Insights

Real estate, a major contributor to global emissions, is also primed to be a leader in sustainable transformation. In both India and Singapore, real estate developers and investors are increasingly adopting green financing tools such as sustainability-linked bonds (SLBs), green bonds, and sustainability-linked loans to deliver higher environmental performance and unlock growth.

In India, the sustainable debt market has soared—by December 2024, cumulative issuance of green, social, sustainability, and SLB instruments (GSS+) reached USD 55.9 billion—an increase of 186% since 2021 Climate Bonds. Real estate players are part of this wave. For instance, large developers like DLF and Godrej Properties have issued SLBs tied to tangible ESG targets—like reducing emissions by 20% or improving energy efficiency by 40%—to attract investor capital and enhance their project profiles.

In Singapore, real estate groups have also embraced sustainable finance. City Developments Limited (CDL), a pioneer in green building, raised funds through green bonds to retrofit existing assets and elevate their environmental credentials—setting a precedent for green refinancing in the region.

These instruments are more than marketing tools. Green bonds often come with reduced borrowing costs; SLBs may offer financial incentives for delivering on ESG targets. At the same time, regulators across India are strengthening frameworks—SEBI’s enhanced ESG disclosure norms and draft climate finance taxonomy are raising the bar for standards and transparency.

In a sector where the built environment is pivotal to both climate impact and capital flows, green financing is not a luxury—it is a pathway to future-resilient, high-value real estate.