed by FY2030 from a FY2022 base year

Long- term net zero targets, aligned with 1.5°C goal:

Achieving net-zero across scope 1, 2 and 3 emissions by FY2050

These targets align closely with the 1.5°C goal set forth in the Paris Agreement, essential in mitigating the impacts of global warming and climate change.

Crafting a Robust Decarbonisation Strategy

The formulation of our net-zero target has been a pivotal step in mapping out the substantial sources of carbon emissions across our operations and developments. This process has enabled us to establish specific benchmarks for various emission categories and to delineate subcategories that detail the diverse interventions necessary to reduce carbon intensities effectively. Recognising that the path to decarbonisation is continuous, we are committed to relentlessly pursuing alternative and innovative strategies, technologies, and practices. Our goal is to accelerate our decarbonisation efforts comprehensively across our value chain. This ongoing commitment not only underscores our dedication to environmental stewardship but also ensures our business model remains resilient and sustainable in a rapidly evolving global landscape.

Decarbonising our Operations (Scope 1 & 2 Emissions)

Our Scope 1 and 2 emissions have been reduced by approximately 75% from the baseline year of FY22, largely due to our transition to renewable energy sources for our electricity requirements. Additional emission reduction strategies include enhancing efficiency, electrifying equipment and vehicles, switching to lower and ultimately zero Global Warming Potential (GWP) refrigerants and complete renewable integration.

We have been able to reduce the Scope 1 and 2 emissions significantly and continue to reduce them further, however some emissions still remain that cannot be eliminated due to market and technological limitations in areas like complete removal of standby DGs or deploying zero GWP refrigerants, for that we invest in carbon credits to offset these remaining emissions. By investing in these carbon credits, we're not only mitigating our environmental impact earlier but also contributing to local economies and environmental conservation. These efforts are a testament to our holistic approach to sustainability, recognizing the interconnectedness of environmental, social, and economic factors.

Key Achievements so far

Carbon Neutrality in our Operations

In March 2024, we reached a significant milestone in our journey towards becoming a net-zero company by 2050: our company achieved carbon neutrality in operations (Scope 1 and 2 emissions). This was primarily accomplished by transitioning to renewable electricity sources and by improving energy efficiency in our construction activities and owned assets, along with the use of carbon credits for the minor remaining emissions, mainly Scope 1.

While this is a notable achievement, it is important to emphasise that Scope 1 and 2 emissions accounted for only 1% of our company's overall greenhouse gas (GHG) emissions footprint in the baseline year of FY22, which now has reduced further to a mere 0.4% in FY 24. We will continue to reduce our Scope 1 emissions through electrifying our transportation and accelerated deployment of low GWP refrigerants such that the usage of Carbon Credits gets limited to residual emissions, in line with our SBTi Scope 1 and 2 targets.

Transition to Renewable Energy sources for our operations

The percentage of renewable energy in our overall electricity consumption rose from 30.2% in March 2022 to 98% in March 2024. By transitioning to renewable energy for our electricity demand, we are not only minimising our carbon footprint but also contributing to the growth of clean energy infrastructure aligned with India’s net-zero commitment of 2070. Renewable energy integration for our operations span across our construction sites and owned assets.

The commitment to shift to renewable energy is critical in any decarbonisation roadmap. The renewable energy integration needs to be done while navigating the evolving regulatory landscape, and through various modes of procurement from captive to opex, and from on-site to off-site generation depending upon availability and limitations of space. The threshold capacity of loads also governs the feasibility of various types of renewable energy procurement models. The right model is always a mix of on-site, off-site, direct purchase with a progressive increase in on-site and captive capacities.

This transition aligns with our sustainability goals and sets an example for others in our industry to follow. This journey also helps us engage deeply with our supply chain to embrace renewable integration and understand their challenges. At the same time, this transition will guide us in developing solutions for our customers, especially when regulations start allowing community solar and virtual net metering enabling a deeper and wider switch towards renewable energy at the regional level.

Decarbonising our Supply Chain (Scope 3 Emissions – Upstream)

Our decarbonisation strategy underscores the importance of reducing emissions from purchased goods and services, which currently account for 40.1% of our total emissions. This number largely comes from the materials used in construction, such as cement, concrete, steel, aluminium, blockwork, tiles, paints, and others. These components are major contributors to the overall carbon footprint of building projects due to their intensive production processes and widespread use.

We conducted a detailed benchmarking exercise to measure the embodied carbon associated with our construction materials and to ascertain their proportion in typical project constructions. This evaluation serves as a baseline for our ongoing efforts to decrease carbon intensity through strategic interventions and innovative techniques, specially oriented towards the top contributing materials.

Our commitment extends to the adoption of alternative, low-carbon materials such as green concrete mixes and recycled Steel and Aluminium, and other materials that have higher recycled content. Furthermore, we prioritise efficient and optimised design approaches that promote dematerialization, enhance circularity, and minimise waste during construction processes. By continuously evaluating and transitioning to a supply chain characterised by efficient production processes and a high percentage of recycled content, we aim to further minimise our environmental impact.

