GEAR-UP Explained: Financing Energy Efficiency at Scale

In this episode of The Pulse by GRESB, host Charles Van Thiel, Director of the Real Estate Standard at GRESB, speaks with Lina Konstantinopoulou, Executive Director at the Sustainable Energy Finance Association (SEFA), and Andrew McCracken, Senior Director at JLL, about innovative approaches to financing energy efficiency in real assets. Together, they explore the GEAR-UP project and how it aims to overcome common barriers to large-scale retrofits by aligning stakeholders, reducing upfront capital requirements, and improving performance certainty. The conversation examines the role of data, measurement, and verification in building investor confidence, as well as the importance of collaboration across the value chain to unlock scalable solutions. Tune in to learn how structured financing models and reliable performance data can help turn energy efficiency into a more investable and impactful opportunity across real estate portfolios. You can also read the accompanying article by SEFA and JLL here.

Can’t listen? Read the full transcript below. Please note that edits have been made for readability.

Charles: Hello everyone and welcome to this Pulse episode by GRESB. The Pulse is our interview series where we discuss important and emerging topics within sustainable real assets. My name is Charles Van Thiel, I am Director of the Real Estate Standard at GRESB, and I will be your host today. And today we’re gonna be sharing some pretty interesting and innovative concepts in the field of energy efficiency, more specifically. And to help me do that, I’m joined by two experts in that field: Lina Konstantinopoulou, Executive Director at SEFA, and Andrew McCracken, Senior Director at JLL. And before deep diving into this concept, I’d like to invite you both to introduce yourselves to the audience. Lina, would you like to start?

Lina: Yes, thank you very much Charles for this invitation. I’m Lina Konstantinopoulou, I’m the Executive Director of the Sustainable Energy Finance Association. SEFA is in Brussels, we are a European not-for-profit association, and we have a very interesting mission to really advance the development and finance of sustainable energy across Europe’s built environment.

Charles: Thank you so much. Andrew, would you like to introduce yourself?

Andrew: Sure, and again, thank you very much for the invitation, Charles. I’m Andrew McCracken, I’m a Senior Director in JLL. We’re a global real estate firm. I happen to be based in Ireland, where I run a team delivering fit-outs, engineering, retrofitting projects. And we’ve been partnering with Lina and her SEFA colleagues as a real estate partner, looking at the entire issue of sustainable finance.

Charles: Thank you so much. So as you can see, a wealth of expertise here with us today. It’d be useful to start with the general market sentiment around us and also where the topic of energy efficiency really comes into play. From a GRESB perspective, what we observe today is that the field of sustainability is under more pressure than it was a couple years ago. I think it’s fair to say that the budgets associated with new initiatives are being more scrutinized. However, something that remains really positive is that investors’ expectations in terms of the fundamentals of sustainability really remain strong. Think about operational performance. And so that obviously raises the need for us as professionals to be able to better articulate and oftentimes justify the financial viability and operationalisation of implementing specific solutions within the space. But the big picture message is quite positive and the fundamentals remain very strong. And that is also very much reflected in how the GRESB Standards are evolving, with an increasing focus on energy efficiency as well. Today, as I mentioned, we’re gonna be talking about innovative solutions in the field aiming at financing energy efficiency. And Lina and Andrew, it would be awesome to hear where, respectively, SEFA and JLL are actually contributing to this environment, and maybe having a bit of a high-level description of the topic of today, which is the GEAR-UP project. Lina, would you like to start?

Lina: Yes, of course. First of all, I totally agree with you. We also share the same feelings. We see a strong policy ambition on energy savings and, of course, decarbonization. And at the same time, from our cross-sector ecosystem, we see a clear desire from the market to start investing and upgrading assets. What we also see, unfortunately, is that the challenge is making this work in practice. And at SEFA, we really help connect the dots. Our members and partners are really there to deliver the projects on the ground. SEFA is a cross-sector ecosystem, so we are working across the full renovation delivery chain. So we have public authorities, we have investors, project developers, ESCOs, and of course we have real estate actors. And I’m really happy to do this interview along with Andrew and JLL, because this shows that connecting the dots is making it a reality. Now, GEAR-UP is a project that really helps turn energy efficiency into something that can scale across Europe. Right now many projects still remain small and fragmented, and GEAR-UP can really introduce a consistent way to measure, verify, and structure energy savings so they can be trusted and financed.

Charles: That’s very clear. Thanks, Lina. And my takeaway from that introduction is that there are a lot of stakeholders involved in this kind of project. So the importance of including them in that question and connecting the dots between them definitely matters. Andrew, what’s JLL’s contribution in this case?

Andrew: I think, again, very much in agreement with what you’ve both been saying at the beginning of this. From our side of things, obviously, we’re working in the world of real estate. We are talking to our clients all of the time. They’re under pressure from an asset performance, risk management, and energy and sustainability management perspective. And this is one of JLL’s core values as well. So that’s one of the reasons that we’re so heavily involved in this project. The desire to decarbonize and improve operational efficiency and sustainability is absolutely there. And even if we take out the environmental requirements and desires, the bigger risk at the minute from an asset portfolio and management side of things, which is obviously where our real estate background comes in, is buildings are a serious risk of becoming stranded assets if there is no progress made. And one of the things we love about GEAR-UP is it offers a structured pathway for developers, for owners, for portfolio managers to achieve their goals without huge upfront capital. And that’s really, really important. And what it does deliver then is realistic delivery, rather smart financing, and performance certainty.

Charles: Thank you, Andrew. And I can tell you that “structured pathways” are definitely words that resonate. GRESB members certainly love structured standards and pathways as to how to go about implementing things. I’d like to go back for a second to the high-level context we just talked about. Some of the fundamentals remain strong, and energy efficiency remains strong, and investors’ expectations are clear. Yet, one of the things that we have to be honest about is that we continue to observe some operational barriers to implementing those projects on the ground. Andrew, from your perspective, what are the key operational barriers that you’re observing in today’s industry? And maybe it would be good to elaborate a little bit on why you think those barriers still exist.

Andrew: There’s a wide range of potential issues at play here. I think it’s important to note that most of the portfolio managers, developers, and general property owners all want to do this. They understand the issues of energy costs and carbon exposure. We’re certainly seeing now in the real-world market that energy performance does affect leasing decisions. It does affect valuation decisions. It does affect access to capital. So the willingness is absolutely there, because not only do they want to achieve sustainability targets and goals and do all the right things, they’ve got to protect income and yield and long-term asset value.

So what’s stopping them from doing that? I think quite a lot of these projects are quite complicated, and they’re particularly complicated in occupied buildings. You certainly can’t rely on vacant possession of every building in order to progress these. Some of the incentives to actually do it are weak, although some of the valuation and asset value decisions are moving that along. And there are no huge penalties for not doing anything, so that’s causing a little bit of lack of momentum in certain areas.

There’s a small issue around measurement and verification—so where are we starting from? Where are we going to get to? Can we validate everything as we go along the way? But we know, and we’ll probably talk about this later on, that there are certainly ways and means of doing that. Financing is at the core of a lot of this, and this is again where the GEAR-UP project comes into play, because the costs are really substantial for large buildings and large portfolios. Access to bank capital for poorly performing buildings is expensive, and it’s only getting more expensive. Some of the lenders just are not willing to do that. So there are ways and means of doing it, but the net result is that instead of doing the large retrofits we should be doing, what’s actually happening is small fixes and little projects are being done instead.

Charles: I see—financing, business case, access to capital, cost. These are the words that I will remember from your list of operational challenges here. They certainly resonate with some of the things we observe within our membership as well. Lina, I’d love to turn to you. If you think about GEAR-UP as a structured framework aiming to solve some of those challenges, would you like to describe what it looks like in practice and how we can expect the GEAR-UP project to actually bring solutions to this list of challenges?

Lina: When we first came up with the concept, we understood, as Andrew was mentioning, that we were tackling different types of barriers. So we were talking about owners that wanted to keep upgrading their assets, but they were constrained because they were looking at it from a traditional renovation model. I’m going to point out again the issue of upfront capital—that was important. And then we also saw the issue of long-term performance risk. That was the issue of the owner.

Now, the missing structure was to align incentives across the different types of stakeholders. So the DNA of SEFA got into the project, and this is how the whole concept came into reality, thankfully also with European Commission funding. The GEAR-UP framework was there because it had to align incentives across building owners, tenants, service providers, and investors. It’s not only about measuring, verifying, and contracting energy savings, but it’s about creating a market for energy efficiency, positioning it alongside renewable energy like solar and wind.

What is important to clarify here, especially for investors, is that it’s about reducing risk. So we’re not talking about one-off upgrades—we’re discussing the whole pathway to deliver energy efficiency. Now, you touched upon the issue of the process for setting it up. It’s like a team sport. It has to be a collaborative model. So you need the building owners, who can provide the building and the data. You really need the ESCOs and developers to design and deliver the upgrades, the investors to provide the capital, and most importantly, you need an independent party to verify the energy savings. All of this can be structured through long-term agreements, similar to what I was saying, like a renewable energy market. So the performance is managed within the structure, and the risk does not sit only with the building owner.

