As India participates in the 30th Conference of the Parties (COP30) to the United Nations Framework Convention on Climate Change in Brazil, the spotlight will be on updating the Nationally Determined Contributions (NDCs 3.0) and converting them into implementation blueprints. The focus will also be on negotiating to secure US$1.3 trillion per year in climate finance by 2035 for developing countries—crucial for advancing India’s goal of achieving net zero by 2070. While India is in the process of developing its climate finance taxonomy, formulating an exclusive sustainable buildings taxonomy—that sets clear standards on activities, materials, or practices—will be critical in channelling the finance flow into the buildings sector.
With India’s rapidly urbanising population, the country’s buildings sector is at a critical juncture. Most of the buildings that will exist by 2050 are yet to be built. There is also tremendous energy-saving potential in retrofitting the existing buildings. As per a Bureau of Energy Efficiency report, the buildings sector accounted for 32 per cent of India’s total electricity consumption in 2024, revealing an opportunity at hand to intervene and reduce the energy demand and emissions intensity while building resilience.
The country’s efforts to promote sustainable and efficient building practices include green building rating systems, such as the Indian Green Building Council (IGBC) and Green Rating for Integrated Habitat Assessment (GRIHA). These bring the technical reinforcement needed to improve building performance. Meanwhile, codes such as the Energy Conservation and Sustainable Building Code (ECSBC) and Eco-Niwas Samhitha (ENS) provide the compliance mechanisms that the sector requires to embed sustainability at scale.
Despite efforts to transition to sustainable buildings, the lack of clear, nationally recognised, and unified definitions continues to slow progress. Without such standards, financial institutions face difficulty in identifying credible green investments, slowing the flow of capital to the sector. Creating a national consensus within an international framework would help align different stakeholders and bring together many fragmented initiatives.
Recognising such a gap at the international level, Buildings Breakthrough, a global initiative, was launched at COP28, with a vision to transform the buildings sector and make Near-Zero Emission and Resilient Buildings (NZERBs) the global norm by 2030. Their recent interim report establishes a comprehensive definition of NZERB, emphasising energy efficiency and minimal greenhouse gas emissions throughout a building’s lifecycle. The definition, targeted at national governments, is part of the framework that creates a unified goal across countries, facilitating cooperation based on shared principles and allowing flexibility to respond to context-specificities at the same time.
Several countries are strengthening definitions to develop building-specific taxonomies. For example, the European Union (EU) has established energy performance thresholds for buildings and construction activities under its EU Taxonomy Regulation. These thresholds must be met for projects to qualify as taxonomy aligned. Similarly, Singapore and China are integrating sustainable building standards into their financial frameworks to qualify as sustainable investments.
Given the crucial role of the buildings sector in achieving India’s net-zero goal, the sector must be strategically embedded into the country’s climate finance taxonomy. To anchor the currently fragmented efforts, India should adopt a national standard definition of sustainable buildings, aligned with global norms. A clear definition will reduce ambiguity regarding what qualifies as ‘sustainable’ or ‘green’, harmonise multiple rating systems and codes, and help mobilise and channel climate finance, effectively.
Considering that financial institutions may initially gravitate towards established practices with lower perceived risk, transitional support mechanisms will be crucial. Pilot projects, certification of sustainable construction materials, and performance-linked incentives to adhere to the new standard can build investor confidence and catalyse sector-wide transformation. Such a transformation will also enable India’s buildings sector to actively participate in the emerging carbon market ecosystem.
Further, while the national definition should serve as a guiding framework, it must allow flexible baselines, such as minimum performance thresholds tailored to different building typologies and climate zones. This flexibility will motivate states, cities, and local actors to surpass set targets through context-specific design, efficient technologies, and certified materials, stimulating research and innovation and accelerating climate action on the ground. The standards should also be periodically updated to reflect evolving priorities and advancements in the industry.
In conclusion, a clear, adaptive, and nationally recognised definition of sustainable buildings is the need of the hour—one that can unlock the sector’s full potential in advancing India’s climate goals.
Divya Davis is a Senior Analyst in the Climate Change Mitigation Group at the Center for Study of Science, Technology and Policy (CSTEP), a research-based think tank.
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth