Key Points
SLBs offer cheaper capital and attract ESG-focused investors but require transparent, measurable sustainability targets, which can be challenging for smaller developers.Agencies..
Mumbai: The use of Sustainability-Linked Bonds (SLBs) in Indian real estate is gaining momentum as developers and real estate investment trusts (REITs) look for innovative financing tools to fund sustainable projects..
These bonds differ from traditional green bonds, which are linked to financing specific sustainable projects, as SLBs are tied to the issuer's broader sustainability goals, such as reducing carbon emissions or improving energy efficiency across their operations...
Leading Indian developers have started to explore SLBs to finance green buildings that meet international sustainability standards such as LEED (Leadership in Energy and Environmental Design) and IGBC (Indian Green Building Council) certifications..
Issuing SLBs allow real estate firms to access cheaper capital by linking bonds to sustainability targets, as investors accept lower returns for strong ESG performance..
