India’s construction sector is in the midst of an unprecedented boom, but this growth comes with a substantial carbon footprint. To manage this impact, the CII-Indian Green Building Council (IGBC) recently launched its rigorous Green New Buildings Rating System – Version 4, which, for the first time, integrates embodied carbon accounting. This move signals a major shift toward addressing the emissions locked into building materials like cement and steel.
Sonal Desai, Managing Editor, ESGNews.earth, spoke with S Karthikeyan, Deputy Executive Director, CII–Indian Green Building Council, to understand the strategy for moving these standards from voluntary guidelines to regulatory mandates, how they impact global ESG reporting, and the need for green finance innovation.
Sonal Desai: With the launch of the stringent IGBC Green New Buildings Rating System – Version 4 (incorporating embodied carbon accounting), what is the IGBC’s strategy to work with State and Central governments to move these standards from voluntary guidelines to regulatory mandates for high-impact building typologies?
S Karthikeyan: IGBC’s core strength comes from its voluntary, market-driven approach, which encourages innovation, leadership, and performance. When sustainability is adopted by choice, it delivers deeper environmental and economic impact. From a market perspective, over-regulation can sometimes create unintended consequences. When sustainability is purely enforced, there is a risk that some stakeholders may look for short-term or superficial compliance routes, making them seek alternative options that claim low carbon performance but do not deliver real environmental benefit. Such instances do not help people or the planet.
IGBC fully recognizes that voluntary guidelines are naturally followed by market leaders and early adopters and may not automatically reach all segments of the construction ecosystem. That is where regulation can become essential, particularly for stakeholders at the bottom of the pyramid, to ensure achievable thresholds across the industry.
IGBC works closely with Central and State governments in an advisory capacity to strengthen baseline regulations through the Energy Conservation Building Code (ECBC), which is now upgraded as the Energy Conservation & Sustainability Building Code (ECSBC). Uniform adoption of these codes across states will definitely ensure consistent minimum performance levels nationwide.
The IGBC Green New Buildings Rating – Version 4 is designed to function above and beyond these mandatory baselines, enabling progressive developers to significantly outperform regulatory thresholds on both operational and embodied carbon reduction, while reaping larger environmental and economic benefits.
Sonal Desai: How can the new IGBC tools and rating systems, particularly the Embodied Carbon Baseline Report, be officially leveraged to simplify or streamline compliance for Indian companies with global ESG reporting frameworks (e.g., GRI, TCFD) and international carbon disclosure requirements?
S Karthikeyan (IGBC): Global ESG and carbon disclosure frameworks (e.g., GRI, TCFD) are generally structured at an organizational level, though all the asset classes of the organization are covered as part of these frameworks. At present, India does not have a unified national regulation specifically covering embodied carbon for the building industry. IGBC’s work reduces the embodied carbon emissions at the building project level. In the future, the Indian Urban Planning Department would likely specify the embodied carbon threshold for buildings during the design stage. Presently this has been practiced in the UK and Denmark.
Sonal Desai: How will the IGBC collaborate with major ESG rating providers (e.g., S&P Global, MSCI) and financial institutions to ensure the data is integrated into their methodologies for assessing real estate and construction sector risk?
S Karthikeyan: IGBC functions as a voluntary advisory body and market enabler. We would not be able to mandate integration with third-party ESG rating methodologies. Product manufacturers have already recognized the opportunity to respond, and many are setting IGBC recommended material benchmarks to demonstrate lower-carbon credentials. Green financing is being made available to manufacturers and developers who demonstrate verifiable improvements. Ultimately, it is up to ESG rating agencies and financial institutions to voluntarily adapt carbon footprint at the product level as a criterion; IGBC’s role is to make frameworks available so these institutions can make informed decisions when they choose to integrate embodied carbon into their models.
Sonal Desai: Jamshyd N. Godrej stated that net-zero buildings must make “strong business sense.” What specific green finance mechanisms are needed, beyond current offerings, to de-risk and lower the capital cost for adopting the advanced features in the Version 4 rating?
Karthikeyan: Green finance in India has made substantial progress in supporting energy-efficient green buildings, with many products focused primarily on reducing operational carbon. Taxonomy-aligned loans and similar products in the market today typically highlight operational performance, recognizing green buildings rather than embodied carbon. As the market matures and whole-life carbon accounting becomes standard practice, we expect new finance structures to come into place.
IGBC’s Version 4 rating provides the technical foundation that can enable these future financing mechanisms to be structured transparently and credibly, helping to de-risk investments and lower capital costs for developers who adopt not just Green but move towards net-zero features.
Sonal Desai: The Embodied Carbon Baseline Report highlights the carbon intensity of materials. What specific, time-bound targets and incentives will IGBC and the industry set for manufacturers and suppliers to reduce the upfront embodied carbon of cement, steel, and other high-volume building materials in India’s green supply chain?
S Karthikeyan: As mentioned, IGBC operates as a voluntary market mechanism and therefore does not set targets for manufacturers and suppliers. The pacesetting in manufacturing is currently led by industry itself: several manufacturers and sectors have announced self-driven net-zero road maps. For example, many in the cement sector have declared long-term targets, aiming for net-zero operations by 2045. These commitments are also seen to be followed by many product manufacturers. All of these are facilitating India reaching its net-zero goals of 2070.
Sonal Desai: What immediate, large-scale training and certification programs are being implemented to upskill the Indian architectural, engineering, and construction (AEC) workforce to competently implement this new framework?
S Karthikeyan: Capacity building is central to IGBC’s approach. we deliver continuous nationwide training for architects, engineers, developers, green consultants, and construction professionals. In 2025 alone, IGBC conducted over 20 advanced training programs under the Asia Low Carbon Building Technologies (ALCBT) initiative in partnership with Global Green Growth Institute (GGGI), which significantly built technical capacity for the stakeholders involved in all stages from design to construction of buildings. IGBC has also launched a special Net-Zero and Decarbonization course in partnership with IIT Bombay, for faculty and students to mainstream knowledge on both embodied and operational carbon. IGBC’s clear objective remains to reduce embodied carbon as far as practicable and progressively achieve zero operational carbon across building portfolios.
Sonal Desai: The IGBC Green Hotels Rating System is a pilot for a high-growth sector. What is IGBC’s key strategy to ensure rapid and deep adoption of this rating system, and how will it directly link achieving its carbon-neutral operations goals to measurable benefits for guests and investors?
S Karthikeyan: The IGBC Green Hotels Rating System has been designed to deliver clear, quantifiable benefits:
Optimized Resource Consumption: Just like all IGBC rating systems, reducing energy, water use, and waste to landfill means hotels cut operating costs and lower their carbon footprint, which directly improves their profitability and performance.
Guest Health, Comfort & Wellbeing: Improved indoor air quality, thermal comfort, acoustics, and hygiene translate into better guest experience, higher satisfaction scores, and stronger brand value.
These tangible savings and intangible guest benefits together will create greater impact for the investors and have a snowballing effect, creating widespread adoption. IGBC certification reduces operational costs and enhances long-term asset value, accelerating both uptake and investor confidence.