Charles: Love it. It sounds like a really good example of how to elevate a business case that is often buried in complexity, through a model that includes multiple stakeholders, is based on collaboration, and ultimately benefits investors by reducing their risk. Andrew, is there anything that you’d like to add to this description? Is this applicable to any type of building? Are there any key requirements in place to make it operational? What’s your take on that?

Andrew: I think, for the most part, it is suited to offices, multi-tenanted assets, but that’s not unique. We see it being suitable for single-tenancy buildings as well. It doesn’t have to be offices—we’ve looked at industrial, logistics, hotels, and some retail. So I don’t think there’s any one-size-fits-all for where this scheme sits. But for the most part, that multi-tenant asset is the target market, should we call it that.

In terms of what you need in the buildings—smart metering and reliable data are the key places to start from. And the great thing is that GRESB members will already have that in their buildings, so it’s a really good place to start. The ESCOs need to be in place for design, installation, and operation, and then we need independent measurement and verification systems, along with the legal framework contracts, to make the whole thing work. But it’s exactly as Lina said—it’s a team sport. There’s a lot going on and a lot of moving parts, but that’s why we’re all here—to make this happen and simplify it for your membership.

Charles: Great. And I’m pretty sure that as soon as the first case studies come out and the evidence of success is there, growth will only go exponentially after that. So that’s certainly an expectation. I’m still putting my hat on as Director of the Real Estate Standard now, and you’ve mentioned two things that I know our GRESB members have been spending a lot of time and effort on in the past few years: data collection and metering capabilities.

For a long time, GRESB has been incentivizing, through our system of scoring, the collection of actual measured performance data in the Standards. So if that is a requirement when considering a GEAR-UP project, that is something that is already ticked, in a way. The second thing you mentioned, Andrew, was reliable data—and we know how difficult that is to achieve. I can also say that assurance of data, in light of third-party data quality schemes, has also been promoted and rewarded in our system.

So there are very obvious parallels between the two. Looking at both Andrew and Lina, am I right to draw those parallels? Is there anything that I might be missing in trying to understand the overlap between the two worlds? Andrew, would you like to start?

Andrew: This is the fundamental basis of everything, Charles. If you don’t know where you’re starting from, you’ll never get to where you want to go. So the data that has been collected by your members gives them such a significant head start in this process. If you weren’t doing this, you could be months trying to gather and validate data, ensuring its accuracy from the baseline. So your members are well ahead of the game here, and they understand their buildings. They’ve made the investments, so they should be rewarded for that—and they will be, in terms of time to get to market with this.

Charles: That’s great. I’m already thinking about parallels between our worlds here. Do you have any examples to share—any success stories or business cases?

Andrew: I think it’s fair to say we are in the trial stage. We have found a number of buildings that are very much of interest, and we are in negotiations to get these started. But it has taken a lot of effort to get to the point where we have this framework and all our partners in place—which we now do. I happen to be based in Ireland, but we are looking at projects across Europe. So we should be up and running very, very shortly with the first proper real case studies.
Charles: Great, Andrew. Lina, is there anything that you’d like to add?

Lina: Thank you very much. Aside from the operational benefits that GEAR-UP can offer—reducing emissions, improving tenant comfort, and continuous monitoring and reporting—the most interesting part is that it can be done without upfront CapEx, and it can also reduce risk. If we turn performance into something that can be measured and certified, it becomes much easier to finance and scale across portfolios.

It will be certified using the SEFA algorithm and can be aligned with recognized standards. This can include regression modeling, adjustments for weather and occupancy, rolling baselines, and non-routine adjustments. This kind of independent, financial-grade verification is critical to give confidence, reduce risk, and attract long-term investment.

Charles: I love it, Lina. It really means that there are a lot of guardrails in place to make sure that the benefits are actually coming from real performance improvement. Thank you so much for sharing that. Thinking about our audience, who may be interested in more details—we’ve only scratched the surface. Is there anything you’d like to share in terms of a call to action?

Lina: Of course. On the SEFA website, we have quite a lot of information about GEAR-UP. There will be an information pack available alongside this Pulse episode, and we are planning a follow-up deep-dive webinar with building and asset managers. Since you mentioned involvement, we are actively looking for commercial buildings to take part in the pilot. We are more than happy to discuss with GRESB members how GEAR-UP could be applied in a practical and scalable way in their portfolios. So that’s it from my side, and again, a big thank you for this invitation.

Charles: Thank you, Lina. And if anybody is interested to hear more, feel free to get in touch. And with that, that’s all the time we have for today’s episode of The Pulse. I’d like to thank both our guests, Lina and Andrew, for sharing their insights. It’s been a pleasure to be your host today, and see you next time on The Pulse.