Key Achievements so far

Using greener concrete mixes

We topped out a 23 storey building, using a triple blend concrete mix (OPC, Fly Ash, GGBS) with up to 47% Cement (OPC) replacement with GGBS (Ground Granulated Blast Furnace Slag) - a low carbon alternate resulting in an outstanding 36.75% reduction in embodied carbon compared with conventional concrete mix. Read more about it here

The successful completion of this project, has enabled us to widen the use of similar concrete mixes and lowering embodied carbon associated with our buildings.

Partnerships for fostering innovative low-carbon material

We recently partnered with IIT-Delhi for piloting use of an innovative blend, LC3 (limestone calcined clay cement) to find commercial use case; this blend can help achieve up to 40% reduction in emissions compared to an Ordinary Portland Cement (OPC). Preliminary trials have been completed and we expect the pilot to be completed within FY25

Energy used in our projects (Scope 3 Emissions – Downstream)

Emissions associated with the energy used by residents in our developments account for approximately 57.3% of our total emissions. Our strategies to reduce the carbon intensity in this category include reducing energy demand through climate-conscious passive designs measures, integrating nature-based solutions for urban cooling, promoting adoption of super-efficient equipment, conducting customer awareness programs, and facilitating the transition to renewable energy sources.

Key Achievements so far

Improving energy efficiency of the buildings

At the heart of our approach is a keen focus on optimising architectural elements during the design stage. By carefully considering the orientation, window-to-wall ratio, natural ventilation, shading, and glass selection, we have been able to consistently enhance the environmental efficiency of our developments. We have used a high performance single layer glass at one of our recent parcels (Premier) at Palava project that will cut down heat gains and energy needs while enhancing the comfort of the residents. We track the performance improvements of such initiatives post occupancy and calibrate their larger deployment through field learning and a positive feedback.

Furthermore, we have integrated parametric climate analysis from the conceptual design stage, allowing us to refine our strategies with precision as our projects progress. This proactive approach is designed to drastically reduce energy and cooling demands, underscoring our dedication to sustainable building practices that not only meet but exceed regulatory standards. It also contributes to the long-term sustainability and liveability of our developments.

Market transformation and adoption of super-efficient appliances

Recognising how efficient equipment can greatly reduce energy consumption in Indian households, and with projections showing that space cooling could account for up to 45% of household electricity use by 2050, we have proactively updated our procurement policies accordingly. Our commitment now includes the installation of BEE 5-star rated air conditioners and fans across most of our developments. To date, we have installed approximately 30,000 5-star rated air conditioners, equivalent to around 40,000 tonnes of cooling capacity, across our projects. This is the highest penetration of 5-star air conditioning at scale in the country and has been possible due to economies of scale achieved due to our volumes.

Additionally, through the marketplace in our app, Bellevie, we aim to actively promote the adoption of super-efficient appliances to further reduce energy consumption. We wish to leverage the consumer pool as the demand aggregation to drive the market penetration of super-efficient appliances. We aim to do so through strategic awareness programs and offering discounted rates.

Global Cooling Prize

In line with these efforts, we have also embraced the innovative spirit of the Global Cooling Prize. This international competition, which concluded successfully in April 2021, has spurred the development of air conditioning units that are substantially more efficient than traditional models and have a significantly lower climate impact. At Palava, we are currently conducting tests on these state-of-the-art air conditioners to establish new performance benchmarks that reflect real-world conditions.

UrjaAnk: elevating energy awareness in Indian homes

To reduce household energy use and carbon emissions, we introduced the UrjaAnk initiative to change energy consumption habits in Indian homes, especially in Palava. This program will assess household energy use pattern, define benchmarks and compare with global standards, ultimately understanding and identifying areas for improvement.

A preliminary exercise was conducted at Palava to understand the energy consumption of the operational households. Through detailed analysis, UrjaAnk will empower homeowners, developers, and policymakers with data-driven insights, fostering targeted energy-saving measures such as appliance upgrades, improvements in Building Design, and optimized heating and cooling systems. The program studies usage patterns to induce any necessary changes in the energy use behaviour of consumers. These strategic interventions will significantly reduce the energy demand and gradually improve the energy performance and comfort of Indian homes.

Partnership with Third Derivative (D3)

We have forged a strategic partnership with D3, the start-up incubator arm of the Rocky Mountain Institute (RMI). This collaboration is designed to harness the creativity and ingenuity of start-ups, providing them with the support and resources needed to develop practical and cross-cutting technologies.

Our joint efforts focus on accelerating the adoption of advanced climate technologies that can significantly impact energy efficiency and sustainability within the real estate sector. By supporting these innovative start-ups, we aim to integrate cutting-edge solutions into our projects, enhancing our environmental stewardship while driving toward our sustainability goals.

It is a long and arduous journey of mainstreaming solutions and practices that decarbonize each part of the Built Environment’s emissions spectrum. Still we believe that if we take a whole systems approach and share our progress with the larger ecosystem we can help drive markets and develop confidence in solutions that accelerate the adoption of such practices. This can be done while learning from the experts and working together with our customers and supply chain with the underlying approach of converting this challenge into an opportunity to build our Nation. By taking these bold steps we can scale climate tech in India and shoot for being a global leader in it, we can also de-risk our once in a nation’s lifetime growth opportunity by achieving climate and energy security while boosting our economy as well. Taking this path of growing responsibly we can demonstrate to the world that growth and emissions can be decoupled.