Our industry is engaged in an important dialogue to improve the efficiency and resilience of real assets through transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
Despite nearly 90% of global investors expressing interest in sustainable investing, Q1 2025 saw record net outflows from ESG funds. This contradiction between long-term conviction and short-term market behavior reveals more than funding volatility. It reflects a deeper challenge: confidence. While capital theoretically supports sustainable building transformations, the carbon needle still has a way to move. The disconnect isn’t about intent or investment; it’s rooted in performance concerns and changing investor expectations.
While ESG fund investors continue to seek clarity, reliable performance data and the ability to link sustainable progress to financial outcomes will play a crucial role in delivering an effective brown-to-green strategy.
The retrofit reality check
The need for asset transformation is undeniable; approximately 80% of the buildings that will be standing in 2050 have already been built, and these structures consume 34% of global energy and generate 37% of global CO₂ emissions.
Where prime location was once the ultimate determinant of value, the definition of “best-in-class” is evolving. Net-zero readiness, health and well-being credentials, and resilience to climate change now dictate competitiveness. Locations without sustainability credentials now risk stranded assets. And without reliable data to verify performance, investors risk mispricing assets, underestimating liabilities, and ultimately eroding returns.
But the conventional method could benefit from improvement. Many brown-to-green transformations rely on assumptions rather than actionable insights. Building owners often retrofit based on generic benchmarks and outdated performance data, which can lead to costly upgrades that fall short of intended sustainability goals.
When good intentions meet bad data
The current approach treats buildings like static objects rather than dynamic systems. Traditional retrofits focus on obvious interventions: better insulation, efficient heating systems, and solar panels. These improvements matter, but they represent symptomatic fixes rather than systematic solutions.
Consider this: two identical office buildings undergo identical sustainability upgrades. One achieves a 40% reduction in energy consumption; the other barely registers 15%. The difference isn’t in the equipment. It’s in understanding how that specific building actually behaves, how its occupants work, and how external conditions affect its performance.
This performance gap reveals the fundamental flaw in brown-to-green strategies. Without building-specific ESG data, interventions cannot be targeted, results cannot be benchmarked, and investors cannot have confidence in outcomes. Performance uncertainty translates directly into financial risk.
The GRESB acceleration
GRESB’s recognition of this challenge has reshaped the sustainability landscape. The 2025 GRESB reporting cycle includes significant updates to both the Real Estate and Infrastructure Standards, with expanded criteria including energy efficiency and embodied carbon. These changes reflect a growing understanding that measuring sustainability requires precision, not proximity.
The world’s leading sustainability benchmark now asks for the kind of detailed, asset-level data that most building owners simply don’t possess. The GRESB Real Estate Assessment requires participants to report ESG data at the asset level, creating pressure for transparency that exposes existing data blind spots.
This creates opportunity; buildings that can demonstrate measurable performance improvements through data-driven transformations gain a competitive advantage. For investors, the market appeal of verifiable ESG performance is undeniable. It transforms sustainability from narrative into evidence, and owners can prove that the green upgrades in place are driving home REAL impact.
A data-first approach
The most successful transformations aren’t happening because of better equipment or bigger budgets. They’re succeeding because owners understand their buildings before they change them.
Effective brown-to-green strategies begin with comprehensive baseline understanding:
- How much energy does each system actually consume?
- When do occupancy patterns create optimization opportunities?
- Which interventions deliver measurable impact versus marginal improvements?
This intelligence requirement has created a new category of building transformation: one where data collection precedes capital deployment. In other words, they invest in clarity before they invest in change, ensuring every pound of capital deployed delivers measurable impact and defensible financial outcomes.
The data-first roadmap
What does data-driven building transformation actually look like? It starts with comprehensive sensing networks that capture energy consumption, occupancy patterns, environmental conditions, and equipment performance in real-time. These systems provide the foundation for understanding actual building behavior rather than theoretical performance.
But data collection alone isn’t sufficient. The most effective brown-to-green strategies combine robust data capture with sophisticated analytics platforms that can identify optimization opportunities, predict maintenance needs, and quantify improvement impacts. This combination enables building owners to make informed decisions about where to invest their limited capital for maximum sustainability impact.
The result transforms building management from reactive maintenance to proactive optimization. Building systems adjust automatically based on occupancy predictions. Energy consumption optimizes around real-time utility pricing. Maintenance scheduling prevents problems before they affect performance.
These may sound like futuristic concepts, but they are already a reality in buildings managed through ESG data platforms.
The future of performance data
Brown-to-green transformation is not an end state; it is the starting point of continuous building intelligence. Embedding ESG data into transformation strategies creates compounding benefits: greater operational efficiency, stronger tenant satisfaction, and enhanced long-term asset value.
For investors, the lesson is clear. Success will not be guaranteed to those who retrofit fastest, but to those who measure smartest. Reliable performance data creates the bridge between sustainability ambition and financial return. Sustainability strategies that rely on assumptions or approximations will struggle under tightening regulation and competitive pressure.
The brown-to-green future belongs to building owners who measure what matters, understand what they measure, and act on what they understand.
This article was written by Ben Roberts, CMO and Co-Founder of Utopi Ltd. Learn more about Utopi Ltd here.